A week’s events
China: accelerating the release of tax rebate dividends, steady growth and giving priority to employment. On May 16, the central bank launched a one-year 100 billion yuan MLF operation, and the bid winning interest rate was unchanged from 2.85% last time. On May 20, the five-year LPR was cut by 15 basis points to 4.45% higher than expected. At present, China’s monetary policy insists on not engaging in flood irrigation. It is expected that the follow-up will still focus on structural policies to help the economy, cooperate with stable fiscal growth, and the recent incremental policy tools are more promising; On April 17, the State Administration of Foreign Exchange announced the data of bank settlement and sales of foreign exchange and foreign-related collection and payment on behalf of customers. In April, the surplus of foreign exchange settlement and sales continued to be US $19 billion, and the surplus of foreign-related collection and payment was US $16.2 billion. The overall cross-border capital flow situation remained stable; On January 17, the national development and Reform Commission explained the approval of investment projects, stabilizing employment, stabilizing prices, foreign investment and county construction. From January to April, the approval of fixed asset investment projects approved by the national development and Reform Commission significantly exceeded the level of the same period last year. Driven by the accelerated issuance of special bonds, the approval of fixed asset investment projects will be further accelerated, and the growth rate of infrastructure investment is expected to be better; On April 17, the Ministry of Finance released the fiscal revenue and expenditure in April. Both narrow and broad fiscal revenue and expenditure showed a contraction trend: due to the value-added tax rebate of 801.5 billion yuan in April, the general public budget revenue decreased by 41.34% year-on-year and the expenditure decreased by 1.96% year-on-year, but the expenditure on agriculture, forestry and water affairs increased more brightly. In May, the epidemic situation is gradually improving, the logistics is gradually recovering, the issuance of special bonds is expected to be accelerated in the second quarter, the follow-up financial expenditure will be accelerated, and the financial increment policy tools are expected to be issued; On the 18th, Li Keqiang held a symposium on stabilizing growth, stabilizing market players and ensuring employment, with the participation of all the top 10 provinces in China. The meeting pointed out that the determined policies should be basically implemented in the first half of the year, and the new measures can be put out in May to ensure that the economy operates within a reasonable range in the first half of the year and the whole year; On the 18th, the Ministry of Finance reported eight typical cases of new implicit debt and false resolution of implicit debt and accountability measures. At this stage, the bottom line of preventing major financial risks will not be relaxed, and the possibility of marginal relaxation of the corresponding urban investment and financing environment will also be greatly reduced.
Overseas: the Federal Reserve reiterated the path of raising interest rates, and the geopolitical situation in Europe is facing changes. On May 14, the IMF announced that it would increase the SDR weight of RMB from 10.92% to 12.28%. At the same time, it would increase the weight of US dollar and reduce the weight of euro, yen and sterling, which would help alleviate the repeated concerns of the short-term market about the Chinese epidemic and play a positive role in boosting the confidence of RMB and supporting the RMB exchange rate; On the 18th local time, Finland and Sweden officially submitted an application letter for “accession” to NATO. If they successfully join NATO or make Russia fall into a greater security dilemma, the relationship between European countries and Russia may further deteriorate and bring a great blow to the European economic recovery, but at the same time, it also forces Europe to accelerate the pace of energy transformation; On the 17th local time, Powell reiterated that the Fed may continue to raise interest rates by 50 basis points in the future until inflation drops significantly. At the same time, he believed that the US economy can resist the negative impact of raising interest rates. It is expected that the Fed will raise interest rates as planned, but there is still some uncertainty; On the 18th, Japan’s GDP in the first quarter fell by 1% year-on-year. Affected by the deterioration of trade caused by the depreciation of the yen and the impact of epidemic restrictions on consumer spending, the contraction rate was lower than expected. Consumer spending may pick up after the elimination of epidemic prevention and control restrictions, but Japan’s economy is still facing a severe test.
High frequency data: upstream: Brent crude oil rose 4.97% on a weekly basis, while iron ore and cathode copper prices rose 1.84% and 0.21% on a weekly basis respectively; Middle reaches: the prices of rebar and cement decreased by 1.87% and 1.00% on a week-on-week basis, and the price of thermal coal increased slightly on a week-on-week basis; Downstream: real estate sales decreased by 1.95% on a weekly basis, and the performance of automobile retail improved; Prices: the price of vegetables decreased by 3.07% on a weekly basis, and the price of pork increased by 0.81% on a weekly basis.
Focus next week: Markit manufacturing PMI in the euro zone and the United States in May (Tuesday); Germany’s GDP in the first quarter and CPI in May (Wednesday); Us real GDP in the first quarter (Thursday); Profits of Industrial Enterprises above Designated Size in China in April, CPI of Tokyo in Japan in May, price index of the United States in April, commodity trade account of PCE in April, and consumer confidence index of the University of Michigan in May (Friday).
Risk tip: the epidemic situation has further deteriorated, the implementation of policies is less than expected, and the geopolitical impact is more than expected.
