Ping An View:
First, the Russian Ukrainian front has shrunk, and the overseas virus continues to mutate. In March, the geopolitical conflict between Russia and Ukraine suffered repeated twists and turns, and the war situation between Russia and Ukraine also began to shrink the front to the southeast. At the same time, the continuous variation of overseas virus strains, the latest recombinant variant - Xe, has stronger transmission speed, and the global financial market has also been significantly impacted.
Second, the Fed has a high probability of raising interest rates, and the US bond interest rate is upside down. After the fed first raised interest rates by 25bp in March, the pattern of high inflation has not been significantly improved, which increases the possibility that the Fed will continue to raise interest rates for some time in the future, and even raise interest rates by 50bp at a time from May to June to curb inflation. This round of upward inflation is mainly driven by supply side factors brought about by global supply chain disorder and geographical twists and turns. As an interest rate increase on the demand side and even a table contraction operation to be implemented in the future, it is difficult to suppress supply side driven inflation in the short term. This is why both the Fed's dot matrix and swap rates show that the Fed will continue to raise interest rates 5-6 times this year. Under the background of the tightening monetary policy cycle of the Federal Reserve, the yield of US bonds with different maturities has been significantly inverted.
Third, the "phantom" of interest rate inversion reappears after two and a half years. As we all know, the upside down of US bond interest rate often indicates the "phantom" of economic recession and even economic and financial crisis. At present, the 2y-10y interest rate has begun to hang upside down on April 1, which has to arouse some vigilance. With the upside down of the cost-benefit expectation of assuming debt, the occurrence of debt default and even debt crisis is a high probability event that can be expected. However, this round of interest rate inversion also has its particularity. The high inflation expectation in the next 1-2 years is the main contributor to interest rate inversion. Therefore, there is still great uncertainty whether the current interest rate inversion will inevitably lead to the economic and financial crisis in the next 1-2 years.
Fourth, inflation is difficult to decline in the short term, and the impact on the status of the US dollar is limited in the short term. At present, the core problem facing the global economy is high inflation. However, under the background that the supply side problem is difficult to solve, it is difficult for the central bank such as the Federal Reserve to raise interest rates to cause the rapid decline of inflation. At the same time, while the prices of industrial metals, energy and chemical industry are high, Shenzhen Agricultural Products Group Co.Ltd(000061) there is also a shortage of supply, which may soar in the next 1-2 quarters. In addition, with regard to Russia's request for some countries to conduct oil and gas trade through the ruble and the opposition of western countries, we believe that while the ruble will be boosted in the short term, we should pay more attention to the medium and long-term impact. Considering the deep-rooted hegemony of the US dollar in the world, the status of the US dollar is still difficult to be significantly impacted in a few years, but its weight in some trade in some regions may decline.
Fifth, focus on commodities and undervaluation of equity in April. Under the background that the tightening cycle of the Federal Reserve is expected to speed up and inflation remains high, stocks are better than bonds in the allocation of major assets, industrial metals and energy chemicals that benefit more from inflation are more dominant in commodities, and Shenzhen Agricultural Products Group Co.Ltd(000061) is also expected to usher in an upward trend. We should pay attention to the opportunities of the precious metal market and the bond market, but we should pay attention to the decline of the non-ferrous metal market.
Risk tips: 1) covid-19 epidemic situation increases the impact; 2) The geopolitical situation is heating up rapidly; 3) The macroeconomic decline exceeded expectations; 4) Overseas market volatility intensified.
