Economic fundamentals and policy judgment
From the annual economic data, the annual economic growth rate in 2021 basically matches the potential growth rate. The production demand at both ends of the sub items performs well, and the overall recovery momentum is not weak. According to the economic data of December 2021, China's economy as a whole is still in the recovery range, the recovery of the production side is relatively stable, and the overall inflation pressure has been significantly relieved. However, there are many structural problems with the growth of the total amount of social finance, reflecting the sluggish credit demand of the real economy, and the credit effect of monetary policy easing remains to be reflected: (1) the proportion of government financing has increased, The growth of RMB loans is unfavorable. (2) The proportion of bill financing has increased significantly, and the bill impulse behavior drives the extreme market. (3) The marginal repair of social finance is slower than m2, and the scissors gap continues to narrow.
According to the tone set by the national standing committee, in order to ensure the "smooth operation of the economy in the first quarter and the first half of 2022", the monetary side maintained a relatively loose tone, and the central bank cut the interest rates of Omo and MLF by 10bp each on January 17, 2022; At the same time, in order to guide the decline of the financing cost of the real economy, the one-year lpr10bp and five-year lpr5bp were lowered on January 20, implying the marginal loosening of real estate regulation. The financial side actively promotes infrastructure construction and forms physical workload. It is roughly estimated that the financial space before and after the first quarter is about 2.5 trillion.
Economic data and policy outlook
In terms of economic data, it is expected that the PMI will be basically flat in January 2022, the industrial production side will continue to recover better than the demand side, and the industrial added value will continue to rise slightly year-on-year. On the investment side, with the loosening of real estate and the landing or upward of infrastructure, consumption is expected to fluctuate under the constraints of the epidemic, and exports are expected to maintain a high growth rate. In terms of inflation, PPI is expected to continue to decline, while CPI may rise.
At the policy level, with the implementation of monetary policy interest rate reduction, according to historical experience, it will start a two to three interest rate reduction cycle, and the operation window is probably in the first quarter; But in fact, the core goal of the central bank is to stabilize credit at a desirable level. If the credit data in January turns better, the probability of continuing to cut interest rates in the future will also decline. The financial side expects that the capital construction funds will be accelerated. Under the multi-objective constraints, the current "stability oriented", and the audit and warehousing of infrastructure projects may be marginal loose.
Interest rate debt strategy: be cautious in the short term
In the past week, while the central bank cut interest rates, it also showed many cards of monetary easing, and the easing expectation of the market continues. At the same time, from the long-term interest rate performance, in the face of the potential downward pressure on the economy, the market generally doubts the effectiveness of the current wide credit. Driven by the weakening of capital interest rate and expectation, it continued to drop to around 2.7% and began to fluctuate in the center.
At present, the macro high-frequency data in the first half of January also did not reflect the significant recovery momentum. It is expected that the credit easing policy will take time. However, from the policy determination of the central bank to "open a large toolbox" and the space for fiscal investment, we will focus on the effect of credit easing in February and March. Once the inertia of economic recovery is formed and the situation tends to be clear, the long-term interest rate may rise rapidly.
Risk tip: the downward space of yield is limited, and there is uncertainty in the operation of interest rate and reserve requirement reduction
