Event:
1) in the first quarter, China's GDP was 27.0 trillion yuan, with an actual growth rate of 4.8%, and the actual economic growth rate in 2021q4 was 4%; 2) In March, the added value of industries above designated size increased by 5.0% year-on-year, compared with the previous value of 7.5%; 3) From January to March, the investment in fixed assets increased by 9.3% year-on-year, and the former value was 12.2%; 4) In March, the total retail sales of social consumer goods decreased by 3.5% year-on-year, compared with the previous value of 6.7%.
Comments:
The economic growth rate is generally in line with market expectations, and the overall fundamentals are still in the recovery channel, but the impact of the epidemic has hindered the recovery process. The actual economic growth rate in the first quarter was 4.8%. Although the fundamentals are impacted by the epidemic, the fundamentals have generally crossed the trough in the fourth quarter of 2021. At present, the overall recovery process is still in progress and has not deviated completely. In March, the structure of fundamentals continued the trend of the fourth quarter of last year, and continued to show the situation of continuous improvement of supply constraints, imbalance of internal and external demand, and improvement of inflation environment.
Production has weakened, but there is still a certain degree of improvement compared with the fourth quarter of last year, and the year-on-year growth rate of manufacturing production has decreased significantly. In March 2022, the added value of industries above designated size increased by 5% year-on-year (the previous value was 7.5%); The month on month growth rate in March was 0.39% (the previous value was 0.51%). Although the year-on-year growth rate of added value of industries above Designated Size in March decreased by 2.5 percentage points compared with that from January to February, it was improved as a whole compared with the fourth quarter of last year. The year-on-year growth rate of the added value of industries above Designated Size in the first quarter was 6.5%, 1.7 percentage points higher than the year-on-year growth rate of the actual economy, and higher than the same period level in 20152019 before the epidemic, indicating that the impact on small enterprises is more obvious at present.
The investment is still in the repair stage, but it weakened after the impact of the epidemic in March; Real estate investment improved to a certain extent, but fluctuated significantly. Manufacturing investment was greatly impacted by the epidemic in March, and the growth rate of infrastructure investment continued to rise, but it still needs to be observed. The year-on-year growth rate of fixed asset investment in March was 6.6% (12.2% from January to February this year), with a month on month growth of 0.61%, lower than 0.71% in February, but higher than that in December 2021 and January to February this year, indicating that the current investment is still in the repair stage, but weakened after the impact of the epidemic in March.
Consumption decreased significantly. Except that the required consumption continued to maintain a high level, the optional consumption and service consumption decreased significantly. In March, the growth rate of social consumption decreased by 3.5% year-on-year, 10.2 percentage points lower than the previous value. In addition, the month on month growth rate of social consumption in March was - 1.9%, the lowest since August 2021. From the perspective of consumer goods category, except that the required consumption continues to maintain a high level, the optional consumption and service consumption have decreased significantly.
Bond market view
Since April, the overall yield of 10Y treasury bonds has fluctuated at about 2.75%, but the decline of interest rate in the capital market has pushed the yield of 1y treasury bonds down, and the interest rate spread between the yield periods of 10Y and 1y treasury bonds has widened. 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.
