I. GDP in the first quarter slightly exceeded expectations. The year-on-year growth rate of GDP in the first quarter of this year returned to 4.8%, slightly better than the market expectation. Among them, the steady growth policy continued to increase, the infrastructure was advanced, and the investment in fixed assets rebounded significantly. However, under the impact of the epidemic, the sealing and control measures became stricter, the resident unemployment rate rose, and the consumption weakened significantly, which became the main drag on the economic recovery. In addition, export growth remained resilient, but its pull on the economy weakened. Under the further downward pressure of China's economy caused by more than expected factors such as geopolitics and the epidemic, the premier of the State Council has intensively deployed policies and measures to stabilize growth recently: the central bank announced a comprehensive reduction of reserve requirements by 25bp, accelerated the issuance of local special bonds, and many ministries and commissions such as the national development and Reform Commission, the Ministry of industry and information technology, the Ministry of transport and the Ministry of Commerce coordinate all localities to actively resume work and production and dredge transportation and logistics. As the epidemic prevention and control in Shanghai has achieved phased results and orderly promoted the resumption of work and production, the policies related to the expansion of investment in the second quarter will be accelerated, and social consumption is expected to improve and become the main driving force for steady growth.
Second, the expectation of interest rate reduction failed again. On April 20, the latest results of LPR were released. The LPR for one-year period was 3.7%, and the LPR for more than five years was 4.6%. LPR has remained unchanged for three consecutive months, and the market's expectation of interest rate reduction has failed again. Although the expectation of interest rate reduction has failed again and again, it does not hinder the downward function of the average loan interest rate. In March this year, the newly issued enterprise loan interest rate was 4.37%, 8 basis points lower than that in December last year. It is expected that the loan interest rate will continue to maintain a steady downward trend in the future, support the industries seriously affected by the epidemic, small, medium-sized and micro enterprises, individual industrial and commercial households to tide over the difficulties and stabilize the economic fundamentals.
III. the expectation that the Federal Reserve will accelerate the tightening of monetary policy is heating up. US Federal Reserve Chairman Powell approved the "pre interest rate hike" strategy at the International Monetary Fund Seminar on the 21st, saying that raising interest rates by 50 basis points at the Fed's meeting on May 3-4 would be "one of the options". Affected by this, the interest rate increase expectation implied in the current money market interest rate is rising: the Federal Reserve will raise the policy interest rate target range to 2.75% - 3%, that is, raise interest rates by 50 basis points at the three upcoming meetings and 25 basis points at the remaining three meetings this year. This led to the collective setback of global stock markets, bonds, non US currencies and commodities. In the future, the Federal Reserve will officially start the cycle of raising interest rates, and it is likely that in order to curb high inflation, it will not hesitate to take a radical wrong strategy of raising interest rates. It will raise interest rates by 50bp and begin to shrink the table at the next few meetings, which will accelerate the tightening of global liquidity and the US dollar index will tend to rise.
IV. global liquidity tightening is expected to drag down commodities. In recent trading days, the high level of commodities fell, mainly due to the sharp rise in the expectation of the Federal Reserve to accelerate the tightening of monetary policy, which led to the collective weakness of global stocks, bonds, foreign exchange and businesses. At present, commodity prices are at historic highs, and risk factors are also increasing. We should be vigilant against the decline of commodity highs: first, in order to combat high inflation, the Federal Reserve may adopt a radical interest rate increase strategy, and global liquidity will be tightened faster; Second, the world bank, IMF and other international organizations once again lowered their global economic growth expectations, indicating that the pace of global economic recovery has slowed significantly; Third, China's high-level leaders will again propose to ensure the supply and stable price of bulk commodities and will take effective measures to increase the supply of coal and other energy. However, it is worth noting that the tension in the global supply chain has not been fundamentally improved. There is a long-term development trend in the conflict between Russia and Ukraine, and China's steady growth will concentrate after the epidemic.
