Headline: Markets Update: PBOC Strengthens Yuan Fix as China Holds Rates; Nvidia Surges, IMF Flags Australia Reforms
Global markets opened to a firmer tone in Asia after the People’s Bank of China set the USD/CNY reference rate at 7.0905, a stronger-than-expected fix that underscored ongoing currency management to stabilize the yuan. China also left its one-year and five-year Loan Prime Rates unchanged at 3.0% and 3.5% for a sixth consecutive month, signaling a cautious stance as authorities balance growth support with financial stability. The steady LPRs suggest targeted easing will continue rather than broad rate cuts, with the yuan anchoring sentiment in regional forex trading.
Policy signals were mixed elsewhere. The IMF urged Australia to pursue fiscal consolidation by reviving a mining tax, lifting the GST, and trimming exemptions, while coordinating national budgets as debt pressures build—despite an expected pickup in growth through 2025–26. In the UK, consumer confidence posted its sharpest decline since April, with economic expectations dropping to -44% and personal-finance sentiment sliding to -16%, highlighting persistent cost-of-living strains ahead of the holiday season.
Equity momentum remained concentrated in megacap technology. Nvidia reported a powerful beat with Q3 revenue of $57 billion, led by data-center demand, and guided Q4 sales to around $65 billion. Management said demand for Blackwell and cloud GPUs is “off the charts,” with visibility to $500 billion in next-generation chip revenue through 2026. Reflecting the tech-led rally, Barclays lifted its 2026 S&P 500 target to 7,400, citing support from expected Federal Reserve rate cuts—while warning that sticky inflation, rising unemployment, and fragile consumer sentiment outside tech remain key risks.
Key Points: – PBOC set the USD/CNY reference rate at 7.0905, a stronger fix than markets anticipated. – China kept the one-year LPR at 3.0% and the five-year LPR at 3.5% for a sixth straight month. – The IMF called on Australia to revive a mining tax, raise the GST, and narrow exemptions to manage debt. – UK consumer confidence fell sharply, with economic expectations at -44% and personal-finance sentiment at -16%. – Nvidia posted Q3 revenue of $57 billion, guided Q4 to about $65 billion, and highlighted exceptional GPU demand. – Barclays increased its 2026 S&P 500 target to 7,400, while warning of risks from inflation and weak consumer sentiment.
