Market Review
Key News
Chinese Market
1. Ministry of Natural Resources Proposes Removing Land Price Ceiling and Restrictions on Floor Area Ratio in Suburban Areas
The Ministry of Natural Resources issued documents to the natural resources departments of provinces and cities, suggesting the removal of land price limits in land auctions and the floor area ratio restrictions in suburban areas. Cities such as Jinan, Nanjing, Hefei, Ningbo, Suzhou, Chengdu, and Xi'an have implemented the removal of the land price ceiling. Most cities will omit the maximum land price and other contents in the next batch of land transfer documents. Core cities like Beijing and Shanghai are still studying how to adjust the bidding rules.
2. Allowing Foreign Non-Financial Institutions to Invest in Financial Asset Management Companies
To strengthen the supervision of non-banking financial institutions, prudently advance the work of opening-up, continuously deepen the reform of "delegating power, improving regulation, and upgrading services", and ensure effective linkage between administrative licensing and the regulatory system, the Financial Regulatory Authority has revised and issued "Measures for the Implementation of Administrative Licensing Matters for Non-banking Financial Institutions". The main revisions include adjusting the access conditions for some matters, continuing to expand opening-up, and advancing the work of streamlining administration and delegating power.
3. Institutions like Goldman Sachs Increase Holdings in A-shares in the Third Quarter
As listed companies gradually disclose their third-quarter reports, new signs of changes in QFII and RQFII quarterly holdings emerge. Notably, some foreign institutions that had previously been bearish on A-shares did not forsake investment opportunities in them during the third quarter. Instead, they increased their holdings or entered new positions, with institutions such as Morgan Stanley, Goldman Sachs, and ADIA adding to their total shareholdings in the past month.
Overseas Markets
1. Iranian Foreign Minister Says All Options are Conceivable
Iranian Foreign Minister Hossein Amir-Abdollahian stated that Iran's involvement in the conflict between Israel and Palestine is "conceivable". Amir-Abdollahian mentioned that Iran does not support the expansion of the conflict, but if Israel "continues to commit war crimes", other fronts in the conflict region "will open". Meanwhile, Fitch has placed Israel's long-term foreign-currency issuer default rating of A+ on negative watch, indicating increased risk of conflict expansion, potentially including large-scale military confrontation with actors such as Iran.
2. Continuous Strong Consumer Demand in the US
US retail sales in September increased by 0.7% month-over-month, slightly decelerating from August's revised increase of 0.8% but significantly surpassing the market expectation of 0.3%, marking six consecutive months of growth. With the US CPI rebounding for the third consecutive month in September and continuous strong consumer demand, the Federal Reserve may raise interest rates again before the end of the year.
3. Unexpectedly Strong Retail Sales Fuel Expectations for Federal Reserve Rate Hike
Unexpectedly strong US retail sales data have added fuel to the fire of expectations for a Federal Reserve interest rate hike, driving up market expectations that the Fed will continue to raise rates in the future. The price of swap contracts on Tuesday reflects that investors currently expect, after keeping the rate unchanged in November, the probability of the Federal Reserve raising rates in January next year has risen to over 60%, with a possibility of a rate hike in December this year, though less likely than in January. The sensitive two-year US Treasury yield nearly reached 5.24% during midday trading, a high not seen since July 2006.
4. Reports Say Bank of Japan Considers Raising Inflation Forecasts for This Year and Next
Sources indicate that the Bank of Japan may discuss raising inflation forecasts for the fiscal years 2023 and 2024 at this month's policy meeting, thereby extending the period during which it expects inflation to reach or exceed the 2% target. Officials at the Bank of Japan expect that inflation forecasts, starting from the current fiscal year in April, could be raised from 2.5% to close to 3%, indicating that the bank sees the inflation rate reaching or exceeding 2% for three consecutive years.
Focus for Today
Today, investors should pay attention to China's industrial production above a designated size, third-quarter GDP, total retail sales of consumer goods, the UK's CPI and core CPI, the Eurozone's harmonized CPI and core CPI, US new housing starts and building permits, EIA crude oil inventories, and other economic data. In addition, investors should also keep an eye on the Israel-Palestine situation, the National Information Office's press conference on national economic operation, and US President Biden's visit to Israel among other risk events.
