Events
On March 10 local time, the latest data released by the U.S. Department of labor showed that the CPI of the United States increased by 7.9% year-on-year in February, the highest since 1982. It is expected to increase by 7.9% and the previous value increased by 7.5%; The month on month increase was 0.8%, and the previous value increased by 0.6%. Excluding energy and food prices, the core CPI increased by 6.4% year-on-year and the previous value increased by 6%.
Comments
Soaring energy prices have pushed us inflation higher. From the specific data, the rise in energy prices was the main reason for the record high inflation in February. Us energy prices rose 3.5% month on month and 25.6% year-on-year in February. Among them, gasoline prices rose 6.6% month on month and 38% year-on-year; Fuel oil prices rose 7.7% month on month and 43.6% year-on-year. In February, the international oil price rose sharply, and the contract of us oil rose by 8.7% in March; The oil distribution contract rose 9.84% in April. Russia is an important oil exporter in the world. In 2021, Russia’s oil exports accounted for 11.3% of global exports. Local wars will first have some impact on oil collection. After the escalation of the conflict between Russia and Ukraine, Europe, the United States and other countries quickly introduced a series of sanctions against Russia. The prospect of crude oil supply is not optimistic, which pushed the international oil price higher in February. Considering the excessive increase in opec2 production in January, the International Energy Agency is also accelerating the release of crude oil reserves to support crude oil supply, and the oil price may peak in the short term.
The global food supply chain has been impacted, increasing inflationary pressure. In the context of the escalation of the conflict between Russia and Ukraine, food prices continued to rise. In February, food prices in the United States increased by 1% month on month and 7.9% year-on-year, the same increase in a single month since July 1981, which has become an important factor driving the rise of inflation. Russia and Ukraine are major suppliers of Shenzhen Agricultural Products Group Co.Ltd(000061) in Asia, the Middle East and other regions, as well as important grain exporters in the world. According to the latest data, Russia and Ukraine account for 26% of the global wheat exports and 20% of the corn exports. If local conflicts cannot be alleviated in the short term, the prices of relevant commodities may continue to rise.
Inflation has maintained a high upward trend, increasing the pressure on the fed to raise interest rates. At this stage, there is great inflation pressure in the United States. If the Federal Reserve still maintains the goal of controlling inflation to a reasonable range within this year, it may urge the Federal Reserve to accelerate the pace of tightening monetary policy. Last week, Fed chairman Powell said it was appropriate to expect to raise the federal funds rate at the policy meeting later this month. According to the latest data released by the U.S. Department of labor, the number of new non-agricultural employment in February was 678000, far exceeding the expected increase of 423000, the highest monthly increase since last July; In February, the unemployment rate was 3.8%, and the labor participation rate reached 62.3%. On the whole, the US job market is continuing to recover. If the current momentum can be maintained, it may return to the level before the epidemic in the second half of this year. With the steady recovery of the job market, the possibility of the Federal Reserve raising interest rates for the first time in March has exceeded 90%. Judging from Powell’s previous statements, the Fed still tends to raise interest rates by 25 basis points for the first time. However, it should be noted that as US inflation continues to rise, there is still great uncertainty about whether the Fed will adopt a more aggressive monetary policy.
Risk tip: the economic growth is lower than expected, the spread of trade protectionism, and the Fed’s policy is higher than expected.
