1. China’s Central Bank Injects $100 Billion
2. Rising Treasury Yields Hit Ethereum
3. Economists Raise U.S. GDP Forecast
4. PIMCO Sells Discounted Loans from 2022
5. Evergrande Revises Restructuring Plan
6. Eli Lilly to Test Weight-Loss Drug on 6-Year-Olds
7. Hong Kong Home Prices Hit 6-Year Low
1. China’s Central Bank Injects $100 Billion
Today, the People’s Bank of China (PBOC) injected ¥733 billion ($100 billion) into banks through short-term debt instruments—the largest such infusion in history.
The new liquidity is expected to support economic growth and provide banks with more reserves.
With tax season approaching, central and local governments plan to issue more bonds to fund ongoing fiscal stimulus.
This round of support may use up much of the year’s tax revenue and previously issued bonds.
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2. Rising Treasury Yields Hit Ethereum
Ethereum, the second-largest cryptocurrency, offers staking yields for investors, but the annualized return has dropped to 3.5%, the lowest in over 10 months—well below its peak of 8%.
Meanwhile, U.S. Treasuries now offer yields above 5%, making them more attractive than crypto for many investors.
Validator Queue data shows that staking queues have dropped from a peak of 96,500 to just 257.
JPMorgan notes that much of Ethereum has already been staked, which lowers both demand and returns.
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3. Economists Raise U.S. GDP Forecast
A Bloomberg survey shows economists now expect U.S. GDP to grow at an annualized rate of 3.5% in Q3—the fastest pace in over two years.
A strong labor market continues to support consumer spending, with improved employment forecasts for 2024.
ING Chief International Economist James Knightley noted that the U.S. economy performed very well this summer, even as inflation pressured purchasing power. Consumers have been sustaining spending with savings and credit cards.
Economists are lowering both recession odds and expected rate hikes from the Fed next year.
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4. PIMCO Sells Discounted Loans from 2022
Last year, bond giant PIMCO bought over €1 billion in unsold debt from banks at a discount of about 85% of face value.
Now, PIMCO is selling those loans at 95–99% of face value, according to sources.
Filings show that €55 million of the loans have already been sold. PIMCO has been quietly marketing the debt to interested funds in recent months.
The loans include financing for deals such as Apollo’s and Worldline’s acquisitions.
In today’s illiquid environment, large bundles of leveraged loans remain hard to offload.
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5. Evergrande Revises Restructuring Plan
Evergrande Group said in a Hong Kong stock exchange filing that it is revising its restructuring plan and working to address its current crisis and repay creditors.
Pressure is mounting for the company to be liquidated, with a Hong Kong court hearing scheduled for October 30.
China’s property crisis is spreading, and rival developer Country Garden has also been criticized for weak disclosure and regulatory gaps.
Evergrande currently holds $327 billion in debt and is increasingly at risk of liquidation.
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6. Eli Lilly to Test Weight-Loss Drug on 6-Year-Olds
Sources say Eli Lilly plans to begin clinical trials of its diabetes drug Mounjaro in patients as young as six.
Rival Novo Nordisk will also test its older weight-loss drug Saxenda on children aged six and above. Saxenda is less potent than newer drugs like Ozempic and Wegovy.
Eli Lilly’s VP of drug development, Nadia Ahmad, said the company wants to innovate across all age groups. This week, it began recruiting children 12 and up for trials.
Novo’s head of development also confirmed plans to begin trials for younger children.
Currently, the FDA has only approved GLP-1 drugs for children aged 12 and above.
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7. Hong Kong Home Prices Hit 6-Year Low
According to Centaline Property Agency, resale home prices in Hong Kong fell 1.2% in the week ending October 15.
This wiped out all price gains from earlier this year and brought prices to their lowest since April 2017.
High interest rates and a weak economy have hit housing affordability in what is already the world’s most expensive property market. Prices are now down 18% from their 2021 peak.
Morgan Stanley analysts wrote last week that Hong Kong’s home prices could continue to decline into 2024.
Even new homes priced just 10% above market are struggling to find buyers.
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This content is sourced from Financial Times, Bloomberg, and The Real Deal, among other financial news outlets.