PBoC holds key lending rates steady for fifth straight month

The People's Bank of China has decided to keep its key lending rates unchanged for the fifth consecutive month. The one-year Loan Prime Rate, the benchmark for most corporate and household borrowing, remained at 3.0%, while the five-year LPR, which anchors mortgage rates, held at 3.5%.

Both rates were last lowered by 10 basis points in May.

As broadly expected by the market, the PBoC maintained both the one-year and five-year Loan Prime Rates at their current levels. This move signals a pause in interest rate adjustments.

undefined undefined

The decision came ahead of a raft of key economic data releases, including third-quarter GDP, industrial production, and retail sales, and followed its decision to leave the seven-day reverse repo rate unchanged last week.

Separately, retail sales growth also moderated and fixed-asset investment posted its first contraction since 2020, underscoring persistent weakness in the property sector. However, industrial production outperformed expectations, highlighting resilience in manufacturing.

The economy slowed for a second consecutive quarter, growing at its weakest pace in a year as softer consumer spending and investment partially offset strong exports.

Meanwhile, markets welcomed signs of easing Sino-US trade tensions after US President Trump called his proposed tariffs on Chinese goods "not sustainable," as officials prepare for upcoming bilateral talks.

On Monday, the Shanghai Composite [https://seekingalpha.com/symbol/SHCOMP?source=section%3Asearch_bar%7Ccontent_type%3Aall%7Csection_asset%3Asearch-basic%7Csearch_item%3Ashcomp%7Crow_num%3A1%7CURL_first_level%3Anews%7Ctopic%3Asymbol] rose 0.5% to around 3,860 while the Shenzhen Component rallied 1.5% to 12,880 on Monday, recouping some losses from the previous session amid signs of easing Sino-US trade tensions, and the offshore yuan [https://seekingalpha.com/symbol/USD:CNY#source=url_first_level%3Amarket-news%7Csection%3Aglobal%7Csection_asset%3Afull_story%7Cbutton%3Abody_link] traded flat around 7.12 per dollar on Monday, holding near three-week highs as investors assessed a raft of fresh Chinese economic data.

