Overseas epidemic prevention continued to relax, and South Korea also followed up to "lie flat"; The epidemic situation in China is still serious and the drag on production is intensified; The standard reduction fell to the ground, but the range was lower than expected; High frequency data show that real estate has not improved. How will the follow-up economy and policies go? In view of the above problems, we track the high-frequency data and major policies every half month: 1) epidemic situation, vaccine and resumption of work outside China; 2) China's economy (high frequency); 3) Important meetings and policies. This period is the data tracking since nearly half a month (2022.4.6-4.17).
I. epidemic vaccine: China's epidemic continues to increase at a high rate and unswervingly implements the "dynamic clearing"; Overseas prevention and control was further relaxed
\u3000\u30001. Epidemic situation: the number of new overseas diagnoses continued to fall, and the epidemic situation in Europe improved. In the past half month, the global daily average increased by 975000 cases, with a previous value of about 1509000 cases, of which the daily average in Europe (Britain, France, Germany, Italy and West) decreased to 368000 cases, with a previous value of 512000 cases. China's daily increase continued to rise, with an average daily increase of 1749 cases in the past half month, about 1677 cases in the previous value, 235000 cases of asymptomatic infection and 96000 cases in the previous value.
\u3000\u30002. Vaccines: a total of 11.45 billion doses of vaccines have been vaccinated worldwide, with 65.0% of people vaccinated at least once; China has inoculated 3.31 billion doses in total; The average daily vaccination in the past half month fell back to 2.652 million doses, with the previous value of about 3.957 million doses.
\u3000\u30003. Epidemic prevention measures: all epidemic prevention measures have been basically abolished in Europe; The United States plans to open its doors to the outside world and significantly reduce the list of recommended "no travel" international destination place names to 10% of the existing number; South Korea followed up with the cancellation of epidemic prevention, and the confirmed personnel were no longer isolated in late May.
II. Global resumption of work: traffic in Europe and the United States continued to divide, personnel activities increased steadily, and unemployment in the United States deteriorated slightly
\u3000\u30001. Transportation: the number of global flights fell back to about 85% before the epidemic; European and American congestion index continued to differentiate.
\u3000\u30002. Personnel activities: personnel activities in the United States have improved slightly in the last half of the month, while those in Europe are basically the same; Asia, Japan, South Korea, India and other countries recovered as a whole.
\u3000\u30003. US economy: the Wei index continued to fluctuate downward, indicating that the US economy continued to slow down; Unemployment picked up slightly.
III. Liquidity: the overall liquidity is abundant, and the issuance of special bonds slows down; The interest rate spread between China and the United States is upside down again after 12 years
\u3000\u30001. Money market: in the past half month, the central bank has recovered 550 billion yuan of money through Omo, which is in line with the law of central bank liquidity release at the end of the month and recovery at the beginning of the month; The average interest rate in the money market dropped significantly, and the average spread between R007 and dr007 narrowed by 10.6bp month on month, indicating that there is sufficient liquidity as a whole; The maturity yield of three-month AAA + and AA + interbank certificates of deposit decreased by 10.6bp month on month.
\u3000\u30002. Bond market: the issuance of interest rate bonds in the past half month was 560.3 billion yuan, 131.2 billion yuan less than the previous month. Among them, 19.3 billion yuan of local special bonds were issued, 184.6 billion yuan less than the previous month; Since the beginning of the year, a total of 1.32 trillion yuan has been issued, accounting for 36.1% of the annual quota. The average yield to maturity of 10Y and 1y treasury bonds decreased by 4.0bp and 8.0bp to 2.762% and 2.045% month on month respectively, and the term spread expanded by about 4.0bp.
\u3000\u30003. Exchange rate and overseas markets: as of April 14, the US dollar index closed at 100.52, up 1.3% month on month in the past half. Among them, the US dollar against the RMB is about 6.39, corresponding to the RMB devaluation of 0.1% month on month; In the past half month, the average yield of 10Y US bonds was about 2.83%, up 28.6bp month on month, and the interest rate difference between China and the United States narrowed by 38.2bp to about -7.0bp, the first upside down of interest rate difference between China and the United States since 2010.
IV. China's economy: price differentiation, slowing production, weak real estate sales and land acquisition, and the epidemic is the biggest disturbance
\u3000\u30001. Upstream: the prices of upstream resource products are divided, and the prices of crude oil, coal and other energy fall. Brent crude oil closed at US $111.7/barrel, down 8.2% month on month in the past half, but it has rebounded recently, and the conflict between Russia and Ukraine is still the main disturbance; The price of power coal fell 18.1% month on month, mainly due to the decline in demand caused by off-season demand and epidemic disturbance; Iron ore prices continued to rise by 7.0% month on month, mainly due to the increase in downstream demand; Copper prices continued to fluctuate upward, rising by 0.8% month on month in the last half of the month. High overseas inflation and the strength of China's steady growth policy are the macro support.
