Key points
Events
On April 11, 2022, the National Bureau of statistics released the CPI and PPI data for March 2022: in March 2022, the CPI increased by 1.5% (the former value was 0.9%) year on year, and the core CPI increased by 1.1% (the former value was 1.1%) year on year; PPI increased by 8.3% year-on-year (the previous value was 8.8%).
Comments
The overall CPI is still relatively low, and the core CPI is currently relatively stable. In March, CPI rose by 1.5% year-on-year (the previous value was 0.9%); The month on month ratio was 0 (the previous value increased by 0.6%). The year-on-year growth rate of CPI increased while the month on month growth rate decreased, which is mainly due to the differentiation of various sub items. The decline in the month on month growth rate of CPI in March has a certain seasonality, and the performance of core CPI is relatively stable at present. At present, the impact of the supply side on CPI is in a state of ebb and flow, and the main factor determining the height of CPI is the demand side. The repair of residents' balance sheet is not smooth, which will restrict the repair speed of residents' consumption and make it difficult for consumer goods prices to perform well. PPI performance is still strong, and it is expected that it will be difficult to fall back quickly in the follow-up. In March, PPI increased by 8.3% year-on-year (the previous value was 8.8%), and the increase fell for five consecutive months; Up 1.1% month on month (up 0.5% from the previous value), up for two consecutive months. Combined with the downturn in consumer goods, the current price environment is not optimistic. In March, the month on month growth rates of the prices of means of production and means of living were 1.4% and 0.2% respectively (the previous values were 0.7% and 0.1% respectively), and the month on month growth rates increased. Looking ahead to the follow-up, the short-term trend of the Russia Ukraine incident is not clear, the international crude oil price remains high, the price trend of relevant raw materials is still uncertain, the rapid decline of PPI growth rate in the short term is difficult, and the unsatisfactory price environment in China will continue for some time.
Bond market view
At present, the epidemic situation in China has been repeated, but the annual economic work goal has been clear in the government work report. The follow-up depends more on the strength of policies and the trend of fundamentals. In terms of macro policy, from the recent financial activities, the financial policy is on the way to strength, and there is still room for further strengthening in the follow-up. In terms of monetary policy, at the meeting of the Standing Committee of the State Council on April 6, it was proposed to "deploy the timely use of monetary policy tools to more effectively support the development of the real economy"; The first quarter regular meeting of the central bank's monetary policy committee in 2022 also proposed to "strengthen cross cyclical and counter cyclical regulation and strengthen the implementation of prudent monetary policy". The subsequent monetary policy will be a combination of aggregate policy and structural policy, with room for operation.
For the bond market, there are many external interference factors, such as the rapid rise in US bond yields caused by the Fed's interest rate hike and the Russia Ukraine incident. However, from the trend of the bond market in recent months, the main contradiction affecting China's bond market is still in China. We have always stressed that the biggest feature of fundamentals in 2022 may be "demand for re repair". With the combination of moderate easing of policies and the restoration of fundamentals, it may be difficult for the bond market to have large trading opportunities, and it is also necessary to exit at the right time. For configuration institutions, they can be configured in time in the future. When the yield of 10Y treasury bond is 2.9%, it has strong configuration value.
Risk tips
The recent epidemic situation has been repeated, and the uncertain factors of the follow-up global economic recovery still exist; China's economy is still in the process of recovery, and the derivative risks brought by the epidemic can not be ignored.
