Week overview:
Macro highlights: Li Keqiang presided over the Symposium on tax reduction and fee reduction; The Ministry of Commerce and other 22 departments issued the “14th five year plan” for domestic trade development; There is great downward pressure on the economy and intensive policies are issued at the end of the year; In December, the number of new non-agricultural employment in the United States was 199000, the lowest since January 2021; The number of initial jobless claims in the United States this week was higher than expected.
Data tracking: in terms of funds, the central bank returned 660 billion yuan in the week; The operating rate of 247 blast furnaces surveyed by Mysteel increased by 5.9%, and the operating rate of 110 coal washing plants in China decreased to less than 70%; During the week, the prices of iron ore, power coal and rebar rose; The prices of electrolytic copper, cement and concrete fell; The average daily retail sales of passenger cars in the week was 109000, down 9%; BDI rose 3.6%.
Financial market: the prices of major commodity futures rose this week; Among the global stock markets, China’s stock market and US stock market fell significantly, while European stock market basically rose; The US dollar index was 95.75, down 0.25%.
1、 Macro highlights
（1） Hot spot focus
◎ Premier Li Keqiang chaired a symposium on tax reduction and fee reduction. Li Keqiang said that in the face of the new downward pressure on the economy, we should continue to do a good job in the “six stabilities” and “six guarantees”, and implement greater combined tax cuts and fee reductions according to the needs of market subjects, so as to ensure a stable start of the economy in the first quarter and stabilize the macro-economic market.
◎ the Ministry of Commerce and other 22 departments have issued the “14th five year plan” for domestic trade development. By 2025, the total retail sales of social consumer goods will reach about 50 trillion yuan; The added value of wholesale and retail, accommodation and catering reached about 15.7 trillion yuan; Online retail sales reached about 17 trillion yuan. In the 14th five year plan, we will increase the promotion and application of new energy vehicles and actively develop the automotive aftermarket.
◎ on January 7, the people’s Daily published an article by the Policy Research Office of the national development and Reform Commission, pointing out that steady growth should be put in a more prominent position and a stable and healthy economic environment should be maintained. We will coordinate epidemic prevention and control and economic and social development, continue to implement an active fiscal policy and a prudent monetary policy, and organically combine cross cyclical and counter cyclical macro-control policies.
◎ in December 2021, Caixin China’s manufacturing PMI recorded 50.9, up 1.0 percentage points from November, the highest since July 2021. China’s Caixin service industry PMI in December was 53.1, expected to be 51.7, with the previous value of 52.1. China’s Caixin comprehensive PMI in December was 53, with the previous value of 51.2.
At present, there is great downward pressure on the economy. In order to respond positively, policies were intensively issued at the end of the year. First, the policy of expanding domestic demand has gradually become clear. Under the triple influence of shrinking demand, supply shock and weakening expectation, the economy is facing downward pressure in the short term. Given that consumption is the main driving force (investment is the key marginal determinant), it is clear that this policy will not be absent. From the current situation, the consumption of automobiles, household appliances, furniture and home decoration, which account for a large proportion, will become the focus of stimulation. In terms of investment, new infrastructure has become the focus of planning. But overall, the main focus used to hedge the decline in real estate is still traditional infrastructure
◎ according to the data released by the U.S. Department of labor, the number of new non-agricultural employment in the United States in December 2021 was 199000, lower than the expected 400000, the lowest since January 2021; The unemployment rate was 3.9%, better than the market expected 4.1%. Analysts believe that although the U.S. unemployment rate fell month on month in December last year, the new employment data is poor. Labor shortage is becoming a greater constraint on employment growth, and the relationship between supply and demand in the U.S. labor market is becoming increasingly tense.
◎ as of January 1, the number of initial claims for unemployment benefits in the week was 207000, and it is expected that 195000. Although the number of initial claims for unemployment benefits has increased compared with last week, it has hovered near a 50-year low in recent weeks, thanks to the fact that the company is keeping its existing employees under the general situation of employee shortage and resignation. However, as schools and businesses began to close, the spread of Omicron once again aroused people’s concerns about the economy.
（2） Overview of key news
◎ Premier Li Keqiang presided over the executive meeting of the State Council to deploy measures to fully implement the list management of administrative licensing matters, standardize the operation of power and benefit enterprises and the people to a greater extent. We will implement classified management of enterprise credit risk and promote more fair and effective supervision.
