Macroeconomic: high frequency data show that China's demand is still weak and foreign trade remains strong. It is preliminarily estimated that the year-on-year growth rate of CPI in December is 1.6%, and the year-on-year growth rate of PPI is about 11%. Last week, the central bank invested a net 660 billion yuan, and the money market capital interest rate decreased.
Equity market: Beijing, Henan and Tibet held two sessions in 2022. Beijing lowered the economic growth target for 2022 from 6% in 2021 to more than 5%, pointing out that the economic growth target is set at more than 5%, which takes into account the needs and possibilities, connects with the potential growth rate, and also leaves room for epidemic prevention and control, structural adjustment and coping with the uncertainty in economic operation. Historically, the economic growth goals of Beijing and Shanghai are basically consistent with the national economic growth goals. However, considering that Beijing may have greater restrictions on epidemic prevention and control, follow-up attention will be paid to the goals of the two sessions in Shanghai.
Fixed income market: no matter from the perspective of coordinating with steady growth or preventing real estate debt risk, it is expected that monetary policy will at least maintain a relatively loose environment, and the risk of obvious adjustment of yield is relatively controllable. However, further rise of subsequent bonds may need to see the fulfillment of the expected interest rate cut, but we tend to think that it is difficult to reduce interest rate by game, With the development of other policies, the future stability of fundamentals is expected to be unfavorable to bonds. Further considering that the current bond valuation is too expensive and the cost performance of long bonds is low, it is suggested that the duration strategy is neutral and cautious.
