Ren Zeping: PPI Deflation To Improve CPI Inflation Moderate

A small callback, but still on the ups and downs, new orders fell to 51, but in nearly 18 months high level, commercial housing, especially second-line sales of land acquisition increased significantly, the 1 quarter policy stimulus to the economic pulse will continue to the end of the 2 quarter of the first quarter of -3, but the first tier housing market sales callbacks, bond defaults, hundreds of billions of new debt cancellation, the construction industry order reduction, goods wait and see, and so on, for the economic rebound shadow, short-term W type, long-term L type.

The US Federal Reserve has temporarily increased interest rates, the US dollar index has dropped sharply, and gold has risen substantially.

At the FOMC meeting of the US Federal Reserve in April, the interest rate remained unchanged at 0.25%-0.5%. The US dollar index dropped to 93.05,10 during the period of 93.05,10. The US bond yield dropped to 1.83%. Gold and silver prices rose sharply, and crude oil, copper, aluminum, soybeans and corn increased and the price of steel and iron ore shook.

The Bank of Japan unexpectedly maintained monetary policy unchanged, the yen rose and Japanese stocks fell sharply.

In April, the PMI index of manufacturing in Europe and Japan slowed to 51.5, and in the 48,1 quarter, the US GDP rose to 1.95% and 0.5% respectively.

Domestic economy: PMI is slightly callback but still on the line of ups and downs. In the 1 quarter, the pulse of policy stimulus will continue to the end of the 2 quarter, the beginning of the -3 quarter, the short-term W type and the long-term L type.

In April, the manufacturing industry PMI50.1 was expected to be 50.3, with a value of 50.2.

The new order dropped to 51, but it is at a high level of nearly 18 months. It may be related to the concentration of credit, investment and order in March.

In April, the construction activity index rose sharply to 59.4, indicating that investment continued to improve.

On 1-29 April, 30 commercial housing pactions in large and medium-sized cities increased by 61% compared with the previous 3 weeks. The land purchase was 30.3%, indicating that real estate investment continued to improve.

The stock index of raw materials and finished products decreased by two times, indicating that the recovery of the small economic cycle was mainly driven by the steady growth of the government and real estate, and the contribution of enterprises to replenishment was not large.

The first quarter housing market sales callbacks, bond defaults, hundreds of billions of new debt cancellation, and construction industry orders fall to a shadow over the economic recovery. The 1 quarter policy stimulus will continue the pulse of the economy to the end of the 2 quarter of the -3 quarter and maintain the short-term W and long-term L judgement.

It is worth noting that this short-term economic stimulus has increased the difficulties and hidden worries of the long-term supply side reform, the revival of inefficient production capacity, the rise of leverage, the inflation expectation and the rise in house prices, which have led to the rising cost of enterprises.

Currency:

Interest rates have fallen, yields on treasury bonds have declined slightly, credit spreads have risen, the RMB exchange rate has risen sharply, and prices have risen moderately.

In April 29th, the 1 and 7 days of interbank repurchase weighted interest rates were 2.10% and 2.52%, down 4 and 16 BP compared with last week, and the pressure on inter bank market funds was eased.

The Politburo meeting put forward "pay attention to price changes, ensure effective supply, and actively and steadily push forward the price reform".

Policy: the Politburo meeting put forward "to maintain healthy development of the stock market".

In April 29th, the Political Bureau meeting put forward "to maintain the healthy development of the stock market, give full play to the regulatory role of the market mechanism, strengthen the construction of the basic system, strengthen market supervision, and protect the rights and interests of investors."

Securities and Futures Commission issued revised Securities

Measures for the management of the protection fund.

In May 1st, the central government added 55 yuan to the value added tax in the 2-3 year pitional period. The "tax to increase" will reduce the annual tax rate by about 500 billion. The tax burden of real estate, construction industry and life service industry will be significantly reduced, and there will be uncertainty in the financial industry.

Market: stock market shocks bottom up structural market, bond market rest, housing market differentiation, dollar stage peaked, bulk rebound, super match gold.

In January 4th, we set the tone for the economy, policy and market in 2016, "economic L, reform is political economy, market recovery".

With the real estate investment bottoming up, the 1 quarter of the L bottom of the economy appeared.

In the political and economic cycle, the environment is dominated by stability.

After 2014-2015 years of stock debt, the best strategy for judging the general situation in 2016 is to recuperate.

In January 4th, we hint that the A shares fell by a thousand points after the "recuperation", and the bond market subsequently adjusted.

After the crash, we judged in the early stage that in the 3-5 month, in the context of economic recovery, PPI rise, corporate earnings improvement and policy friendliness, the bottom of the market turbulence was the time window for making the structural market and the band. Due to the risk appetite and market confidence recovery need process, investors were sensitive to positive passivation and bad profits.

The bond market is cautious in terms of economic recovery, inflation expectations, credit default, deleveraging and commodity wait-and-see.

Considering that the weak recovery of the US economy does not support high-frequency interest rate increase, general election cycle and Yellen pigeon pie, it has maintained the Fed's 1 interest rate increase in 16 years and the US dollar stage peaked.