Key investment points
I. CPI was 1.5% year-on-year in the same month, CPI was flat month on month, Spring Festival demand fell and the impact of the epidemic was superimposed, food and service prices fell, and behind the rise in the price of industrial consumer goods was the rise in the price of bulk commodities and the boost of infrastructure construction. CPI was 0.6% month on month, unchanged from the previous month. Among them, the price of food decreased by 1.2%, which was mainly affected by the decline of consumer demand and sufficient supply after the festival, and the price of pork decreased by 9.3%; Non food prices rose by 0.3%, down 0.1 percentage points from the previous month; The price of industrial consumer goods rose by 1.1% and 0.3 percentage points, mainly driven by the rise in energy prices; Service prices fell by 0.2% from flat last month. CPI for the month was 1.5% year-on-year, up 0.6 percentage points from the previous month. Among them, food prices decreased by 1.5%, 2.4 percentage points lower than that of the previous month, and the impact of food prices on CPI decreased by about 0.28 percentage points. The main changes in food items came from the year-on-year decrease of 41.4% in pork prices and 17.2% in fresh vegetables prices. Non food prices rose by 2.2%, up 0.1 percentage points from the previous month, affecting the CPI rise by about 1.77 percentage points. The main change of non food items came from the rise of energy prices. The prices of gasoline, diesel and LPG increased by 24.6%, 26.9% and 27.1% respectively; The price of industrial consumer goods excluding energy rose by 0.7%; In addition, service prices rose by 1.1%, down 0.1 percentage points from the previous month.
II. PPI fell by 8.3% year-on-year and 1.1% month on month, and the impact of commodity prices began to appear. In March, due to the rise of international commodity prices, geopolitics and other factors, PPI rose month on month and continued to fall year-on-year. PPI rose 1.1% month on month, up 0.6 percentage points from the previous month. Among them, the price of means of production increased by 1.4% and 0.7 percentage points; The price of means of subsistence increased by 0.2%, and the increase was expanded by 0.1 percentage points. International commodity prices continued to rise due to political and other factors, driving the prices of Petrochina Company Limited(601857) , nonferrous metals and other related industries to continue to rise. Among them, the price of oil and natural gas exploitation industry increased by 14.1%, the price of petroleum, coal and other fuel processing industry increased by 7.9%, the price of chemical fiber manufacturing industry increased by 2.0%, and the price of chemical raw materials and chemical products manufacturing industry increased by 1.8%; The price of non-ferrous metal smelting and rolling processing industry increased by 2.7%. In total, the above industries affected the rise of PPI by about 0.77 percentage points, accounting for 70% of the total increase.
PPI in the current month was 8.3% year-on-year, down 0.5 percentage points from the previous month, of which the price of means of production was 10.7%, down 0.7 percentage points; The price of means of subsistence was 0.9%, unchanged from the previous month. Among the 40 categories of industrial industries surveyed, 37 have experienced price increases, among which the industries with expanded increases are coal mining and washing, oil and natural gas mining, oil, coal and other fuel processing, power and heat production and supply.
Overall, the narrower increase in PPI and the year-on-year increase in CPI are mainly reflected in the production of raw materials and manufacturing industry in the middle and upper reaches. Among them, the rise in the price of industrial raw materials is mainly affected by overseas imported inflation, and the accelerated commencement of investment projects since the first quarter has also boosted industrial manufacturing and ferrous metal processing industry. The main reasons for the year-on-year rise of CPI are: (1) cost promotion. Under the control of the epidemic situation, it is difficult for consumer enterprises to operate normally, maintain the stability of supply and inventory, and are forced to increase operating costs; (2) Overseas input. The cost transfer caused by the price rise of upstream raw materials has increased. Due to weak consumption and intermittent epidemic prevention and control, the time lag of this transmission chain has been prolonged, but it has not disappeared.
Investment strategy: the trend of interest rate is still dominated by the expectation of stable economic growth policy. If the recent economic and financial data are lower than expected, the interest rate is expected to bottom out; If it is better than the market expectation, the interest rate will rise slightly and re form the expectation of directional easing of monetary policy after adjustment.
Risk tips: fundamental data exceeded expectations, monetary policy exceeded expectations, etc
