A week’s events
China: last year’s economy and Commerce operated smoothly, and this year’s consumption and foreign trade will continue to be supported by various guarantees. On February 28, the Ministry of industry and information technology proposed that the next step would focus on innovation and breakthroughs in basic and key fields, enhance the toughness of industrial chain and supply chain, increase relief and assistance to small and medium-sized enterprises, strengthen the construction of new information infrastructure, continue to promote the digital and green transformation of manufacturing industry, further strengthen factor guarantee, implement a number of industrial infrastructure reconstruction projects, through tax reduction Subsidies, going to the countryside and other measures to expand consumer demand will continue to strengthen the support for the industrial economy; On the same day, as the national average pig grain price ratio has fallen into the level-1 early warning range recently, the national development and Reform Commission launched the collection and storage of the central frozen pork reserve. In the short term, the imbalance between supply and demand of live pigs may continue. In the medium and long term, after the collection and storage work is started, the pork price is expected to rise moderately to a reasonable range; On March 1, the Ministry of Commerce introduced the relevant situation of adhering to the principle of keeping the word steady and promoting the high-quality development of Commerce. Last year, China’s business operation was stable and better than expected. This year, various safeguard measures have strongly supported the stability of China’s consumption and foreign trade. It is suggested to continue to pay attention to smart consumption, green consumption represented by new energy vehicles, and incremental opportunities in rural consumption; On March 2, Guo Shuqing, chairman of Bank Of China Limited(601988) Insurance Regulatory Commission, introduced the situation of risk resolution in the financial field at the press conference of the State Council Information Office. The financial risks in key areas have been controlled. It is suggested to pay attention to the marginal changes in the financing and real estate regulatory environment of the urban investment industry; On March 3, the financial stability bureau of the central bank issued a document reconfirming the current controllable situation of China’s financial risks. Under the background of stable growth, it has created favorable conditions for continuing to promote the marginal relaxation of credit policies in the real economy and real estate.
Overseas: the tension between Russia and Ukraine has not improved, and the strong demand from Europe and the United States has boosted the economic recovery. On February 28 local time, Japan released the industrial output data after the quarterly adjustment, which showed that the industrial output fell for two consecutive months, and the decline in retail sales also exceeded market expectations. The Bank of Japan may take stimulus measures. However, with the tightening wave of other central banks around the world, the Bank of Japan may consider adjusting policies, but it needs to pay close attention to the changes in energy costs and the situation in Russia and Ukraine; On March 1 local time, Europe and the United States released the PMI data of manufacturing industry. The impact of the recent epidemic on consumption and supply chain has been alleviated, market demand has increased, and manufacturing economic activities have gradually resumed. In the follow-up, we need to be vigilant against the upward risk of inflation caused by the Russian Ukrainian crisis, which will lead to economic recession; On March 2 local time, the Federal Reserve issued the economic beige book. The economy of the 12 jurisdictions expanded steadily and there were differences between industries and regions, but they were still affected by high inflation, supply chain problems and labor shortage. It is expected that the interest rate meeting in March will increase by 25 basis points; On March 3 local time, the second round of talks between Russia and Ukraine ended, and still no substantial progress was made. However, the two sides reached an agreement on a temporary ceasefire and the establishment of humanitarian channels, and the third round of negotiations will be held as soon as possible. Affected by the conflict between Russia and Ukraine, energy prices continue to rise, and the increase of Western sanctions against Russia has caused tension in the global supply chain, It is necessary to continuously track the negotiation progress of both parties in the follow-up.
High frequency data: upstream: the prices of crude oil, iron ore and cathode copper rose week on week; Midstream: the price index of means of production and the price of rebar decreased on a weekly basis; Downstream: real estate sales picked up on a weekly basis, and auto retail continued to pick up; Prices: vegetable prices rose on a weekly basis, while pig prices fell on a weekly basis.
Focus next week: China’s February trade account (Monday); China’s February social financing scale, M1, M2 (Tuesday); China’s February inflation data, Japan’s fourth quarter GDP (Wednesday); ECB interest rate resolution (Thursday); U.K. consumer confidence index on Friday, March.
Risk tip: Overseas inflation is high, the impact of China’s scattered epidemic is higher than expected, and the demand recovery is lower than expected.
