China Holds Lending Rate at 3.00%; Morgan Stanley Raises Amazon Target
Key Facts
China kept its benchmark lending rates unchanged in October 2026, extending its hold to 17 consecutive months, according to Reuters, alongside stronger-than-expected economic growth and continued weakness in the property sector. The one-year loan prime rate remained at 3.00%, while the five-year rate stayed at 3.50%, with neither tenor adjusted in the monthly setting. The continued hold followed Chinese gross domestic product growth of 4.5% year-on-year in the third quarter, the agency reported. The economy exceeded growth expectations for the period while lending rates remained at their previous levels. The decision thus coincided with stronger-than-expected economic performance, against continued pressure on housing demand.
China's loan prime rates are calculated monthly after a designated group of commercial banks submits proposed rates to the People's Bank of China, according to Reuters' explanation of the pricing mechanism. The group comprises 20 commercial banks that submit rates used to calculate the monthly lending benchmark. The setting concerns benchmark lending rates, which differ from the Chinese central bank's policy instrument rate. In the property backdrop to the decision, new home prices fell again in September, according to the agency, as the recovery in property demand remained weak. The renewed decline in home prices in the month before the October setting kept property market weakness in focus alongside improved performance in the broader economy during the third quarter.
In U.S. equities, Morgan Stanley raised its Amazon share price target to $350 from $335, according to a report published by Investing.com on Monday, while maintaining its previous investment recommendation. The bank retained its "Overweight" rating, limiting the revision to the price target without changing the accompanying rating. The bank's upward revision to its growth outlook for Amazon's cloud computing business was based on expectations of increased shipments of Nvidia graphics processors, according to the report on the recommendation. Amazon shares rose more than 4.3% during Monday trading, according to the intraday move recorded when the report was published. The price target revision reflected the bank's optimism about the cloud computing business, with its assessment based on expected supplies of those processors.
Amazon's cloud computing business posted sales of $42.2 billion in the second quarter of 2026, according to the company's earnings release filed with the U.S. Securities and Exchange Commission. The company said in the release that sales "rose 37% year-on-year," accelerating from the growth rate recorded in the previous quarter. First-quarter sales growth was 28% year-on-year, according to the Associated Press, providing a direct comparison for the pace of expansion in the following period. On profitability, the cloud computing business generated operating profit of $16.6 billion in the second quarter, compared with $10.2 billion in the corresponding period of 2025, according to the company's release. On the second-quarter earnings call, Chief Executive Andy Jassy said Amazon expected annual capital expenditure of $220 billion in 2026, the Associated Press reported.
In the oil market, Goldman Sachs estimated the risk premium embedded in spot Brent crude prices at nearly $25 per barrel above fair value, according to its assessment published in October 2026. The bank linked the premium to the possibility of escalation and the associated risks of supply disruption in its analysis of the factors keeping prices elevated. It said "escalation threatens supplies," identifying risks to oil flows as a driver of persistently high prices. Alongside supply risks, the bank cited strong demand to rebuild inventories as another factor supporting prices. Its explanation thus combined potential threats to crude supply with existing demand to replenish inventories in its assessment of the spot Brent market.
On the outlook for prices, Goldman Sachs expects Brent crude to trade at $90 per barrel in December 2026 under a scenario in which prices gradually decline as supplies recover. The bank had previously forecast $85 per barrel for the same month before raising its estimate to the new level. The revision concerns a year-end price target, while the bank's projected trajectory remains downward as supplies return. This scenario links a gradual decline in prices to improved supply, against the factors the bank cited as currently supporting spot prices. Further out, Goldman Sachs expects Brent crude to average $80 per barrel in 2027.