ETFs: (NYSEARCA:FXI [https://seekingalpha.com/symbol/FXI#source=url_first_level%3Amarket-news%7Csection%3Amarket-pulse%7Csection_asset%3Afull_story%7Cbutton%3Abody_link]), (NYSEARCA:KWEB [https://seekingalpha.com/symbol/KWEB#source=url_first_level%3Amarket-news%7Csection%3Amarket-pulse%7Csection_asset%3Afull_story%7Cbutton%3Abody_link]), (NYSEARCA:CQQQ [https://seekingalpha.com/symbol/CQQQ#source=url_first_level%3Amarket-news%7Csection%3Amarket-pulse%7Csection_asset%3Afull_story%7Cbutton%3Abody_link]), (NASDAQ:MCHI [https://seekingalpha.com/symbol/MCHI#source=url_first_level%3Amarket-news%7Csection%3Amarket-pulse%7Csection_asset%3Afull_story%7Cbutton%3Abody_link]), (NYSEARCA:ASHR [https://seekingalpha.com/symbol/ASHR#source=url_first_level%3Amarket-news%7Csection%3Amarket-pulse%7Csection_asset%3Afull_story%7Cbutton%3Abody_link]), (NYSEARCA:YINN [https://seekingalpha.com/symbol/YINN#source=url_first_level%3Amarket-news%7Csection%3Amarket-pulse%7Csection_asset%3Afull_story%7Cbutton%3Abody_link]), (NYSE:TDF [https://seekingalpha.com/symbol/TDF#source=url_first_level%3Amarket-news%7Csection%3Amarket-pulse%7Csection_asset%3Afull_story%7Cbutton%3Abody_link]), (NYSEARCA:CHIQ [https://seekingalpha.com/symbol/CHIQ#source=url_first_level%3Amarket-news%7Csection%3Amarket-pulse%7Csection_asset%3Afull_story%7Cbutton%3Abody_link]), (NYSEARCA:GXC [https://seekingalpha.com/symbol/GXC#source=url_first_level%3Amarket-news%7Csection%3Amarket-pulse%7Csection_asset%3Afull_story%7Cbutton%3Abody_link]), (NYSEARCA:EWH [https://seekingalpha.com/symbol/EWH#source=url_first_level%3Amarket-news%7Csection%3Amarket-pulse%7Csection_asset%3Afull_story%7Cbutton%3Abody_link]), (NYSEARCA:KBA [https://seekingalpha.com/symbol/KBA#source=url_first_level%3Amarket-news%7Csection%3Amarket-pulse%7Csection_asset%3Afull_story%7Cbutton%3Abody_link]), (NYSEARCA:YANG [https://seekingalpha.com/symbol/YANG#source=url_first_level%3Amarket-news%7Csection%3Amarket-pulse%7Csection_asset%3Afull_story%7Cbutton%3Abody_link]), (NASDAQ:CXSE [https://seekingalpha.com/symbol/CXSE#source=url_first_level%3Amarket-news%7Csection%3Amarket-pulse%7Csection_asset%3Afull_story%7Cbutton%3Abody_link]), (NYSE:CAF [https://seekingalpha.com/symbol/CAF#source=url_first_level%3Amarket-news%7Csection%3Amarket-pulse%7Csection_asset%3Afull_story%7Cbutton%3Abody_link]), (NYSEARCA:CWEB [https://seekingalpha.com/symbol/CWEB#source=url_first_level%3Amarket-news%7Csection%3Amarket-pulse%7Csection_asset%3Afull_story%7Cbutton%3Abody_link]), (NASDAQ:PGJ [https://seekingalpha.com/symbol/PGJ#source=url_first_level%3Amarket-news%7Csection%3Amarket-pulse%7Csection_asset%3Afull_story%7Cbutton%3Abody_link]), (NYSEARCA:KURE [https://seekingalpha.com/symbol/KURE#source=url_first_level%3Amarket-news%7Csection%3Amarket-pulse%7Csection_asset%3Afull_story%7Cbutton%3Abody_link]).

Currency: (CNY:USD [https://seekingalpha.com/symbol/CNY:USD])

MORE ON CHINA MARKETS AND ECONOMY

* China's 1.1% Q3 GDP beats forecasts on policy boost, but trade war looms [https://seekingalpha.com/news/4505470-chinas-11-q3-gdp-beats-forecasts-on-policy-boost-but-trade-war-looms]
*
U.S.-China trade agreement leads to lifted chip design software restrictions [https://seekingalpha.com/news/4465143-us-china-trade-agreement-leads-to-lifted-chip-design-software-restrictions#source=url_first_level%3Amarket-news%7Csection%3Amarket-pulse%7Csection_asset%3Anews_title]

* China's trade surplus widens amid weaker exports and deeper import slump [https://seekingalpha.com/news/4456405-chinas-trade-surplus-widens-amid-weaker-exports-and-deeper-import-slump#source=url_first_level%3Amarket-news%7Csection%3Amarket-news%7Csection_asset%3Anews_title]
*
China’s May CPI declines fourth consecutive month, PPI deflation eases to two-year low [https://seekingalpha.com/news/4456404-chinas-may-cpi-declines-fourth-consecutive-month-ppi-deflation-eases-to-two-year-low#source=url_first_level%3Amarket-news%7Csection%3Amarket-news%7Csection_asset%3Anews_title]

* China's services sector growth accelerates in May amid stronger business & activity [https://seekingalpha.com/news/4455400-chinas-services-sector-growth-accelerates-in-may-amid-stronger-business-activity#source=url_first_level%3Amarket-news%7Csection%3Amarket-news%7Csection_asset%3Anews_title]