I. the PMI of Caixin service industry fell sharply. The PMI of Caixin service industry in March announced on April 6 fell sharply by 8.2 percentage points to 42%, the lowest since March 2020. From the perspective of sub indicators, China's service industry is facing challenges such as weak demand, rising costs, shrinking employment and weakening expectations. On the one hand, the epidemic in China has accelerated, and important economic regions such as Jiangsu, Zhejiang and Shanghai have been affected. Some cities such as Shanghai are still closed; On the other hand, the conflict between Russia and Ukraine has led to a sharp rise in the price of raw materials, which has increased the difficulty of enterprise management. To this end, after the national reform and Reform Commission issued several policies on promoting the recovery and development of difficult industries in the service industry, SASAC, the Ministry of Commerce and other ministries and commissions, as well as Guangdong, Tianjin, Zhejiang, Jiangxi, Shandong and other provinces and cities have also successively launched corresponding measures to alleviate the difficulties of the service industry, especially small and medium-sized enterprises. If the epidemic situation is properly controlled and epidemic prevention measures are gradually relaxed in April, and the situation of the service industry may improve, the policy is expected to help the catering, retail, transportation and other service industries resume business activities as soon as possible, but we need to be vigilant against unstable factors such as repeated epidemics and geographical situation.
2. The national standing committee will once again deploy measures to stabilize growth. Premier Li Keqiang chaired an executive meeting of the State Council on April 6 and decided to implement a phased policy of delaying the payment of old-age insurance premiums for industries in extreme poverty, and strengthen unemployment insurance support for job stabilization and training; Deploy and timely use monetary policy tools to more effectively support the development of the real economy. Under the impact of the epidemic and the conflict between Russia and Ukraine, the triple pressure on China's economic development has increased unabated. The importance of stable growth is more prominent. Monetary policy is expected to be further strengthened in the future, and structural tools are worth looking forward to.
III. The "Eagle" of the Federal Reserve is loud and clear. According to the minutes of the interest rate meeting in March released by the Federal Reserve, at the interest rate meeting in March, a number of Federal Reserve officials believed that if inflation and the economic situation required, interest rates might be increased by 50bp once or more in the future; Federal Reserve officials are expected to begin to shrink the table as early as the May meeting. This shrinking speed is faster than the last shrinking period (20172019). It is planned to reduce the size of assets held by up to $95 billion per month (US $60 billion treasury bonds and US $35 billion mortgage-backed securities), almost twice the highest monthly size at the time of the last shrinking. Judging from the recent statements of Fed officials, officials' views on curbing inflation are becoming stronger and stronger. At present, the market expects the fed to raise interest rates by 250bp this year. Under the background of the continuous recovery of US employment data and rising inflation, it is expected that the Federal Reserve will have a high probability of raising interest rates by 50bp in May and June, and it is very likely to officially start to shrink the table in May. The fast-paced tightening of monetary policy will cause market fluctuations.
IV. The epidemic has impacted demand, and more commodities are cautious. Overseas, on the one hand, the situation in Russia and Ukraine is pending, and the possibility of reaching an agreement in a short time is low. The opening of the fifth round of sanctions by western countries will gradually reduce their energy dependence on Russia, and the supply chain problem remains prominent; On the other hand, the Federal Reserve will significantly tighten monetary policy at a fast pace, which will have an impact on future demand. In fact, the upside down of US bond interest rate indicates that the risk of economic recession is increasing. In China, since March, the epidemic situation in China has continued to escalate. Under the "dynamic zero" epidemic prevention policy, many places have tightened epidemic prevention measures one after another. Downstream demand is facing impact and logistics is facing interruption. However, the steady growth of macro policies has increased unabated, and the demand is expected to recover rapidly after the epidemic situation is controlled. On the whole, internationally priced commodities face a pattern of short strength and long weakness, while Chinese demand dominated commodities face a pattern of short weakness and long strength.
