Key investment points:
The general office of the State Council issued the opinions on doing a good job in cross cycle regulation and further stabilizing foreign trade. The opinions put forward 15 policies and measures from the aspects of strengthening fiscal, tax and financial policy support, further encouraging the development of new forms of foreign trade, alleviating the pressure of foreign trade supply chain such as international logistics and supporting key industries and key enterprises.
I. tap the import and export potential
(I) give further play to the leading role of overseas warehouses. Actively use the service trade innovation and development guidance fund to promote the high-quality development of overseas warehouses in accordance with policy guidance and market operation.
(II) do a good job in the import of bulk commodities. We will actively ensure the supply of bulk commodities to China. We will make overall plans to ensure the stable operation of all links of bulk commodity import.
(III) tap the import potential of consumer goods. Further adjust and optimize the list of cross-border e-commerce retail imported goods, expand import categories, and better meet diversified consumer demand.
II. Ensure the stability and smoothness of the supply chain of the foreign trade industry chain
(IV) ease the pressure of international logistics. Encourage foreign trade enterprises to sign long-term agreements with shipping enterprises.
(V) cultivate a new batch of foreign trade innovation and development pilot projects. Add a comprehensive cross-border e-commerce pilot zone.
(VI) stabilize the development of processing trade. Strengthen the cultivation and construction of national processing trade industrial parks, and deepen the cooperation and joint construction between the East, the central and western regions and the northeast. The domestic sales tax of processing trade enterprises will be temporarily exempted, and the deferred tax interest will be until the end of 2022.
(VII) cultivate trade double circulation enterprises. We will foster a number of trade double cycle enterprises with international competitiveness and support trade double cycle enterprises to strengthen innovation in key technologies and business models.
(VIII) improve the level of trade liberalization and facilitation. Take the effective implementation of RCEP as an important starting point for stabilizing foreign trade. Continue to accelerate the progress of export tax rebate.
(IX) accelerate the promotion of trade adjustment assistance. Support all localities to establish and improve the trade adjustment assistance system in combination with local conditions, actively carry out trade adjustment assistance, and help stabilize the industrial chain and supply chain.
III. stabilizing market entities and guaranteeing orders
(x) consolidate and enhance the role of export credit insurance. On the premise of legal compliance and controllable risk, further optimize the conditions for export credit insurance underwriting and claim settlement.
(XI) continuously cultivate and develop the policy financing business under short-term insurance. Encourage and guide banking institutions to innovate insurance policy financing and other products in combination with the needs of foreign trade enterprises.
(XII) pay close attention to foreign trade credit. Give full play to the role of various financial institutions and increase credit support for foreign trade enterprises on the premise of legal compliance and controllable risk.
(XIII) improve the ability of foreign trade enterprises to deal with exchange rate risks. Keep the RMB exchange rate basically stable at a reasonable and balanced level.
(XIV) actively and steadily promote RMB cross-border trade settlement. Expand the cross-border use of current account RMB. （15） Further stabilize employment in the field of foreign trade. For labor-intensive export enterprises, all localities should implement various policies and measures to reduce burdens, stabilize posts and expand employment.
Overall, the opinions is another policy guideline under the recent goal of “stable growth”. At present, China’s foreign trade is facing more uncertain, unstable and unbalanced factors, and the foundation of foreign trade operation is not solid. We should further expand opening-up, do a good job in cross cycle adjustment, help enterprises rescue, especially support small, medium-sized and micro foreign trade enterprises, which is conducive to maintaining orders, stabilizing expectations, and promoting the steady development of foreign trade and economy.
Powell: this reduction will be “earlier and faster” than last time
At the nomination hearing, Fed chairman Powell said that if the Fed sees that inflation lasts longer than expected, it will have to further raise interest rates over time. With regard to the Fed’s reduction of bond purchase and table reduction process, Powell said that asset purchase will be ended by the end of March, and the balance sheet may be allowed to shrink later this year. This reduction of balance sheet will be “earlier and faster” than the last time, and the balance sheet voting will be held later in 2022.
On the whole, Powell’s speech was basically consistent with the market expectation, but this expectation may have been priced by the market. After the speech, US stocks still closed up and the US dollar index closed down slightly. Over the past period of time, the expectation of the acceleration of the normalization of the U.S. currency has led to a significant rise in U.S. bond yields, and U.S. technology stocks have also adjusted significantly. Since the outbreak, the size of the balance sheet has doubled to more than $8 trillion. After the interest rate hike this year, the Federal Reserve may usher in the beginning of the reduction of the balance sheet at the end of the year or the beginning of the next year.
Increase in financing balance. On January 10, the balance of A-share financing was 1704.526 billion yuan, an increase of 1.835 billion yuan month on month; The balance of margin trading was 1816.199 billion yuan, an increase of 1.607 billion yuan month on month. The balance of financing minus securities lending was 1592.853 billion yuan, an increase of 2.064 billion yuan month on month.
Net outflow of funds to the north. On January 11, the net purchase turnover of land stock connect on that day was -4.026 billion yuan, including 55.813 billion yuan of purchase turnover and 59.840 billion yuan of sales turnover, with a cumulative net purchase turnover of 164.512 billion yuan. Hong Kong stock connect had a net purchase transaction of HK $1.778 billion on the same day, including a purchase transaction of HK $14.408 billion and a sale transaction of HK $12.630 billion, with a cumulative net purchase transaction of HK $2195.732 billion.
Money market interest rates fluctuated. On January 11, Bank Of Shanghai Co.Ltd(601229) inter-bank offered rate Shibor’s overnight interest rate was 1.9840%, up 10.60bp, and Shibor’s weekly interest rate was 2.1310%, up 3.80bp. The weighted interest rate of pledged repo of deposit institutions was 1.9733% overnight, up 9.79bp and 2.0938% a week, up 4.67bp. The 10-year maturity yield of China national debt was 2.7957%, down 0.99bp.
The three major U.S. stocks rose, while the European stock market rose. On January 11, the Dow Jones Industrial Average closed at 36252.02 points, up 0.51%; The S & P 500 index closed at 4713.07, up 0.92%; The NASDAQ index closed at 15153.45, up 1.41%. European stock markets, French CAC index closed at 7183.38 points, up 0.95%; Germany’s DAX index closed at 15941.81 points, up 1.10%; The FTSE 100 index closed at 7488.09, up 0.58%. In the Asia Pacific market, the Nikkei index closed at 28222.48 points, down 0.90%; The Hang Seng Index closed at 23739.06, down 0.03%.
The dollar index fell. On January 11, the dollar index fell 0.37% to 95.5957. The euro rose 0.34% against the dollar to 1.1366. The dollar rose 0.08% against the yen to 115.2900. Sterling rose 0.43% against the dollar to 1.3636. The spot exchange rate of RMB against the US dollar closed at 6.3718, up 0.00%. The spot exchange rate of offshore RMB against the US dollar closed at 6.3772, up 0.07%. The central parity rate of RMB against the US dollar closed at 6.3684, depreciating by 0.05%.
Gold rose and crude oil rose. On January 11, Comex gold futures rose 1.12% to close at US $1821.50/oz. WTI crude oil futures rose 3.70% to close at US $81.33/barrel. Brent crude oil futures rose 3.40% to close at US $83.75/barrel. COMEX copper futures rose 1.36% to close at US $4.4325/lb. LME copper three-month futures rose 1.71% to close at US $9729 / ton.
