Core conclusion
The Russian Ukrainian negotiations have repeatedly triggered a rise in risk aversion in overseas markets. The evolution of the conflict between Russia and Ukraine includes three stages: War, blockade and trade embargo. Since its launch on February 24, the market has quickly digested the rise in risk aversion caused by local war conflicts. However, with the recent tug of war between Russia and Ukraine and the gradual escalation of sanctions against Russia by major European and American economies, the market is reassessing the overall risk, including the performance of commodity prices, Market concerns about Russian energy export sanctions are rising rapidly, which has also triggered a new round of risk aversion in the market.
China’s inflation concerns caused by the rapid rise in commodity prices. The price of oil distribution rose above $130 / barrel, China Shipbuilding Industry Group Power Co.Ltd(600482) coal futures rose sharply, non-ferrous metals such as aluminum, nickel and copper, as well as Shenzhen Agricultural Products Group Co.Ltd(000061) such as wheat, soybean and corn reached an all-time high, and the Comex gold point was close to the $2000 mark. This has also triggered a reassessment of inflation risk in the Chinese market. In the medium term, we believe that inflation is going to be a high probability event, but in the short term, the price performance of some energy products and non-ferrous metals is breaking away from fundamentals.
China’s epidemic situation has been repeated again, causing the market to worry about the progress of offline economic reopening. According to the statistics of the Health Commission, 327 covid-19 cases and 442 asymptomatic infections were added yesterday, a new high since March 2020. In particular, the number of asymptomatic infections in economically developed areas such as Shanghai, Guangdong and Shandong has increased rapidly, which has also triggered concerns about the progress of offline economic repair.
Looking forward to the future, the escalation of the conflict between Russia and Ukraine has been gradually expected by the market. It is expected that the price of industrial resource products will return to rationality and the epidemic situation in China will be effectively controlled in the future. With the implementation of the Fed’s interest rate hike, it is expected to promote the recovery of risk sentiment at home and abroad, superimpose the window period of the annual report and the first quarterly report and the correction of liquidity expectations, there is still a meal market in the A-share market in the first half of the year. In terms of industry configuration, with the advent of the verification period of the first quarterly report, the boom track leaders such as new energy, semiconductors, medicine and military industry are expected to usher in phased repair, and the essential consumption sectors such as agriculture, food and textile and clothing benefiting from inflation expectations are also expected to usher in performance repair. In the medium term, social service, retail, catering, shipping and other offline economic recovery related industries are also ushering in the layout window period.
The pace of trade between China and the United States is lower than expected, and the risk of geopolitical conflict is higher than expected.
