Core view:
In terms of the real economy, the decline in sales of real estate and passenger cars has expanded since April, and the decline in steel production narrowed last week, pointing to weak terminal demand and better industrial production. In terms of prices, since April, the prices of meat and vegetables on the demand side have fallen, and the prices of fruits have risen; The prices of oil and coal at the production end fell and the price of steel differentiated. On the one hand, the central bank issued RMB 10 billion of short-term and long-term treasury bonds last week, and the net interest rate of 100.7 billion of dry was divided into two sides. On the one hand, the short-term and long-term treasury bonds issued by the central bank last week, and the net interest rate of 100.1 billion of dry was reduced. On the other hand, the market was divided into two sides.
In terms of policy, the central bank comprehensively reduced the reserve requirement by 0.25 percentage points and released 530 billion long-term funds. Focus on the first quarter economic data next week.
One week scan:
Overseas economy: US retail sales increased slightly and consumer confidence rebounded. In March, retail sales in the United States increased by 0.5% month on month (MOM) and is expected to be 0.6%. The year-on-year growth rate fell sharply to 6.9%, with the previous value of 18.2%, the lowest level since February 2021. On April 14, the European Central Bank announced its latest monetary policy resolution, maintaining the three major interest rates unchanged and confirming to accelerate the withdrawal from the net asset purchase plan.
China's economy: terminal demand is still weak and industrial production is improving. In the first 14 days of April, the year-on-year decline of commercial housing transaction area in 30 cities expanded to 55.8%; In the first 10 days of April, the year-on-year growth rate of passenger car wholesale and retail sales of the passenger Federation expanded. The blast furnace operating rate continued to rise in the latest week, and the decline in steel output of the sample steel plant narrowed.
China's prices: prices are divided. Since April, fruit price, vegetable basket and Shenzhen Agricultural Products Group Co.Ltd(000061) wholesale price index have increased by 7.5%, 1.7% and 1.6% respectively compared with the average of the previous month, while vegetable price and meat price have decreased by 3.1% and 0.7% respectively compared with the average of the previous month. The prices of rebar and hot-rolled sector steel increased by 2.9% and 1.7% respectively compared with the average value of the previous month, and WTI oil, Brent oil and thermal coal decreased by 7.4%, 6.9% and 0.5% respectively compared with the average value of the previous month.
China's liquidity: the central bank withdraws funds, and the interest rate spread between China and the United States hangs upside down. In the latest week, the average values of R001 and dr001 decreased by 18bp and 18bp to 1.67% and 1.62% respectively; The average values of R007 and dr007 decreased by 14bp and 10bp to 1.97% and 1.88% respectively. The central bank made a net recovery of 50 billion yuan in the open market. The RMB depreciated against the US dollar, and the weekly average value of the US dollar index rebounded to 100.2. The weekly average value of the US bond interest margin in 10Y narrowed by 17.8bp. On April 11, the US China interest margin narrowed to - 2bp, forming an upside down. 1y treasury bonds and 10Y treasury bonds decreased by 7.5bp and increased by 0.5bp to 1.99% and 2.76% respectively month on month. 157.2 billion yuan of treasury bonds were issued, and 50.8 billion yuan of local government bonds were issued, including 19 billion new special bonds.
China's highlights: the central bank implemented a comprehensive RRR reduction. Premier Li Keqiang presided over the national standing committee meeting. The central bank decided to cut the deposit reserve ratio of financial institutions. The central bank held a press conference on financial statistics in the first quarter of 2022. The State Council Information Office held a briefing on accelerating the issuance and use of government bonds. The epidemic prevention and control in Jilin Province has achieved the goal of zero social aspects.
Risk tips
1. The policy strength is less than expected;
2. Geopolitical conflict intensifies.
