The Federal Reserve held a meeting on interest rates in January and made a statement on the hawk side
In the early morning, the Federal Reserve announced its interest rate resolution and kept the interest rate unchanged at 0-0.25%, which was in line with expectations. The monthly asset purchase scale will be reduced by US $30 billion and remain unchanged. The asset purchase will end in early March. The Fed stressed that it would appropriately raise the federal funds rate soon and said it would start to reduce its balance sheet after raising interest rates.
In terms of inflation and employment, the imbalance between supply and demand leads to high inflation. The imbalance between supply and demand related to the covid-19 pneumonia epidemic and the reopening of the economy continue to lead to an increase in inflation. In recent months, employment growth has been strong and the unemployment rate has fallen sharply.
Powell issued hawkish remarks at the press conference after the interest rate resolution, saying that the possibility of raising interest rates at each FOMC meeting could not be ruled out. It is necessary to shrink the table on a large scale. I hope it is an orderly and predictable process. The overall statement is more hawkish than the previous one. After the FOMC statement, according to CME “fed observation”. The probability of the Federal Reserve maintaining the interest rate in the range of 0% – 0.25% in March is 5%, and the probability of raising the interest rate by 25 basis points has increased to 93.3% from 88.2% before the interest rate increase. Interest rate increase or high probability in the second quarter. In terms of market performance, US stocks fell on hearing the news, and the US dollar index closed up. Although the market may have priced the probability of three or even four interest rate increases, monetary tightening will still be bad for the US equity market in essence.
For China, according to the recent statement of the central bank and the interest rate cut to protect liquidity, China adheres to the principle of stability and self focus, enhances the flexibility of the RMB exchange rate, maintains the basic stability of the RMB exchange rate at a reasonable and balanced level, and actively and steadily responds to the monetary policy adjustment of developed economies. In the first quarter, China’s liquidity as a whole will remain neutral and slightly loose.
Financing funds
On January 25, the balance of A-share financing was 1664.835 billion yuan, a month on month decrease of 9.146 billion yuan; The balance of margin trading was 1764.332 billion yuan, a decrease of 12.808 billion yuan month on month. The balance of financing minus securities lending was 1565.338 billion yuan, a month on month decrease of 5.484 billion yuan.
Land stock connect and Hong Kong stock connect
On January 26, the net purchase turnover of land stock connect on that day was 1.139 billion yuan, including 51.161 billion yuan of purchase turnover and 50.022 billion yuan of sales turnover, with a cumulative net purchase turnover of 1678.442 billion yuan. Hong Kong stock connect had a net purchase transaction of HK $4.646 billion on the same day, including a purchase transaction of HK $17.869 billion and a sale transaction of HK $13.224 billion, with a cumulative net purchase transaction of HK $2228.625 billion.
Money market
On January 26, Bank Of Shanghai Co.Ltd(601229) inter-bank offered rate Shibor overnight interest rate was 1.7400%, down 19.10bp, Shibor one week was 2.0880%, down 0.50bp. The weighted interest rate of pledged repo of deposit institutions was 1.7223% overnight, down 19.81bp and 2.0131% a week, up 2.13bp. The 10-year yield to maturity of China national debt was 2.7146%, up 1.67bp.
Overseas stock market
On January 26, the Dow Jones Industrial Average closed at 34168.09 points, down 0.38%; The S & P 500 index closed at 4349.93 points, down 0.15%; The NASDAQ index closed at 13542.12 points, up 0.02%. European stock markets, French CAC index closed at 6981.96 points, up 2.11%; Germany’s DAX index closed at 15459.39 points, up 2.22%; The FTSE 100 index closed at 7469.78, up 1.33%. In the Asia Pacific market, the Nikkei index closed at 27011.33 points, down 0.44%; The Hang Seng Index closed at 24289.90, up 0.19%.
Foreign exchange rate
On January 26, the dollar index rose 0.51% to 96.4886. The euro fell 0.57% against the dollar to 1.1238. The dollar rose 0.71% against the yen to 114.6700. The pound fell 0.27% against the dollar to 1.3465. The spot exchange rate of RMB against the US dollar closed at 6.3219, up 0.05%. The spot exchange rate of offshore RMB against the US dollar closed at 6.3351, depreciating by 0.06%. The central parity rate of RMB against the US dollar closed at 6.3246, up 0.27%.
Gold, crude oil
On January 26, Comex gold futures fell 1.59% to close at US $1818.80/oz. WTI crude oil futures rose 2.32% to close at US $87.15/barrel. Brent crude oil futures rose 0.51% to close at US $88.53/barrel. COMEX copper futures fell 0.04% to close at US $4.4570/lb. LME copper three-month futures rose 0.60% to close at US $9906 / ton.
