Asian markets fall as investors weigh concerns over Fed hikes; China lowers benchmark interest rates

IMF to visit Colombo for more economic solutions

The International Monetary Fund will visit Colombo this week to continue discussions with the Sri Lankan authorities on economic and financial reforms and policies.

“The objective is to make progress towards reaching a service-level agreement on a future IMF Extended Financing Facility (EFF) arrangement in the near term,” the IMF said in a statement over the weekend.

“Because Sri Lanka’s public debt is deemed unsustainable, IMF Executive Board approval of the EFF program would require adequate assurances from Sri Lanka’s creditors that debt sustainability will be restored.”

The IMF had already concluded a first round of talks in late June when it worked on a set of macroeconomic and structural policies with Colombo “to address macroeconomic imbalances, restore public debt sustainability and realize Sri Lanka’s growth potential. “.

Other challenges that need to be addressed include containing rising levels of inflation and responding to severe balance of payments pressures.

The EEF is the IMF’s lending facility and helps countries deal with balance of payments or cash flow problems.

— Su-Lin Tan

China’s central bank lowers interest rates

The People’s Bank of China cut its benchmark one-year lending rate by 5 basis points and its five-year rate by 15 basis points, according to an online statement.

This brings the one-year loan prime rate to 3.65% and the five-year LPR to 4.3%.

Analysts polled by Reuters expected the LPR to be cut by 10 basis points over one year, and half of survey respondents expected the five-year rate to be cut by 15 basis points.

—Abigail Ng

CNBC Pro: How to Reduce Risk in Your Portfolio Right Now, According to the Pros

Equities have been volatile this year as a mix of recession fears, inflationary pressures and other macro risks rock markets.

Here are three ways investors can adjust their portfolios to reduce their risk or mitigate their losses, according to Goldman Sachs, Wells Fargo and others.

Pro subscribers can learn more here.

—Weizhen Tan

CNBC Pro: JPMorgan predicts when growth stock rally will end

Investors have been flocking to growth stocks lately, but as recession fears grow, market watchers are deciding to turn to safer bets instead.

JPMorgan, however, thinks the rally still has some way to go and has named several indicators to watch when considering a spin out of growth stocks.

Pro subscribers can read the story here.

— Zavier Ong

What to expect from Powell’s speech in Jackson Hole

Fed Chairman Jerome Powell is expected to address the central bank’s annual symposium in Jackson Hole, Wyoming this week and shed some light on the pace of future interest rate hikes.

Powell could point to hawkish comments from Fed officials who have recently underlined their commitment to fighting inflation, even as investors enjoyed a summer rally partly on expectations of a less aggressive Fed.

Still, St. Louis Fed President James Bullard said in an interview last week with The Wall Street Journal that he was considering another 0.75 percentage point interest rate hike when the September meeting.

Check out CNBC Pro for more on what to expect from the Fed chair.

—Sarah Min

China set to lower benchmark lending rates, Reuters poll finds

China is expected to release its prime lending rates (LPR) on Monday, with analysts widely expecting cuts according to a Reuters poll.

The majority of analysts expected the benchmark one-year lending rate to be cut by 10 basis points, while they expected the five-year LPR to be cut by more than 10 basis points.

About half of the 30 poll participants expect a cut of 15 basis points, Reuters reported.

The one-year LPR is currently at 3.7% after falling in January, and the five-year rate is at 4.45%. China cut the five-year LPR by 15 basis points in May, which would have supported housing demand.

—Abigail Ng

#Asian #markets #fall #investors #weigh #concerns #Fed #hikes #China #lowers #benchmark #interest #rates