Core view
Affected by the previous lifting of covid-19 epidemic prevention restrictions in Britain, France and Germany, the number of new cases in many European countries rose for three consecutive weeks last week. Last week, the United States announced the largest month on month decline in durable goods orders in February. From the perspective of Markit manufacturing and service PMI in March, the United States both rebounded, while the euro zone both fell.
Since March, the growth rate of steel production and wholesale sales has been relatively weak, while the growth rate of passenger car production and wholesale sales has remained negative. Since March, prices have been differentiated. The average price of vegetables on the demand side has increased month on month, but the price of meat and fruit has decreased month on month; The oil price and steel price at the production end increased significantly, and the coal price fell slightly. Last week, the short-term interest rate split and the long-term interest rate fluctuated upward, the average values of dr001 and dr007 fell and rose, and the interest rates of 1y and 10Y treasury bonds both rose. Last week, the central bank put a net investment of 50 billion yuan in the open market and issued 120.7 billion yuan of new special bonds. The State Council issued the opinions on the division of key work of the government work report, and the national development and Reform Commission and the Energy Administration jointly issued the 14th five year plan for modern energy system.
One week scan
Epidemic tracking: the epidemic in Europe rebounded again. On March 18, the British government completely lifted the entry restrictions against covid-19 epidemic. France, Germany, the Netherlands, Italy, Spain and other European countries also announced to lift the epidemic prevention restrictions of covid-19 epidemic this month, resulting in variant virus ba 2 once again ravaged Europe, and the average number of new cases per day in many European countries increased for three consecutive weeks.
Overseas economy: orders for durable goods in the United States fell sharply, and PMI in the United States and Europe were better than expected. The initial value of durable goods orders in the United States in February recorded - 2.2% month on month, lower than the - 0.6% expected by the market, the largest monthly decline since April 2020. In March, the initial PMI of Markit manufacturing industry and service industry in the United States recorded 58.5 and 58.9 respectively Eurozone PMI fell in March, but better than expected.
China's economy: demand remains weak and production turns weak. In the first 24 days of March, the year-on-year decline of commercial housing transaction area in 30 cities expanded to 47%; In the first 20 days of March, the year-on-year growth rate of passenger car wholesale and retail sales of the passenger Federation changed from positive to negative. The blast furnace operating rate fell in the latest week, and the steel output of the sample steel plant fell sharply.
Chinese prices: prices are divided. Since March, vegetable prices have increased by 1.6% compared with the average value of the previous month. Fruit prices, meat prices, Shenzhen Agricultural Products Group Co.Ltd(000061) and wholesale price indexes of vegetable baskets have decreased by 3.3%, 9.1%, 0.7% and 1% respectively compared with the average value of the previous month. The prices of Brent oil, WTI oil, screw thread steel and hot rolled sector steel increased by 19.8%, 18.9%, 0.2% and 2.7% respectively compared with the average value of the previous month, and the power coal decreased by 0.9% compared with the average value of the previous month.
China's liquidity: monetary policy remains neutral. Short end interest rate differentiation. In the latest week, the average values of R001 and dr001 decreased by 3bp and 4bp to 2.04% and 1.99% month on month respectively; The average values of R007 and dr007 rose 10bp and fell 1bp to 2.34% and 2.09% respectively month on month. The central bank invested a net 50 billion yuan in the open market. The RMB depreciated against the US dollar, and the weekly average value of the US dollar index rebounded to 98.64. The weekly average value of the US bond interest margin in 10Y narrowed by 15.3bp 1y treasury bonds and 10Y treasury bonds rose 5.3bp and 0.5bp to 2.16% and 2.8% respectively month on month. 176 billion yuan of treasury bonds and 173.1 billion yuan of local government bonds were issued, including 120.7 billion new special bonds.
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Risk tips
1. The policy strength is less than expected;
2. Geopolitical conflict intensifies.
