A week’s events
China: the central bank will turn in trillions of profits, and the new infrastructure may grow rapidly. On March 7, relevant personnel from the Ministry of Commerce said that RCEP can promote the development of regional industrial chain and supply chain. The reduction of tariffs can bring practical dividends to both import and export sides. With the gradual release of institutional dividends, the economic and trade development achievements of RCEP members will be further demonstrated; On the same day, the press conference on “upholding stability and seeking progress while maintaining stability and promoting new progress in high-quality development” held by the national development and Reform Commission made work arrangements in the field of promoting consumption and new infrastructure. There is huge space for green and rural consumption, and the demand for computing power is expected to drive the rapid growth of investment in new infrastructure such as data centers; On March 8, the Minister of industry and information technology responded to issues related to the industrial economy at the “Ministerial channel”. From January to February, the industrial economy operated smoothly. The next step will focus on breaking through the blocking points of the industrial chain supply chain and actively establishing first-class enterprises. The high-level industry represented by digital and new energy is expected to maintain high growth; On the same day, the people’s Bank of China turned over more than 1 trillion yuan of balance profits to the central government according to law, which were mainly used to offset tax rebates and increase transfer payments to local governments, so as to support the relief of enterprises, stabilize employment and ensure people’s livelihood. At the same time, the gradual convergence of China’s financial risks provides space for increasing cross cycle regulation; On March 9, the Ministry of agriculture and rural areas issued the national agricultural and rural informatization development plan for the 14th five year plan to promote agricultural and rural informatization to support the overall revitalization of villages, Jiangsu Nonghua Intelligent Agriculture Technology Co.Ltd(000816) will strengthen agricultural production efficiency, Shenzhen Agricultural Products Group Co.Ltd(000061) digitization of industrial chain will improve the supply efficiency and quality of Shenzhen Agricultural Products Group Co.Ltd(000061) and China’s Shenzhen Agricultural Products Group Co.Ltd(000061) online retail sales are expected to maintain rapid growth.
Overseas: the interest rate resolution of the European Central Bank is partial to the eagle, and the situation in Russia and Ukraine has led to fluctuations in the global asset market. On March 6 local time, the US House of Representatives explored the formulation of a bill banning the import of Russian oil and energy. It is expected that the international energy price will be difficult to fall in the short term, and the risk of increased inflation may affect the interest rate increase range of the Federal Reserve; On the evening of March 7 local time, the third round of Russian Ukrainian negotiations ended, and no substantive progress has been made on the ceasefire. The Russian Ukrainian conflict may further push up energy prices and increase the uncertainty of inflation prospects; On March 8 local time, data released by Japan showed that Japan’s trade account in January was a trade deficit for three consecutive months. International oil prices continued to rise, raising import costs and expanding the trade deficit. The Bank of Japan reiterated that it would not tighten monetary policy; On March 8 local time, data released by the United States showed that the trade deficit in January increased by 9.4% compared with December last year, which will continue to drag down GDP in the first quarter. It is necessary to pay attention to the impact of the conflict between Russia and Ukraine on energy and trade; On March 8 local time, the London Metal Exchange announced that the nickel trading in some periods was cancelled, and the nickel futures quotation increased by 174% in two days, which may be related to Russia’s being kicked out of the global commodity trading market. Russia is also an important supplier of palladium, aluminum and copper in the world, so it needs to prevent the risk of sharp fluctuations in the price of related financial assets; On March 10 local time, the inflation data released by the United States showed that the CPI increased by 7.9% year-on-year in February. The expected rising inflation makes the tightening action of the Federal Reserve more urgent; The European Central Bank decided to keep the benchmark interest rate unchanged in October, and the European Central Bank will increase the risk of inflation in March.
High frequency data: upstream: the prices of Brent crude oil and iron ore increased by 13.01% and 9.85% on a weekly basis respectively; Midstream: the blast furnace operating rate of Tangshan steel plant decreased by 11.91 percentage points this week, and the price of rebar increased slightly on a weekly basis; Downstream: real estate sales fell by 25.2% on a week-on-week basis, and automobile retail sales fell by 13% year-on-year; Prices: pork prices fell 0.78% week on week.
Focus next week: China’s total retail sales of social consumer goods from January to February year-on-year, and the PPI of the United States in February year-on-year and month on month (Tuesday); Us FOMC interest rate decision (Thursday); Bank of Japan policy rate (Friday).
Risk tip: geopolitical impact exceeded expectations, overseas inflation was high, and the epidemic situation further deteriorated.
