In terms of macro economy, the overall economic data in March was weak, and the impact of the epidemic on the economy gradually appeared, of which the impact on consumption was the most obvious, and the impact on investment and production initially appeared. From the demand side, real estate sales also showed an accelerated downward trend, reflecting the limited effect of the recent relaxation policy. In March, the consumption growth rate fell sharply to negative growth, including catering consumption, real estate related consumption and automobile consumption, which showed that under the rapid spread of the epidemic, residents' willingness to save for prevention increased again and their willingness to consume weakened. The bright data in March was infrastructure investment. Driven by a series of steady growth policies, the growth rate of infrastructure investment rose to around 10%, slightly higher than the market expectation. From the production side, the production growth rate fell in March, but the growth rate of coal mining and ferrous and non-ferrous metal smelting driven by infrastructure increased. Affected by the epidemic, other industries have the phenomenon of supply chain interruption or inability to resume production, and the production growth rate has declined, especially in the automotive industry. Looking back, the impact of the epidemic on the economy is still continuing. It is expected that service consumption will continue to decline in April, and investment and production will also be significantly reflected.
Since April, after the time point at the end of the quarter, the capital surface is generally wide, and the short-term capital interest rate and long-term capital interest rate have declined. With the failure of MLF's interest rate cut in April and the lower than expected rate cut, the game of loose monetary policy has come to an end, and the wider monetary policy will stabilize. Looking back, the tax payment is about in April, and the maturity pressure of interbank certificates of deposit in April and may is not small, and there is a certain upward pressure on the capital interest rate. However, it is expected that the central bank will increase the net investment before the end of the month, and the liquidity will remain intact after the periodic pressure. In addition, the contents of more structural policies were also mentioned in the national standing committee meeting, and it is expected that more structural policies will be introduced in the future.
In terms of interest rate bond strategy, since late March, the yield has maintained a narrow range. From a fundamental point of view, affected by the spread of the epidemic, the downward pressure on the economy increased in April. However, for the bond market, the current decline in fundamentals is short-term, and there are still concerns about the sustained economic repair under the follow-up steady growth policy. Monetary policy will continue to be loose in the short term, but the constraints of tightening overseas monetary policy are increasing, prices are also under certain upward pressure, and the constraints faced by the continued easing of monetary policy are increasing. Generally speaking, the monetary environment is relatively loose in the short term, and the upward risk of interest rate is limited, but there is great uncertainty in further easing and the game space is limited. It is recommended to be cautious in the trading order, participate slightly, fast in and fast out. In the medium and long term, the epidemic situation will be gradually controlled and the steady growth policy will continue to work. At the same time, there is a certain upward pressure on prices and the weakening demand of overseas institutions, which may bring an inflection point of interest rate. It is suggested to pay attention to the medium and long-term upward risks and allocation opportunities.