◎ he Lifeng, director of the national development and Reform Commission, wrote that we should implement the outline of the strategic plan for expanding domestic demand and the implementation plan of the 14th five year plan, accelerate the issuance and use of special bonds of local governments, and moderately advance infrastructure investment.
◎ according to the data of the central bank, in December 2021, the central bank carried out medium-term lending facilities for financial institutions, totaling 500 billion yuan, with a term of one year and an interest rate of 2.95%. The balance of medium-term loan facilities at the end of the period was 4550 billion yuan.
◎ the State Council office printed and distributed the overall plan for the pilot of comprehensive reform of market-oriented allocation of factors, which allows the change of the purpose of the stock collective construction land according to the plan to be traded in the market on the premise of voluntary compensation according to law. By 2023, strive to achieve important breakthroughs in the key links of market-oriented allocation of factors such as land, labor, capital and technology.
◎ on January 1, 2022, RCEP came into force, and 10 countries, including China, officially began to fulfill their obligations, marking the start of the world’s largest free trade area and a good start for China’s economy. Among them, China and Japan established bilateral free trade relations for the first time, reached bilateral tariff concession arrangements, and achieved a historic breakthrough.
◎ CITIC Securities made ten prospects for the steady growth policy, saying that the first half of 2022 will be the window period for interest rate reduction. It is expected that the short, medium and long-term financing interest rates will be reduced. The 7-day reverse repurchase interest rate, 1-year MLF interest rate, 1-year and 5-year LPR interest rate will be reduced by 5 BP at the same time, to 2.15% / 2.90% / 3.75% / 4.60% respectively, effectively reducing the financing cost of the real economy.
◎ looking forward to economic development in 2022, chief economists of 37 domestic institutions generally believe that there are three main driving forces for promoting economic growth: first, investment in infrastructure construction is expected to rebound; Second, manufacturing investment is expected to continue to increase; Third, consumption is expected to continue to pick up.
◎ China’s economic outlook report for 2022 recently released by a number of foreign-funded institutions believes that China’s consumption will gradually recover and exports will remain resilient. In the context of optimistic about China’s economy, foreign-funded institutions continue to layout RMB assets, believe that China’s continuous opening-up can continue to attract foreign capital inflows, and there are investment opportunities in China’s stock market.
◎ ADP employment in the United States increased by 807000 in December, the largest increase since May 2021. It is estimated to increase by 400000, compared with the previous value of 534000. Earlier, the number of resignations in the United States reached a record 4.5 million in November.
◎ in December 2021, the US ism manufacturing PMI fell to 58.7, the lowest since January last year, and lower than economists’ expectations, with the previous value of 61.1. Sub indicators show that demand is stable, but delivery time and price indicators are lower.
◎ according to the data of the U.S. Department of labor, in November 2021, the number of resignations in the United States reached a record 4.5 million, and the number of job vacancies decreased from 11.1 million revised in October to 10.6 million, which is still much higher than the value before the epidemic.
◎ on January 4 local time, the Polish monetary policy committee announced its decision to increase the main interest rate of the Central Bank of Poland by 50 basis points to 2.25%, which will take effect on January 5. This is the fourth interest rate increase in Poland in four months, and the Polish central bank has become the first national bank to announce an interest rate increase in 2022.
◎ German Federal Bureau of Statistics: the annual inflation rate in Germany in 2021 rose to 3.1%, reaching the highest level since 1993
2、 Data tracking
（1） Capital side
（2） Industry data
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3、 Overview of financial markets
In terms of commodity futures, the prices of major commodity futures rose in that week, of which crude oil rose the highest, reaching 4.62%. In terms of global stock markets, both China’s stock market and US stocks fell, with the gem index falling the most, reaching 6.8%. In the foreign exchange market, the US dollar index closed at 95.75, down 0.25%.
4、 Key data for next week
（1） China will release December PPI and CPI data
Time: Wednesday (1 / 12)
Comments: according to the work arrangement of the National Bureau of statistics, the CPI and PPI data of December 2021 will be released on January 12. Experts predict that due to the influence of the base and the effect of the domestic policy of ensuring supply and stabilizing price, the year-on-year growth rate of CPI may drop slightly to about 2% in December 2021, the year-on-year growth rate of PPI may drop slightly to 11%, and the annual GDP growth rate is expected to exceed 8%. In addition, GDP growth in the first quarter of 2022 is expected to reach more than 5.3%.
（2） List of key data next week
Post time: Jan-10-2022