Key investment points:
The manufacturing boom continued to improve in December
Manufacturing PMI rebounded for two consecutive months. In December 2021, the official manufacturing PMI was 50.3%, down 0.2 percentage points from the previous value. After falling below the boom and bust line in October, it was above the boom and bust line for two consecutive months, and the prosperity of the manufacturing industry continued to rise.
Production returned to normal. In December, the production index fell by 0.6 percentage points to 51.4% compared with the previous month, lower than the average value of 52.75% in the same period from 2015 to 2019, but it was the second highest in the second half of 2022, only lower than 52.0% in the previous month, reflecting that the impact of power and production restriction on production continued to weaken.
Demand is mainly driven by domestic demand. In December, the new order index increased by 0.3 percentage points to 49.7% compared with the previous month. Although it is still lower than the boom and bust line, it has rebounded for two consecutive months. Structurally, the new export order index fell 0.4 percentage points to 48.1%.
The price index continued to fall significantly. The purchase price index and ex factory price index of main raw materials fell back to 48.1% and 45.5% for two consecutive months, and the effect of measures to ensure supply and stabilize prices has been shown. The obvious drop in raw material prices also led to a significant increase in the willingness of enterprises to prepare goods, and the raw material inventory and finished product inventory index rose to a high level in the year.
Non manufacturing PMI fell slightly. December non manufacturing pmi52 7%, down 0.6 percentage points from the previous value. Although it has decreased, it is relatively stable as a whole.
On the whole, the recovery of PMI in the manufacturing industry in recent two months is obviously related to the improvement of power and production restriction, and the overall market expectation is gradually improving. It can be verified from the increase of goods preparation by enterprises. Demand has picked up, but it is still in the contraction range. In the first quarter of next year, the loose monetary policy is combined with the active fiscal policy, the policy force is appropriately advanced, and the recovery of the manufacturing industry may be continued to a certain extent.
The central bank issued the macro Prudential policy guidelines (for Trial Implementation)
On December 31, the central bank issued the macro Prudential policy guidelines (for Trial Implementation). Based on China’s reality, the guidelines clarify the elements of establishing and improving China’s macro Prudential policy framework. It mainly includes: first, it defines the relevant concepts of macro Prudential policy, including macro Prudential policy framework, systemic financial risk, macro Prudential management mechanism, etc; Second, it expounds the main contents of the macro Prudential policy framework, including macro Prudential policy objectives, systematic financial risk assessment, macro Prudential policy tools, transmission mechanism and governance mechanism; Third, it puts forward the requirements for support and policy coordination required for the implementation of macro prudential policies.
Macro Prudential policy tools are mainly used to prevent the overall risks of the financial system. They have the basic attributes of “macro, counter cyclical and anti contagion”. Macro Prudential management often has the characteristics of “time-varying”, that is, they are dynamically adjusted according to the systemic financial risk status to play the role of counter cyclical adjustment.
RECP comes into force
On January 1, 2022, the regional comprehensive economic partnership agreement (RCEP) came into force and the world’s largest free trade area officially set sail. RCEP has 15 member countries, including China, Japan, South Korea, Australia, New Zealand and 10 ASEAN countries. In terms of population, economic volume and total trade, they all account for about 30% of the global total.
After RCEP comes into force, more than 90% of the goods trade between approved Member States will finally achieve zero tariff. On the day of entry into force of the agreement, the proportion of immediate zero tariff between China and ASEAN, Australia and New Zealand will exceed 65%. China and Japan are newly established free trade relations, and the proportion of mutual immediate zero tariff will reach 25% and 57% respectively. Not just tariff cuts. RCEP has also formed unified rules on rules of origin, customs procedures, inspection and quarantine, and the degree of intra regional trade facilitation will be further improved. In addition to trade in goods, RCEP member states have also made high-level opening commitments in service trade and investment, and established high-level rules such as intellectual property rights and e-commerce. The flow of various economic factors will be smoother, and the industrial chain, supply chain and value chain in the region will be further consolidated and developed.
The entry into force of RCEP can bring real performance growth to Chinese import and export enterprises, and will also form a certain support for the pressure of falling export growth in 2022.
The financing balance increased. On December 30, the balance of A-share financing was 1721.327 billion yuan, an increase of 189 million yuan month on month; The balance of margin trading was 1840.73 billion yuan, an increase of 3.256 billion yuan month on month. The balance of financing minus securities lending was 1601.924 billion yuan, a month on month decrease of 2.878 billion yuan.
Net inflow of land stocks and closure of Hong Kong stocks. On December 31, the net purchase turnover of land stock connect on that day was 4.573 billion yuan, including 46.311 billion yuan of purchase turnover and 41.738 billion yuan of sales turnover, with a cumulative net purchase turnover of 163.4578 billion yuan.
Money market interest rates fluctuated. On December 31, Bank Of Shanghai Co.Ltd(601229) inter-bank offered rate Shibor overnight interest rate was 2.1290%, up 85.30bp, Shibor one week was 2.2710%, down 5.00bp. The weighted interest rate of pledged repo of deposit institutions was 2.0324% overnight, up 76.50bp and 2.2916% a week, down 18.23bp. The 10-year yield to maturity of China national debt was 2.7754%, up 1.00bp.
European and American stock markets rose. On January 3, the Dow Jones Industrial Average closed at 36585.06 points, up 0.68%; The S & P 500 index closed at 4796.56 points, up 0.64%; The NASDAQ index closed at 15832.80, up 1.20%. European stock markets, French CAC index closed at 7217.22 points, up 0.90%; Germany’s DAX index closed at 16020.73, up 0.86%. In the Asia Pacific market, the Hang Seng Index closed at 23274.75, down 0.53%.
The dollar index rose. On January 3, the dollar index rose 0.26% to 96.2181. The euro fell 0.64% against the dollar to 1.1296. The dollar rose 0.19% against the yen to 115.3250. Sterling fell 0.38% against the dollar to 1.3478. The spot exchange rate of offshore RMB against the US dollar closed at 6.3750, depreciating by 0.17%.
Gold fell, crude oil rose and copper fell. On January 3, Comex gold futures fell 1.60% to close at US $1801.30 / ounce. WTI crude oil futures rose 0.72% to close at US $75.99/barrel. Brent crude oil futures rose 1.24% to close at US $78.91/barrel. COMEX copper futures fell 0.84% to close at US $4.4225/lb.
