Key investment points
Industrial high frequency periodicity observation. 1) Inflation. This week, the price of pork dropped to 23.98 yuan / kg, the specific price of pig grain dropped sharply to 6.03, the prices of chicken and beef rose, the prices of mutton remained the same, the prices of vegetables fell and the prices of fruits rose. 2) Industry. The blast furnace operating rate fell this week, and the operating rates of medium and large capacity coking enterprises rebounded; Rebar prices rose and inventories fell this week; Copper prices fell and inventories accumulated. 3) Consumption. Film box office revenue and movie attendance continued to decline due to the spread of the epidemic. 4) Real estate. The transaction area of commercial housing in 30 cities increased slightly on a weekly basis, and the transaction area of land in 100 cities decreased on a weekly basis.
Weekly observation of financial markets. 1) The stock market. This week, the Shanghai Composite Index closed at 3632.36 points, down 0.93% from last Friday; The gem index closed at 3434.34, down 0.94% from last Friday. In terms of industry sectors, public utilities, media and architectural decoration led the rise, while household appliances, non-ferrous metals and automobiles led the decline. 2) Bond market. The yield of interest rate bonds rose and fell, the term interest spread of interest rate bonds narrowed, and the interest spread between China and the United States widened. On December 17, the yields of 1y treasury bonds, 10Y treasury bonds, 1y CDB bonds and 10Y CDB bonds closed at 2.32%, 2.85%, 2.44% and 3.10% respectively, and the week on week ratio changed by 4bp, 1bp, 6BP and 0.3bp respectively; This week, the term spreads of 10y-1y treasury bonds and CDB bonds were 53bp and 66bp respectively, and the week on week ratio changed by – 4bp and – 6BP respectively; The interest rate difference between China and the United States closed at 144bp this week and widened by 8bp. 3) Commodities. Commodity prices rose and fell this week, rebar, coke, thermal coal, PTA and soybean meal futures prices rose, cathode copper, soybean oil and white granulated sugar futures prices fell, cement price index fell, Nanhua metal index rose, and ine crude oil futures prices fell to close at 470.4 yuan / barrel.
Weekly observation of macro policy. 1) Monetary policy. This week (12.13-12.17) in the open market, a total of 50 billion yuan was invested in reverse repo, 50 billion yuan was invested in reverse repo, 500 billion yuan was invested in MLF, 950 billion yuan was invested in MLF, and 450 billion yuan was recovered in the broad open market throughout the week. Dr001 and dr007 closed at 1.84% and 2.11% respectively, and the yields of Shibor and 1y interbank certificates of deposit closed at 2.49% and 2.71% respectively in March. 2) policy developments. Recently, the Ministry of finance has issued advance to all localities The newly increased special debt limit of 1.46 trillion yuan in 2022 is, and it is clear that the special bonds in 2022 will be mainly used in 9 directions.
Core view. 1) Pork prices fell and ine crude oil prices fell. From the perspective of inflation, the excess supply of pork combined with the weakening of seasonal needs, the pork price fell this week, and the pig grain price ratio continued to decline. In terms of supply, the blast furnace operating rate continued to decline this week, and the operating rate of medium and large capacity coking enterprises continued to rise. However, due to the weak demand for infrastructure and real estate and the dual control of energy consumption, the operating rate level remained weak; Rebar prices rose, copper prices continued to decline, and inventories began to accumulate. In terms of demand, the epidemic situation in China has spread in many places, and the film box office revenue and person times have dropped; The release of chip production capacity weakened the year-on-year decline of Automobile wholesale and retail; The transaction area of commercial housing in 30 cities increased slightly month on month, and the transaction area of land in 100 cities fell month on month. Although the margin of real estate policy has been loosened, it has not been transmitted to the sales end and land transaction level. 2) Domestic demand continued to slow down, and the policy released the bottom signal. Industrial production continued to pick up. In November, the added value of industries above designated size increased by 3.8% year-on-year, an increase of 0.3 percentage points over the previous month; Benefiting from the rectification of “ensuring supply and stabilizing price”, “dual control of energy consumption” and structural policies, industrial production continued to improve. Domestic demand continued to slow down. In November, the social zero increased by 3.9% year-on-year, down 1.0 percentage points from the previous month; Disturbed by the scattered points of the epidemic, catering revenue fell sharply, dragging down the zero growth rate of social security in November, which had a certain impact on the repair of Chinese consumption. The Ministry of Finance issued in advance the new special debt limit of 1.46 trillion yuan in 2022, and made it clear that the special bonds in 2022 will be mainly used in 9 directions. At present, although China’s economy is facing “triple pressure”, under the goal of stable growth, coordination and linkage of fiscal policy and monetary policy, and organic combination of cross cycle and counter cycle will help to promote economic stabilization.
Risk tip: the risk of epidemic spread in China and the risk of inflation exceeding expectations.
