The central bank offered a fancy double fall:
1) the interest rate reduction was completed voluntarily by the bank, but some positive incentives were given in the MPA assessment, but the incentive policy and strength were not clarified;
This is an unprecedented 2.0 percentage point reduction in reserves.
It can be seen that the central bank is very restrained in easing
1) the linkage mechanism between deposit interest rate and loan interest rate has long failed. The central bank not only did not force the interest rate adjustment, but also adjusted the deposit interest rate;
2) the RRR only released 530 billion yuan of liquidity. This month, the central bank's unhedged open market position (including treasury cash deposit) reached 770 billion yuan, and the liquidity released by the RRR has been completely submerged.
If we only understand from endogenous factors, easing is indeed necessary:
1) price represents the cost of monetary policy. At present, in the deceleration stage of price, the cost of monetary easing is decreasing;
2) there are also some problems in economic growth, and the epidemic prevention policy has a negative impact on economic growth.
However, the central bank should take extra consideration of the pressure at the overseas level. After all, the bond yields of the United States and the eurozone are rising sharply, and the upside down of the interest rate difference between China and the United States shows that there is a greater risk of imbalance in cross-border capital.
Of course, overseas pressure is not a sufficient condition for monetary policy restraint. If the economic pressure comes from too tight currency, monetary policy must be relaxed anyway, but now it is obviously not: the real estate pressure comes from real estate control, and the traffic and logistics pressure comes from epidemic control.
At this time, the benefit of monetary easing will be lower than the cost. It is under this consideration that there is a new idea in the form of this double drop. This seemingly non existent double drop has a low impact on economic growth. Moreover, the pain point of the current economy is demand.
This policy has little impact on various assets. The yield of interest rate bonds has continued to rise since January 24, which means that the trading focus of interest rate bonds is not the epidemic at all. The double reduction policy brought about by the epidemic will not bring too profound market. The more important thing may be the policy and interest rate pressure caused by the rise of peripheral yield.
The trajectory of credit is also difficult to be affected by this policy. Therefore, the impact on medium and high-risk assets (stock market and commodities) should be negligible.
Risk tip: monetary policy exceeded expectations and economic recovery exceeded expectations
