The People’s Bank of China cut its one-year policy lending rate by 10 basis points to 2.75 percent and the 7-day resale rate to 2 percent from 2.1 percent on Monday. It defied economists’ expectations that the central bank would act to cut interest rates. Citing Wen Bin, chief economist at China Minsheng Bank, Financial News reported that for the economy to recover further, the growth rate of infrastructure investment needed to accelerate, especially since the recovery momentum has slowed. Wen also said that weak domestic demand is a problem for the economy and Beijing should implement policies that would boost economic growth. Wang Qing, chief macroeconomic analyst at Dongfang Jincheng, was also quoted as saying that Beijing will likely tighten fiscal and industrial policies to boost the recovery. Luo Huanjie, a senior macro researcher at the Zhixin Investment Institute, said that in view of possible future pandemic cases, Beijing should prioritize adjusting macroeconomic policies in an effort to further improve the economy. -Su-Lin Tan

China’s rate cuts are a modest first step, professor says

The People’s Bank of China’s surprise rate cuts in borrowing costs for medium-term policy loans are a modest first step, according to Eswar Prasad, senior professor of international trade policy at Cornell University. “The rate cut that we’ve seen right now is very modest. Ten basis points is not much, although it does release some liquidity,” he told CNBC’s “Squawk Box Asia” on Tuesday. The PBOC cut its medium-term lending facility for 400 billion yuan ($59.3 billion) loans to some financial institutions by 10 basis points to 2.75 percent, according to a statement posted on the central bank’s website. It also cut the seven-day resale rate by 10 basis points to 2%. “It seems like a very small step. But the PBOC is trying to send a very calibrated signal here that it is ready to intervene if the circumstances were warranted,” the professor added. “I think it’s very cautious about releasing any significant monetary stimulus because they know it will create medium-term financial risks.” — Sumathi Bala

Australia to consider competition, consumer issues for social media services

The Australian Competition and Consumer Commission has said it will look into competition and consumer issues with social media services such as Facebook, Instagram, Twitter, TikTok and Snapchat. The ACCC said its report will also look at YouTube, Reddit and Discord. “We hope to examine trends in user preferences and engagement over time and examine how users choose social media services,” it said in a statement. The agency plans to examine “whether new entrants like TikTok have changed the competitive landscape.” On Friday, China published a list of algorithms that drive the success of its tech giants, including Alibaba and Tencent. The filing also mentions how Douyin, the Chinese version of TikTok, uses such data to recommend content to users. — Jihye Li

Gas prices continue to climb north as Japanese industries slow

Energy prices will continue to move north amid strong consumption, Skylar Capital Management chief trader and managing director Bill Perkins told Street Signs Asia. Rising natural gas prices have led northern hemisphere countries, including Asian ones such as Japan, to scramble for LNG imports. The Asian benchmark spot price is on an upward trajectory, while Japanese industrial shares are in the red on Tuesday. “I think these pullbacks with traders taking profits and the concerns in China about the recession and real estate conditions there. Those are concerns, but they’re outsized relative to the macro trends going on in this cycle,” he said. Perkins said there will be little let-up in the oil price surge and expects WPI crude to move north of $100 a barrel and Brent to break above $120 a barrel. -Su-Lin Tan

Anglo-Australian miner BHP soars after posting second-biggest profit in history

Shares in Anglo-Australian miner BHP soared 3.80% after posting its second-biggest profit in history and a record $16.3 billion dividend. Results for the full year ended June 30 beat expectations. BHP CEO Mike Henry said BHP enters the 2023 financial year “in an excellent position strategically, operationally and financially”. He also expects China to “emerge as a source of stability for commodity demand next year, with policy support gradually taking hold.” “At the same time, we expect to see a slowdown in advanced economies as monetary policy tightens, as well as continued geopolitical uncertainty and inflationary pressures,” he said in a press release. “The direct and indirect effects of Europe’s energy crisis are of particular concern. Tight labor markets will remain a challenge for global and local supply chains.” The situation has been reversed for peers Rio Tinto and Fortescue Metals which have recorded falls. -Su-Lin Tan

The US, Japan and South Korea have completed the missile research and tracking exercise

The Pentagon said the United States Navy, the Japan Maritime Self-Defense Force and the Republic of Korea (ROK) Navy completed a missile warning and ballistic missile search and tracking exercise off the coast of the Pacific Missile Range Facility (PMRF) in Hawaii.
US, Japanese, and ROK participants shared tactical data link information pursuant to a tripartite information sharing agreement. “Following the June 11 US-ROK-Japan Trilateral Ministerial Meeting in Singapore, this missile warning and ballistic missile research and tracking exercise demonstrated the commitment of the US, Romania and Japan to promote trilateral cooperation to meet the challenges of DPRK, protecting the common security and prosperity and strengthening the rules-based international order,” the Pentagon said in a memo. -Su-Lin Tan

Chinese fast food company Yum goes mainstream in HK

Chinese fast food company Yum China Holdings announced on Monday that it has applied to convert its secondary listing to main listing status in Hong Kong. It is currently dual listed on the New York Stock Exchange. “Since our secondary listing in Hong Kong in 2020, we have strengthened access to our shareholders in Asia. We have diversified our investment base and leveraged additional fund pools,” said Joey Wat, CEO of Yum China, in a press release. “The dual primary listing would bring us even closer to our employees, customers and other stakeholders. This strategic move would further broaden our shareholder universe, increase liquidity and mitigate the risk of delisting from the NYSE,” he added. . Yum has the exclusive rights to operate fast food brands such as the KFC, Pizza Hut and Taco Bell brands in China. -Su-Lin Tan

CNBC Pro: Strategist names global stocks to buy despite slowing growth

There are pockets of “compelling value” in three sectors — even amid an economic slowdown, said Patrick Armstrong, chief investment officer at Plurimi Group. These sectors are “incredibly cheap,” he told CNBC’s “Squawk Box Europe,” naming his favorite stocks and explaining why he likes them. Professional subscribers can read the story here. — Weizhen Tan

CNBC Pro: Tesla’s valuation doesn’t make sense until it gets to that level, fund manager says

Tesla may be one of the best-known electric vehicle makers, but fund manager and tech investor Paul Meeks thinks the stock is still too expensive. Meeks revealed on CNBC Pro Talks the valuation at which he would find Tesla “most interesting.” Professional subscribers can read the story here. — Zavier Ong