Ping An View:
Real economy: the epidemic situation in Shaanxi improved this week, but the epidemic situation in Henan resumed, the operating rate was at a low level, the rebar inventory bottomed out, the real estate market cooled down again, and the price of black commodity futures rose across the board. 1) From Monday to Friday (January 3 to January 7, 2022), a total of 492 new cases were diagnosed in Shaanxi, Henan, Zhejiang and Guangdong, which was better than 831 new cases in seven provinces and autonomous regions in the same period last week. Regionally, the epidemic situation in Shaanxi Province may have entered a period of decline, but the epidemic situation in Henan Province spread again this week. 2) The industrial operating rate is low. According to the high-frequency production indicators that we regularly track, the operating rates of automobile tires, semi steel tires and petroleum asphalt units have been announced. The former decreased month on month, while the latter increased slightly month on month, but it is still at a historical low. 3) Inventory trend differentiation. Among the finished products, the rebar factory warehouse + social warehouse increased by 1.9% month on month, and the electrolytic aluminum inventory decreased by 2.7% month on month. In the raw material inventory, the port iron ore inventory decreased by 0.1% month on month, and the coking coal inventory of independent coking plant was available for 17.0 days, with a month on month increase of 0.6 days. 4) The land market will cool down again. Last week, the land supply area and transaction area of Baicheng decreased significantly month on month. However, the transaction land premium rate reached a new high in nearly three months, which may indicate that the cooling of the land market may be affected by the new year’s Day holiday and the end of the third centralized land supply in 2021. This week, China’s export container freight rate index hit a record high, and the freight rates of major routes rose month on month. After the proliferation of Omicron, many governments have strengthened control, which will prolong the resilience time of China’s exports. 5) Black commodity futures prices rose across the board. This week, the settlement prices of active contract futures of coke, thermal coal, rebar, iron ore and coking coal increased by 7.7%, 6.1%, 4.9%, 3.6% and 2.2% respectively month on month. In addition to Indonesia’s restrictions on coal export, it is also related to the expectation of stable growth of China’s infrastructure. We believe that the leniency finance has gradually shifted from the expenditure side to the income side. In the follow-up, we need to pay attention to the risk that the rebound of infrastructure investment is less than expected. This week, the Shenzhen Agricultural Products Group Co.Ltd(000061) wholesale price 200 index rose 0.7% month on month, of which the wholesale price of pork fell 1.5% month on month and the wholesale price of fruit rose 1.6% month on month.
Capital market: after the holiday this week, the capital surface was significantly relaxed, most of the main stock indexes fell, the term interest margin of 10y-1y Chinese government bonds widened, and the US dollar and RMB depreciated. In the money market, R007 and dr007 closed at 2.13% and 2.05% respectively on Friday, down 41.67bp and 24.33bp respectively compared with last Friday. In the stock market, the main A-share indexes fell across the board this week, and the overvalued new energy and other sectors fell significantly, which may be related to the position adjustment of institutional investors in the new year. Construction machinery, infrastructure and other sectors rose against the trend. We believe that the rebound of infrastructure investment in 2022 should not be overestimated. In the bond market, the expectation of steady growth was superimposed on the expectation of the Federal Reserve to shrink the table, the yield of US bonds rebounded, and the yield of Chinese treasury bonds rebounded except for the one-year term. We believe that the current demand for physical financing is not strong, there is a time lag from broad money to credit stabilization, and there is little pressure on the short-term rebound of China’s treasury bond yield. In the foreign exchange market, the US dollar index closed at 95.74 on Friday, down 0.24% from last Friday. This week, the onshore and offshore RMB depreciated by 0.01% and 0.24% against the US dollar respectively. Using the new weight of CFETS RMB exchange rate index in 2022, it is estimated that the RMB exchange rate index on January 7, 2022 is 100.38, with a depreciation of 2.41% compared with last week (if the old weight in 2021 is used, it is 102.93, with an appreciation of 0.07%).
Risk tip: steady growth is less than expected, the epidemic situation in China is spreading at multiple points, and geopolitical conflicts are escalating.
