Inflation and financial data in March exceeded expectations, but the epidemic affected import growth; Overseas developed countries accelerated the implementation of interest rate hikes; The central bank lowered the reserve requirement. The order of asset allocation of major categories: bulk currency stocks bonds.
Review of macro highlights
Economic data: in March, CPI was 1.5% year-on-year and PPI was 8.3% year-on-year; Social finance increased by 4.65 trillion yuan and credit increased by 3.13 trillion yuan, with M2 increasing by 9.7% year-on-year; Exports decreased by 14.7% year-on-year, and imports decreased by 0.1% year-on-year.
Highlights: the opinions of the CPC Central Committee and the State Council on accelerating the construction of a national unified market was issued; The executive meeting of the State Council determines measures to increase financial support for the real economy; The CSRC, SASAC and all China Federation of industry and Commerce put forward 12 measures to support the development of listed companies and maintain the stability of the capital market; The European Central Bank kept the three key interest rates unchanged. The Bank of Canada announced a 50 basis point increase in interest rates, the Federal Reserve of New Zealand raised the official cash interest rate by 50 basis points, and the Bank of Korea unexpectedly raised interest rates by 25 basis points; The central bank decided to cut the reserve requirement by 0.25 percentage points on April 25.
Asset performance review
A shares continued to fall. This week, the CSI 300 index fell 0.99%, and the CSI 300 stock index futures fell 0.89%; Coking coal futures rose 1.38% this week, and the main iron ore contract rose 0.44% this week; The expected yield of financial management of joint-stock banks closed at 3.64%, and the 7-day annualized yield of yu'e Bao fell 8bp to 1.92%; The yield of 10-year Treasury bonds was flat at 2.76%, and the active 10-year Treasury bond futures fell 0.11% this week.
Asset allocation suggestions
Asset allocation: bulk currency stocks bonds. This week, the Bank of Canada raised interest rates by 50bp and started quantitative tightening. The Federal Reserve of New Zealand raised interest rates by 50bp and South Korea raised interest rates by 25bp, both exceeding market expectations. On the other hand, the WTO lowered the forecast of Global trade growth in 2022 to 2.4% - 3% from 4.7% in October last year. The IMF also said that the conflict between Russia and Ukraine will lead to a decline in the economic growth prospects of 143 economies accounting for 86% of global GDP, so it will reduce the overall economic growth prospects this year and next. The higher than expected increase in interest rates by overseas central banks will significantly push up the financing costs of the real economy, superimposed on the weakening of the expectation of global economic growth prospects, which will further affect the risk appetite of international capital. It is expected that under the influence of high inflation pressure and weak demand recovery, international capital may further return to safe haven assets, which will have a negative impact on emerging countries and regions, including RMB assets.
Risk tip: global inflation is rising too fast; Liquidity flows back to US debt; The global covid-19 epidemic has expanded its impact.
