Ping An View:
On April 18, the people’s Bank of China and the State Administration of foreign exchange issued the notice on doing a good job in epidemic prevention and control and financial services for economic and social development, proposing 23 policies and measures. We can sum it up in three aspects: first, the coping strategies under the increasing complexity and uncertainty of China’s external environment, including supporting the relief of the subjects affected by the epidemic, providing financial services in the fields of food and energy, ensuring smooth logistics and promoting the stability of the supply chain. Second, stabilize China’s demand and strengthen financial services for key consumption, new citizens and effective investment. Third, optimize the handling of foreign exchange and cross-border RMB business, and promote the steady development of foreign trade exports.
Real economy: this week, the industrial operating rate is divided and the inventory is removed; Real estate high-frequency data recovery; Black commodities rose in spot and futures weakened. 1) From last Saturday to this Friday (April 16 to April 22), a total of 20197 newly confirmed cases were added in 24 provinces and autonomous regions such as Shanghai, Jilin and Heilongjiang, an increase from April 9 to April 15. 2) The operating rate continued to differentiate. The operating rate of Tangshan blast furnace and coking enterprises decreased by 0.8 percentage points and increased by 1.3 percentage points respectively month on month; The operating rate of petroleum asphalt units and mill operation rate related to capital construction decreased by 2.3 percentage points and increased by 2.4 percentage points respectively month on month. The operating rates of semi steel tires and all steel tires related to the automobile industry chain decreased by 1.0 percentage points and increased by 2.4 percentage points respectively month on month. 3) Industrial inventory destocking. Among the finished products, the stocks of rebar factory warehouse + social warehouse and electrolytic aluminum decreased by 0.3% and 4.3% month on month respectively last week. Among the raw materials, the port iron ore inventory decreased by 1.0% compared with last week, and the coking coal inventory of independent coking plant can be used for 15.2 days, which is the same as last week. 4) The low-level recovery of real estate high-frequency data. This week, the average daily sales area of commercial housing in 30 cities increased by 14.9% month on month, and the sales area of commercial housing in first tier and third tier cities rebounded significantly. Last week, the primary land market also showed signs of recovery. The land supply area and land transaction area of 100 cities increased by 65.7% and 22.1% month on month respectively, and the land premium rate of 100 cities increased to 1.8%. 5) Black commodities rose in spot and futures weakened. This week, the spot prices of coking coal, coke, rebar and iron ore rose by 6.6%, 5.6%, 0.4% and 0.2% respectively, and the futures of corresponding varieties fell. This week, the Shenzhen Agricultural Products Group Co.Ltd(000061) wholesale price 200 index fell 1.1% month on month; Among them, the wholesale prices of vegetables fell by 2.8% month on month, while the wholesale prices of eggs and fruits rose by 4.5% and 1.5% month on month respectively; Wholesale pork prices rebounded 0.6% month on month.
Capital market: under the influence of still great pressure on epidemic prevention and control, weak economic data in China in the first quarter, further upward US dollar index and continued upside down interest rate spread between China and the United States, China’s stocks, bonds and remittances weakened simultaneously this week. Specifically, in the money market, R007 and dr007 were down 15.6bp and 18.9bp respectively compared with last Friday. In the bond market, the yield of one-year treasury bonds fell by 3.8bp this week, and the term interest margin of 10y-1y treasury bonds widened by 12.1bp compared with last week. In the stock market, all major stock indexes fell, and the cycle and growth style fell significantly. In the foreign exchange market, the US dollar index rose 0.6% on Friday. The onshore RMB depreciated by 1.79% against the US dollar and the offshore RMB depreciated by 2.23%.
Risk tip: the steady growth is not as strong as expected, the epidemic in China continues to spread at multiple points, the rate of interest rate increase and table contraction of the Federal Reserve is faster than expected, and the geopolitical conflict further escalates.
