Core view
Covid-19 virus has a new Xe variant produced by the recombination of Omicron strain. The study found that the growth rate of Xe is faster than that of Ba 2 strain was also 9.8% higher. Overseas inflationary pressure continued to increase. US inflation continued to reach a record high, and the personal consumption expenditure (PCE) price index rose month on month in February. At the same time, the rise in energy prices pushed up the year-on-year increase in CPI in the eurozone.
From the entity high-frequency data, the decline in real estate sales expanded in March, and the growth rate of passenger car wholesale and retail sales turned negative, while the decline in steel production was still large, pointing to the weakness of China's economic supply and demand. Since March, the prices of vegetables and fruits on the demand side have risen, but the price of pork has fallen; The oil price, steel price and coal price at the production end all rose, and the price differentiation confirmed the weakness of supply and demand. In terms of liquidity, last week, the short-term interest rate was divided, the long-term interest rate was down, dr001 and dr007 were down and up, and the 1y and 10Y treasury bond interest rates were down. Last week, the central bank put a net investment of 430 billion yuan in the open market and issued 83.2 billion new special bonds. In terms of policy, the national standing committee meeting last week stressed that "we will not relax our commitment to the annual development goals" and "we will put steady growth in a more prominent position". Next week, we will focus on the release of financial data in March and the minutes of the Federal Reserve's interest rate meeting.
One week scan:
Epidemic tracking: new variants of covid-19 virus appear, and the transmission speed may be accelerated. UK health and Safety Authority (ukhsa) recently confirmed that Omicron ba 1 and Omicron ba The infection cases caused by the new variant Xe produced by recombination have increased rapidly. As of March 22, 637 cases of Xe infection have been confirmed in the UK. The research shows that the new variant spreads faster than ba 2 strain was also 9.8% higher.
Overseas economy: inflation in the United States and Europe continues to reach a new high, and Europe is facing another energy crisis. The PCE price index of the United States in February increased by 6.4% year-on-year, the largest increase since 1982; The core PCE price index increased by 5.4% year-on-year, higher than the previous value of 5.2%. In March, the adjusted CPI of the eurozone increased by 7.5% year-on-year and 2.5% month on month, and the upward pressure on inflation surged. From April 1, Russia's supply of natural gas to European countries will be settled in rubles, and Europe faces the risk of interruption of natural gas supply.
China's economy: the real economy is weak in supply and demand. In the whole month of March, the year-on-year decline of commercial housing transaction area in 30 cities expanded to 47.3%; In the first 27 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 continued to drop in the latest week, and the decline in steel output of sample steel mills expanded.
China's prices: prices are divided. Since March, vegetable prices have increased by 2.3% compared with the average of the previous month, and meat prices, fruit prices, vegetable baskets and Shenzhen Agricultural Products Group Co.Ltd(000061) wholesale price indexes have decreased by 9.2%, 2.6%, 0.6% and 0.3% respectively compared with the average of the previous month. The prices of Brent oil, WTI oil, hot-rolled sector steel and rebar increased by 19.5%, 18.1%, 3% and 0.6% respectively compared with the average value of the previous month, and the power coal decreased by 4.9% compared with the average value of the previous month.
China's liquidity: monetary policy remains neutral. Short end interest rate differentiation. The average value of drbp dropped to 241001%, and the latest weekly average value of drbp dropped to 24338001%, respectively; The average values of R007 and dr007 rose 32BP and 1bp to 2.66% and 2.1% respectively month on month. The central bank invested a net 430 billion yuan in the open market. The RMB appreciated against the US dollar, and the weekly average value of the US dollar index fell back to 98.47. The weekly average value of the US bond interest margin in 10Y narrowed by 5.1bp 1y treasury bonds and 10Y treasury bonds fell 6.3bp and 2.6bp to 2.1% and 2.77% month on month, respectively. Last week, 103.4 billion local government bonds were issued, including 83.2 billion new special bonds.
Highlights of China: stick to the development goal and don't relax. China EU leaders held a video meeting to study China EU economic and trade exchanges and Ukraine.
The Standing Committee of the Political Bureau called for a special inspection of production safety. The national Standing Committee stressed that "we should set the annual development goals and not relax". The regular meeting of the central bank's goods policy committee was held.
Risk tips
1. The steady growth is less than expected;
2. Geopolitical conflict intensifies.
