Ping An View:
Real economy: this week, the epidemic situation in China showed a trend of improvement, the operating rate was mostly lower, the inventory of industrial products was accumulated, domestic demand was cold and external demand was hot, and the price of power coal futures rose sharply. 1) From Monday to Friday (January 17 to January 21, 2022), Henan, Tianjin, Guangdong, Beijing and Shaanxi provinces and autonomous regions added a total of 271 locally confirmed cases, down from 647 newly confirmed cases in seven provinces and autonomous regions in the same period last week. 2) The industrial operating rate fell. This week, the operating rate of Tangshan blast furnace was flat month on month, the operating rate of automobile tire and semi steel tire decreased by 4.4 percentage points month on month, the operating rate of petroleum asphalt plant decreased by 3.1 percentage points month on month, and the operating rate of coking enterprises increased by 2.4 percentage points compared with last week. 3) Accumulation of industrial products. Among the finished products, the rebar factory warehouse + social warehouse increased by 8.2% month on month, and the electrolytic aluminum inventory increased by 0.6% month on month. In the raw material inventory, the port iron ore inventory decreased by 1.7% month on month, and the coking coal inventory of independent coking plant can be used for 18.4 days, with a month on month increase of 0.5 days. 4) The internal demand is cold and the external demand is hot. The area of land supply and transaction last week and the average daily sales area of commercial houses in 30 cities this week continued to fall. This week, the average daily subway passenger volume in nine major cities and the congestion delay index in four first tier cities decreased month on month, which may be related to the return of some people after the Spring Festival transportation. In the first ten days of January, the container throughput of domestic trade and foreign trade of the eight hub ports were - 3.9% and 5.9% respectively year-on-year, both rising from the previous value, indicating that China's exports are still relatively resilient. 5) Thermal coal futures rose sharply. Thermal coal futures rose 10.8% this week, due to the active inventory replenishment of chemical and metallurgical industries, the replenishment of key power plants around Beijing due to the power supply guarantee of the Winter Olympic Games, and the impact of Indonesia's export ban. Considering that the central government has repeatedly stressed the need to ensure energy supply recently, and that the current coal production and terminal inventory are at an all-time high, there may be limited room for the price of thermal coal to continue to rise. This week, the Shenzhen Agricultural Products Group Co.Ltd(000061) wholesale price 200 index rose 0.5% month on month, of which the wholesale price of pork fell 0.9% month on month and the wholesale price of vegetables rose 4.6% month on month.
Capital market: after this week's interest rate cut, most capital interest rates fell, A-share blue chips performed better than growth, the yields of main term treasury bonds fell, and the US dollar and RMB appreciated. In the money market, on Monday, the interest rates of one-year MLF and 7-day reverse repo were reduced by 10bp, and most of the capital interest rates went down. This week, dr007 went down by 10.11bp, which is close to the decline of the policy interest rate of 7-day reverse repo. In the stock market, the performance of blue chip sectors such as finance is stronger than growth this week. We believe that under the stimulation of stable growth expectation and monetary easing, the short-term undervalued financial and infrastructure sectors may continue to have a relatively stronger performance. In the bond market, the interest rate cut fell this week and the central bank leaders released a relatively loose signal on the trend of monetary policy. However, micro research shows that the credit may not have a good start this year as in 2021. Under the condition of wide currency landing and wide credit has not been effective, China's treasury bond yield curve may continue to move downward. In the foreign exchange market, the market is expected to raise interest rates by the Federal Reserve in advance, and both the US bond yield and the US dollar index rose this week. The US dollar index closed at 95.63 on Friday, up 0.50% from last Friday. This week, the onshore and offshore RMB appreciated by 0.48% and 0.26% respectively against the US dollar. In both markets, the RMB has achieved its strongest performance since May 2018, which may be related to China's strong export, demand for exchange at the end of the year and steady growth.
Risk tip: steady growth is less than expected, China's epidemic spreads at multiple points, and geopolitical conflicts escalate.
