US Federal Reserve Chairman Powell consolidated the expectation of raising interest rates by 50 basis points in May
The Central Bank of China stood still for the third consecutive month, keeping the LPR unchanged
The RMB exchange rate has weakened rapidly in the past week
New highlights: 1) China's monetary policy: on April 20, the Central Bank of China announced that the quoted interest rate (LPR) of one-year and five-year loans remained at 3.7% and 4.6% respectively, unchanged for the third consecutive month and did not decrease as expected. On April 22, the central bank convened the Party committee to implement the work deployment of the financial committee of the State Council. The meeting proposed to attach great importance to and vigorously support agricultural production and the smooth production and supply of important energy sources such as coal, oil and natural gas, so as to maintain basic price stability. 2) Fed monetary policy: on April 21, at a group meeting chaired by the International Monetary Fund (IMF), Fed chairman Powell said, "in my opinion, it is appropriate to speed up a little action". "We made these decisions at meetings, and we will make these decisions at meetings again and again, but what I want to say is that in... May, a 50 basis point interest rate increase will be put on the agenda," he said "We will really raise interest rates and quickly reach a more neutral level; once this level is reached, we will continue to tighten policy if it proves appropriate," he said 3) Delisting risk of China concept shares: at the 2022 annual meeting of Boao Forum for Asia on April 21, Fang Xinghai, vice chairman of China Securities Regulatory Commission, said in response to the recent problems of China concept shares that the negotiations between the two countries were progressing smoothly. "Now we basically negotiate on video every other week and put the details into practice". He said that he was confident that a cooperation agreement would be reached in the near future, so that PCAOB could reasonably and legally carry out the inspection of Chinese accounting firms in China, and the uncertainty in the audit and supervision of zhonggai shares would be removed soon. 4) IMF World Economic Outlook: on April 19, in its world economic outlook, the IMF lowered the global economic growth forecast for 2022 and 2023 to 3.6% respectively, 0.8 and 0.2 percentage points lower than the forecast in January 2022. The IMF said the amendment reflected the direct impact of the war in Ukraine and the sanctions imposed on Russia. Due to the indirect impact of the war, the EU's economic growth forecast this year was lowered by 1.1 percentage points, becoming the second largest contributor to the decline in global economic growth.
Macroeconomic data: China's fiscal revenue from January to March totaled 8.6% year-on-year (January to February: 10.5%), and fiscal expenditure totaled 8.3% year-on-year (January to February: 7.0%). Us: 1) new housing starts rose 0.3% month on month in March, exceeding expectations (February: 6.5%). 2) The construction permit increased by 0.4% month on month in March, exceeding expectations (February: - 1.6%). 3) In March, the sales of existing houses decreased by 2.7% month on month, lower than expected (February: - 8.6%).
Stock Market Overview: the Hang Seng, MSCI China and CSI 300 index fell 4.1%, 6.8% and 4.2% respectively in the past week. MSCI China Index: the daily consumption (- 2.3%) sector outperformed the market, while the real estate (- 10.0%) and communication services (- 9.2%) sectors performed poorly. The valuation of Hang Seng / MSCI China / CSI 300 index is 9.6 times / 10.1 times / 11.9 times forward-looking P / E ratio respectively (median value in the past three years: 11.1 times / 12.9 times / 13.1 times). In the short term, the market may fluctuate at the bottom for a period of time, with increased volatility. We are concerned about the pressure of high inflation in the United States and the risk of accelerating the pace of interest rate hikes in the coming months. If the US stock market callback, it will have a spillover effect on the China concept stock market and Hong Kong stock market. Main risks: 1) global epidemic; 2) The situation in Russia and Ukraine has further deteriorated, and the sanctions measures of western countries have exceeded expectations; 3) The accelerated pace of the Fed's interest rate hike may lead to a correction in US stocks, which is difficult for the Hong Kong stock market to survive; 4) China's economic recovery is weak, but the policy strength is less than expected; 5) China US relations continued to be tense and even deteriorated.
