Quick Summary Nvidia posted a 75.2% adjusted gross margin , among the highest in Big Tech AI hyperscalers plan US$650B capex in 2026 , much flowing to Nvidia Rivals like AMD, Alphabet and Amazon are gaining traction Long-term margin sustainability remains the key investor question Margins Steal the Show While investors already expected strong demand, NVIDIA Corp surprised with something even more impressive: Adjusted gross margin of 75.2% , the highest since late 2024 — and management expects similar levels next quarter. For a nearly US$5 trillion company , that margin signals extraordinary pricing power in AI hardware. AI Spending Wave Still Intact AI hyperscalers are forecasting ~US$650 billion in capex for 2026 , up roughly 60% from 2025. Nvidia remains the primary beneficiary as demand for data centre GPUs continues to surge. But maintaining 75% margins depends on two big factors: 1️⃣ Supply Constraints Rising memory costs remain a ris...
Quick Summary
China kept its benchmark lending rates unchanged for the ninth straight month
1-year LPR stays at 3.0%, 5-year LPR at 3.5%
Authorities prefer targeted tools over broad rate cuts
Growth expected to slow to 4.5% in 2026
What Happened
China left its benchmark Loan Prime Rates (LPRs) unchanged in February:
1-year LPR: 3.0%
5-year LPR: 3.5%
The decision marks the ninth consecutive month of steady rates, suggesting policymakers are not in a hurry to roll out fresh broad-based stimulus.
The rates are set by the People's Bank of China (PBOC).
Why No Immediate Cuts?
While China hit its ~5% growth target in 2025, largely thanks to strong exports, several headwinds persist:
Structural imbalances
Industrial overcapacity
Weak domestic consumption
Rising geopolitical tensions
A Reuters poll forecasts growth slowing to 4.5% in 2026.
Key point: Policymakers appear to be conserving policy ammunition rather than deploying aggressive easing early in the year.
Targeted Easing Already in Play
Last month, the PBOC:
Cut rates on structural monetary tools by 25 basis points
Signalled room for:
Reserve Requirement Ratio (RRR) cuts
Broader rate reductions later in 2026
Analysts believe:
There is room for further easing
But a first-quarter cut is unlikely
Policy Strategy: Flexible, Gradual, Controlled
According to Tianfeng Securities:
The central bank is using policy tools to guide expectations carefully
Flexibility and timing are prioritised
Any future cuts may be incremental rather than aggressive
Market Implications
Stability in LPR reduces near-term volatility in:
Property lending
Corporate borrowing costs
Signals confidence that recent targeted easing is sufficient for now
Leaves room for action if growth deteriorates further
Bottom Line
China is holding steady — but not standing still.
The PBOC is choosing a measured approach, favouring targeted support over headline rate cuts. While growth is expected to moderate in 2026, policymakers appear determined to preserve flexibility amid global uncertainty.
Key Takeaways
LPR unchanged for ninth straight month
Broad rate cuts unlikely in Q1
Further RRR reductions possible later this year
Growth slowing, but policymakers not rushing
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