\u3000\u30002. Midstream: most of the construction of key industrial products fell. In the past half month, the blast furnace operation rate and PTA operation rate of Tangshan steel plant decreased by 1.2 and 1.1 percentage points month on month to 52.4% and 68.3% respectively; The operating rate of coking enterprises rose by 1.0 percentage points to 72.4%. Coal consumption for power generation in the eight coastal provinces continued to decline. In the past half month, the average daily coal consumption of power generation in eight coastal provinces was 1.646 million tons, down 6.7% month on month, mainly due to the repeated drag on power demand caused by the epidemic. Prices of key industrial products weakened. In the past half month, the price of rebar rose by 0.8% month on month, which was significantly narrower than the previous value; Cement prices changed from up to down, down 0.4% month on month. Both BDI and CCFI indexes fell. In the past half month, BDI and CCFI indexes fell by 14.7% and 3.6% respectively month on month, pointing to that China's exports may continue to fall in April.
\u3000\u30003. Downstream: commercial housing sales continued to decline, and the enthusiasm of real estate enterprises to acquire land is still weak. The transaction area of commercial housing in 30 cities decreased by 2.5% month on month, about 50% compared with the same period last year; The land transaction area of 100 cities continued to decline by 7.0% month on month, down about 40% compared with the same period last year. Second hand house prices continued to fall by 0.5% month on month, and the land premium rate fell by 3.1 percentage points month on month. Automobile production fell and sales continued to decline. In the past half month, the operating rate of semi steel tire decreased by 5.6 percentage points to 68.4%, which may be related to the suspension of some auto enterprises in Shanghai and other places caused by the epidemic. According to the passenger Federation,
The average daily sales of passenger cars in the first week of April was 25000, lower than the average of 39000 in March and the previous value of 30000. Food prices mostly fell. Pork prices fell another 0.5% month on month in the past half month; Vegetable prices fell 6.1% month on month and fruit prices rose 5.3% month on month.
V. China's major policies: stabilizing employment and prices are the key points, reducing reserve requirements is very restrained, real estate continues to relax, and pay attention to the unified big market
\u3000\u30001. Important meeting: the CPC Central Committee and the State Council: accelerating the construction of a national unified market (4.10); National Standing Committee: comprehensively implement policies to release consumption potential, with special poverty-stricken industries, bulk consumption and key projects as the focus (4.13); To keep the economy operating within a reasonable range, the main thing is to achieve basic stability in employment and prices; Use a variety of monetary policy tools to increase support for the real economy (4.6).
\u3000\u30002. Monetary and fiscal policies: the central bank: cut the deposit reserve ratio of financial institutions by 0.25 percentage points (4.8); Clarify the newly established two special refinancing lines and support scope (4.14); Ministry of Finance: strengthen counter cyclical policies and firmly hold the bottom of macro economy (4.14).
\u3000\u30003. Industry and industrial policy: prevent disorderly expansion of capital; Many places continue to relax real estate purchase, sale and loan restrictions
> Financial Supervision: the CPC Central Committee and the State Council: adhere to financial services for the real economy, prevent from disenchantment to falsehood, set up "traffic lights" for capital and prevent disorderly expansion of capital (4.11); CSRC: steadily expand the scope of Shanghai Shenzhen Hong Kong Standard (4.9).
> industrial policy: National Development and Reform Commission: actively expand effective investment and help steady growth (4.15); Ministry of water resources, etc.: in 2022, China will complete the investment in water conservancy construction of about 800 billion yuan (4.8); Suzhou, Linyi, etc.: continue to relax the purchase, sale and loan restrictions of real estate (4.15).
Vi. Policy Outlook: the end of the policy has come and the end of the economy has not come. In addition to easing the currency, we need to control the epidemic, loosen real estate and expand infrastructure
Maintaining the previous judgment that "money is not omnipotent", what is more important now is to control the epidemic, ease finance, loosen real estate, expand infrastructure and other combinations. Continue to remind that the end of the policy has come and the end of the economy has not yet arrived; "Insisting on the annual development target and not relaxing" indicates that about 5.5% is still a hard requirement, and there are two "unique measures" in the follow-up: first, the existing policies should be implemented as soon as possible, and second, the policies should be "early and early", mainly "releasing water, real estate and infrastructure". The key is to avoid the "hard landing" of real estate. It is expected that the demand side (residents) and supply side (real estate enterprises) will be further loosened, including more first and second-line deregulation of purchase, sale and loan restrictions Moderately relax the "three red lines", set up a rescue mechanism for real estate enterprises, "new citizens" supporting policies, and hold a real estate Symposium. In addition, in the short term, we should also pay attention to: it is still possible to reduce interest rates (LPR reduction is greater than MLF reduction, the fastest LPR reduction is 4.20; it is also possible to reduce the deposit interest rate of banks by a little); Meeting of the Political Bureau at the end of the month; The uncertainty of the conflict between Russia and Ukraine has increased again. We still need to pay attention to the belligerent situation, negotiation progress, European and American sanctions, oil prices, etc.
Risk tips: the evolution of the epidemic, the deterioration of the external environment and the tightening of policies exceeded expectations.
