I. China's expectation of steady growth continues to strengthen. On February 25, the Politburo meeting called for "strengthening the implementation of macro policies and stabilizing the overall economic market." In addition, the central bank, the Ministry of finance, the national development and Reform Commission and other parts have successively introduced steady growth policies and measures to strengthen the expectation of steady growth. Since December last year, China's macro policy has significantly shifted to steady growth, with a more positive policy tone. Fiscal and monetary policies have been launched simultaneously. At present, wide money and credit have been implemented, the issuance of special bonds has been accelerated to focus on infrastructure development, and the real estate policy has been moderately relaxed. The meeting proposed to strengthen the implementation of macro policies, indicating that the positive policies will continue to work. We expect that there will still be a large room for improvement in the wide credit. At the same time, the formation of special bonds will further accelerate the physical workload in the future, and the scope and intensity of real estate policy relaxation will be further expanded.
II. The situation in Russia and Ukraine continues to deteriorate. On February 24, Putin decided to carry out special military operations in the Donbas region, and the war between Russia and Ukraine officially broke out. From the current information, Russia aims to accurately attack Ukraine's armed forces and military infrastructure. NATO said it had no plans to send NATO troops to Ukraine. After the outbreak of war in Russia and Ukraine, the leaders of the group of seven (G7) met on the 24th. Biden announced that the G7 led by the United States agreed to adopt "devastating sanctions" against Russia. On the morning of the 27th, the United States, the European Union and the United Kingdom issued a joint statement announcing the latest sanctions against Russia: banning several major Russian banks from using the "Global Banking Financial Telecommunications Association" payment system (Swift) and implementing "restrictive measures" against the Russian central bank. Considering the huge influence of swift, this sanction is undoubtedly a financial bomb.
In the short term, several sanctions announced by Europe and the United States earlier are relatively controllable in the degree and scope of impact, but they inevitably add some disturbance to the tense situation of the existing supply chain, forming a de facto "supply shock". At the same time, considering that Swift is a financial communication infrastructure connecting the global banking industry and is crucial to various economic fields, including trade, foreign investment, remittance and the central bank's management of the economy, cutting off the connection between Russian banks and swift may cause Russian financial chaos, reduce short-term trade income, and then affect current account and fiscal revenue. In 2014, due to the deactivation of swift system, Russia had a serious financial crisis and a long-term financial paralysis. However, Russia has made corresponding response before the war. In addition to establishing its own financial information and payment system, it has also diversified its foreign exchange assets in the past few years. The Russian central bank currently has US $630 billion in foreign exchange reserves, of which 130 billion in gold and 500 billion in foreign reserves are only about US $10 billion in debt. Therefore, further details of the progress of subsequent sanctions against oil exports and swift deserve close attention.
III. the deterioration of the situation in Russia and Ukraine has stimulated the rise of commodity prices. Before the war, the market mostly expected that there would be no military conflict between Russia and Ukraine, and after the outbreak of military conflict, the market mostly expected that the sanctions in Europe and the United States would be limited... However, the current situation continues to exceed market expectations, and even in the worst direction. Two basic facts can be clarified here: first, Russia and Ukraine are important suppliers of crude oil, natural gas, rare metals and Shenzhen Agricultural Products Group Co.Ltd(000061) important commodities in the world, and the risk of commodity supply interruption caused by conflict continues to rise; Second, the United States and NATO have made it clear that they will not intervene militarily in the conflict between Russia and Ukraine, and the West will continue to upgrade economic sanctions as the situation develops. Therefore, the subsequent impact of the situation in Russia and Ukraine on the capital market depends on whether Russia can quickly win and reach an agreement through negotiation, so as to minimize the impact of the global supply chain.
