From US Fed rates to China’s global export share: 4 figures shaping markets

In a significant move this week, the US Federal Reserve raised its benchmark interest rate by a quarter of a percentage point for the first time since 2023. The Federal Open Market Committee unanimously decided to increase the target range for interest rates from 3.75 to 4.00 per cent. This was the central bank's first rate hike in three years, as Federal Reserve chief Kevin Warsh aimed to address inflation that had been "too high" for "too long".

In response to the Fed's decision, the Hong Kong Monetary Authority followed suit by raising the city's base rate to 4.25 per cent. Despite this, three note-issuing banks in Hong Kong – HSBC, Bank of China (Hong Kong), and Standard Chartered – opted to keep their prime lending rates unchanged. The Hong Kong Monetary Authority's decision also maintained the city's status as Asia's top financial hub for the fourth consecutive year, as per the Global Financial Centres Index.

Meanwhile, the 10-year US Treasury yield dropped below the 5 per cent threshold for the first time since 2023. Following the Fed's announcement, the yield fell to about 4.94 per cent on Friday. This shift has drawn considerable market attention this week.

Looking ahead, a new Goldman Sachs report projects that China's global export share is expected to reach 31 per cent by 2035. This growth would be a significant increase from the current average market share of 18 per cent held by Chinese companies this year. The revenue of these companies is projected to grow by 3.6 times by 2035.

Goldman Sachs identifies "latecomers" in sectors like robotaxis, e-commerce, and surgical robots as having the most substantial growth potential, while "early achievers" such as carmakers may face more competition.