Focus this week:
Since November 2021, the Omicron strain has spread rapidly in the world and has become a major threat. The number of newly diagnosed cases in a single day in the world has rebounded to 1.35 million, and the number of newly diagnosed cases in the United States has exceeded 500000. Due to the higher infectivity and rapid spread of Omicron virus strain, the market was once worried about the opening and recovery of the global economy. Although Omicron has slowed down the pace of global opening in a short time, the promotion of vaccines and the approval and listing of specific drugs can effectively prevent medical run, and the global opening can be expected again. First, although Omicron is highly infectious, the number of severe cases and deaths caused by Omicron has not increased significantly; Second, the protective effect of the existing vaccine on Omicron decreased, but the protective effect was significantly enhanced after vaccination with enhancer; Third, covid-19 specific drugs have been authorized by many countries. The mass production scale of Pfizer specific drugs will reach 120 million courses in 2022. The convenience of oral specific drugs can effectively reduce the proportion of severe cases and hospitalization, and further improve the global opening expectation.
We expect that Omicron’s obstacles to global opening will gradually dissipate in the second quarter of 2022. According to the rebound rhythm of previous rounds of epidemic, the peak duration of each round of epidemic is about two months. This round of epidemic entered the peak of rebound in December 2021. Therefore, we judge that the world may reopen in the second quarter of 2022. Under the strategy of “rapid response and dynamic clearing”, Omicron is expected to have limited impact on China. “Dynamic clearing” is the best choice for epidemic prevention and control in China. China’s existing epidemic prevention system is sufficient to deal with the spread of Omicron. If China opens its doors overseas, the epidemic may rebound on a large scale.
Overseas observation:
U.S. 10-year Treasury yields and inflation expectations rose slightly; The interest rate term spread of us 10-year and 2-year treasury bonds fluctuated slightly. The asset scale of the Federal Reserve and the Central Bank of Japan decreased, and the asset scale of the European Central Bank increased.
Overseas policy: the US Congress introduced bills related to cryptocurrency and blockchain policies; Russian President Vladimir Putin held telephone talks with US President Joe Biden; The Biden administration is pushing for stricter antitrust laws, and former Treasury Secretary summers recently pointed out that it would be futile to do so; The regional comprehensive economic partnership agreement (RCEP) entered into force on January 1, 2022.
Global assets:
Most of the global stock markets fell, and the trend of commodity prices was divided. The NASDAQ fell 1.97% and the S & P 500 fell 2.20%. European stock markets generally ended lower, while Asian stock markets were divided. In terms of commodity prices, industrial prices rose and fell. Coking coal, iron ore and gasoline increased by 8.33%, 7.37% and 5.34% respectively. Precious metals mostly fell and Shenzhen Agricultural Products Group Co.Ltd(000061) mostly rose.
Central bank observation: the European Central Bank kept the key interest rate unchanged.
China Watch: upstream: crude oil prices fell month on month, power coal and coking coal prices fell month on month, aluminum prices rose month on month, and copper prices fell month on month. Midstream: the operating rate of blast furnace fell month on month, the cement price index fell month on month, the price of rebar fell month on month, and the inventory decreased year on year. Downstream: the decline of commercial housing transaction area expanded, the growth rate of supply area decreased year-on-year, the prices of pigs and fruits rose month on month, and the prices of vegetables fell month on month. Liquidity: the yield of ten-year Treasury bonds fell.
China’s policy: the national standing committee decided to continue to implement some preferential policies for individual income tax; The national fiscal work conference emphasized the implementation of a positive fiscal policy; The people’s Bank of China implements the continuous conversion of two direct tools.
Next week’s financial calendar: EU manufacturing PMI in December (Monday); China’s foreign exchange reserves in December (Friday)
