Key investment points
Industrial high frequency periodicity observation. 1) Inflation. Last week (02.21-02.25, the same below), the price of pork fell to 18.64 yuan / kg, the price of pig grain rose to 4.59, the price of chicken rose slightly, the price of beef and mutton fell, the price of vegetables rose and the price of fruit fell. 2) Industry. Last week, the operating rates of coking enterprises with production capacity rose, the price of rebar fell, and the inventory continued to accumulate; Copper prices fell and inventories accumulated. 3) Consumption. The year-on-year growth rate of Automobile wholesale and retail has rebounded significantly, and the film box office revenue and film viewers have decreased significantly. 4) Real estate. The transaction area of commercial housing in 30 cities rose on a weekly basis, and the transaction area of land in 100 cities rebounded on a weekly basis.
Weekly observation of financial markets. 1) Stock market. Last week, the Shanghai Composite Index closed at 345141 points, down 1.13% week on week; The gem index closed at 285580, up 1.03% week on week. In terms of industry sectors, electrical equipment, national defense and military industry and electronics led the rise, while architectural decoration, building materials and media led the decline. 2) Bond market. The yield of interest rate bonds generally rose, the term interest rate spread of interest rate bonds narrowed, and the interest rate spread between China and the United States narrowed. On February 25, the yields of 1y treasury bonds, 10Y treasury bonds, 1y CDB bonds and 10Y CDB bonds closed at 2.02%, 2.78%, 2.13% and 3.04% respectively, with weekly changes of 5bp, – 2bp, 11bp and 3bp respectively; The term spreads of 10y-1y treasury bonds and CDB bonds were 75bp and 92bp respectively, and the week on week ratio changed by – 7bp and – 8bp respectively; The interest rate difference between China and the United States closed at 81bp and narrowed by 7bp. 3) Commodities. Last week, commodity prices rose and fell, rebar, thermal coal and cathode copper futures prices fell, coke, PTA, soybean meal, soybean oil and white granulated sugar futures prices rose, cement price index fell, Nanhua metal index fell, and ine crude oil futures prices continued to rise to close at 621.80 yuan / barrel.
Weekly observation of macro policies. 1) Monetary policy. Last week, a total of 810 billion yuan was invested in reverse repurchase in the open market, 50 billion yuan was due for reverse repurchase, and 760 billion yuan was invested in the broad open market in the whole week. Dr001 and dr007 closed at 2.18% and 2.34% respectively, and the yield of Shibor and 1y interbank certificates of deposit closed at 2.37% and 2.53% respectively in March. 2) Policy developments. The Political Bureau of the CPC Central Committee held a meeting on February 25 to discuss the draft of the government work report to be submitted by the State Council to the fifth session of the 13th National People’s Congress for consideration, and to consider the comprehensive report on the eighth round of inspection of the 19th Central Committee and the report on the key work of the central inspection leading group in 2021.
Core view. 1) The margin of real estate relaxed and car sales picked up. From the perspective of inflation, the fall of seasonal demand superimposed on the excess supply of pork and the mismatch of supply and demand pattern. Last week, the price of pork continued to fall and the price ratio of pig to grain rebounded. From the perspective of supply, the operating rates of coking enterprises with various capacity have increased; Rebar prices and copper prices fell, and inventories continued to accumulate. From the perspective of demand, the wholesale and retail of automobiles rebounded sharply year-on-year, and the box office revenue and person times of films fell to some extent; The transaction area of commercial housing in 30 cities rose month on month, the transaction area of land in 100 cities rebounded month on month, the demand for real estate continued to improve, and the number of cities that reduced the down payment ratio continued to increase. The Ministry of housing and urban rural development issued a document mentioning the need to maintain the continuity and stability of regulatory policies, enhance the accuracy and coordination of regulatory policies, and strengthen the guidance and supervision of urban “one city, one policy”, The demand side policy margin of the real estate industry is relaxed. 2) The conflict between Russia and Ukraine pushed up bulk prices and global inflationary pressure. Economically, the impact of the conflict between Russia and Ukraine on China’s economy is relatively controllable. By 2021, China’s import dependence on Russia and Ukraine was only 3% and 0.4% respectively, and its export to Russia and Ukraine accounted for only 2.0% and 0.3% of the total export. China’s import and export dependence on Russia and Ukraine was low, and the impact of the war on its economy was relatively controllable. In terms of inflation, Russia, as an important exporter of crude oil and natural gas, accounts for about 12% and 17% of the world’s output respectively. The Russian Ukrainian war may push up commodity prices and increase global inflationary pressure. Europe and the United States may be forced to speed up the process of raising interest rates and shrinking tables. From the perspective of market sentiment, the conflict between Russia and Ukraine has led to a rise in global risk aversion, and the prices of safe haven assets such as gold and the US dollar may rise sharply.
Risk tip: there is a risk of epidemic spread in China, and the overseas situation has changed more than expected.
