Market Review
Key News
Chinese Market
1. Retail and catering businesses saw a 9% year-over-year increase in sales during the Mid-Autumn Festival and National Day holidays
According to data from the Ministry of Commerce, during the 2023 Mid-Autumn Festival and National Day holidays, the national consumer market was vibrant and dynamic, with steady and rapid sales growth. Sales of green, healthy, and intelligent products increased significantly, while consumption of personalized and experiential services continued to rise. The market for daily necessities was well-supplied, and prices were generally stable. The Ministry’s big data monitoring indicated that in the seven days leading up to the holiday period, sales of key retail and catering businesses nationwide increased by 9% year-over-year.
2. China accounts for 65% of the global new energy vehicle share in August
Cui Dongshu, Secretary-General of the Passenger Car Association, stated that the global new energy vehicle market has been stable in 2023, with sales of new energy passenger vehicles reaching 8.23 million units from January to August. Due to high base figures and the gradual phasing out of subsidies in various countries, the market trend for new energy passenger vehicles remained strong in 2023, reaching 1.22 million units in August, a 35% increase year-over-year. From January to August 2023, China’s share of the global new energy market was 61%, with its share reaching 65% in August.
3. Goldman Sachs reports strong Chinese demand for certain commodities
Driven by the new energy industry and transportation recovery, China's demand for major commodities is rapidly rebounding. Recently, Goldman Sachs reported that China's demand for many major commodities has actually been growing at a "strong pace". Demand for copper increased by 8% year-over-year, and demand for iron ore and oil increased by 7% and 6%, respectively. Data compiled by Goldman Sachs showed that in July, China's new energy industry's demand for copper increased by 71% year-over-year.
Overseas Markets
1. US non-farm payrolls in September show the largest increase since the beginning of the year
Data released by the US Bureau of Labor Statistics showed that US non-farm employment rose by 336,000 in September, marking the largest increase since the beginning of the year (see figure below). However, average hourly earnings in September rose by 4.2% year-over-year, recording the smallest annual gain since mid-2021. Following the data release, traders in the federal funds futures market raised the likelihood of a Fed rate hike by the end of the year to around 44%, while swap prices indicate that the financial market has pushed back the timing of a Fed rate cut from July to September next year.
2. Media reports OPEC has raised its long-term outlook for oil demand
Sources reported that OPEC has raised its medium to long-term outlook for oil demand in an upcoming report. Meanwhile, Saudi Arabia has informed the White House about its intentions to increase oil production to facilitate an agreement with Israel. However, Saudi Arabia’s actions regarding oil production will depend on market conditions. If oil prices are high, Saudi Arabia is willing to act in early 2024.
3. Russian government announces the lifting of diesel export bans
The Russian government has stated that it has lifted the ban on exporting diesel through port pipelines, removing most restrictions implemented on September 21, although restrictions on gasoline exports remain. Diesel accounts for the largest proportion of Russia’s oil product exports, with last year’s exports totaling about 35 million tons, nearly three-quarters of which were exported via pipelines.
4. The Bank of Japan may consider tweaking YCC and forward guidance this month
Kazuo Ueda, an economist at Mizuho Research & Technologies and former member of the Bank of Japan's board, suggested that the Bank of Japan's policy board might discuss adjustments to its forward guidance and yield curve control policy (YCC) later this month. Given the recent rise in yields, the depreciation of the yen, and inflation remaining stronger than expected, the Bank of Japan might take similar actions again, although this is not his base forecast scenario.
