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Today's Market Focus: U.S. Inflation Pressure Remains High

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TraderKnows
05-15

The central bank renews 591 billion yuan in MLF, August's economic data shows marginal improvement, and the securities regulator confirms no IPO 'shutdown' situation.

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China Market

1. The People's Bank of China continues with 591 billion yuan in MLF

The People's Bank of China carried out 591 billion yuan in one-year MLF and 105 billion yuan in seven-day reverse repo operations, both interest rates remained unchanged from the previous values. Additionally, the central bank conducted 34 billion yuan in 14-day reverse repo operations, with the winning interest rate at 1.95%, adjusted down by 20Bp from the previous value. This year, the MLF interest rate has been cut twice, in June and August by 10Bp and 15Bp respectively, totaling a decrease of 25Bp.

2. China's August economic data shows marginal improvement

China's August key data, including total retail sales of consumer goods, industrial output above a designated size, national real estate development investment, urban surveyed unemployment rate, and fixed asset investment from January to August, showed marginal improvements, underpinned by a series of policies to stabilize growth. This aligns with previous PMI, price, import-export, and financial data.

3. The CSRC states that there is no "shutdown" in IPOs

A responsible person from the CSRC departments stated that the recent temporary tightening of the IPO pace is an arrangement to maintain stable market operations. The CSRC and stock exchanges’ IPO acceptance, review, and registration processes have not been suspended, and there is no "shutdown" in IPOs. Nor is there a "shutdown" for listed companies' refinancing. Moreover, the positioning, issuance, and listing conditions, and information disclosure requirements of various sectors remain unchanged; there are no circumstances where listing thresholds have been raised.

4. China invents new rare earth mining technology

Chinese scientists have successfully developed a new electric-drive mining technology for weathered crust elution-deposited rare earth ores, increasing the recovery rate of rare earth by about 30%, reducing impurity content by about 70%, and shortening mining time by about 70%. Related achievements have been published in 11 high-level papers in journals including Nature Sustainability, have received 7 authorized invention patents, and a demonstration project with a scale of 5000 cubic meters has been built.

Overseas Market

1. The US auto industry strike affects 9% of North American car production capacity

The United Auto Workers (UAW) initiated a strike against Detroit's "Big Three" automakers on Friday, September 15th local time. This is the UAW's first simultaneous strike against the three major US car companies and one of the most vigorous strike waves in the US in recent years. The three major car factories believe the strike is unnecessary, with General Motors stating it has offered the best conditions in 115 years to its workers, while Ford has started temporary layoffs due to supply chain disruptions.

2. The release of key US economic data in September, including employment and inflation, may be delayed

Due to the impending US federal government shutdown, a series of important US economic data releases may be delayed. According to past practices during government shutdowns, key economic data for September, such as the Department of Labor's monthly employment statistics and the Department of Commerce's key inflation indicators, will not be released on the scheduled dates in October. During the 2013 US federal government shutdown, the release of employment data was also delayed.

3. US inflation pressure remains high

According to the latest data from the American Automobile Association (AAA), the current average price of regular gasoline in the US is 3.866 dollars per gallon, setting a record high for the end of summer. Gasoline prices have risen by 7.8% in just eight weeks, a rare rebound for end-of-summer gas prices. Gasoline costs accounted for more than half of the rise in the consumer price index in August. If gasoline prices continue to rise, there’s concern inflation could further intensify, weakening consumer confidence.

4. Bank of Japan officials say Kazuo Ueda's remarks were misinterpreted

Bank of Japan officials believe that remarks made by Bank of Japan Governor Kazuo Ueda in a recent interview were misinterpreted. Last Saturday, Ueda suggested in his first solo media interview since taking office that if the Bank of Japan is confident in the continuous rise in prices and wages, ending negative interest rates could be one of the feasible options. This seemed to signal to the market the possibility of "ending negative interest rates."

Today's Focus

Today, with no significant economic data releases, investors need only pay attention to a speech by the Vice President of the European Central Bank, Luis de Guindos. Additionally, the Tokyo Stock Exchange will be closed for a day due to Respect for the Aged Day.

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Risk Warning and Disclaimer

The market carries risks, and investment should be cautious. This article does not constitute personal investment advice and has not taken into account individual users' specific investment goals, financial situations, or needs. Users should consider whether any opinions, viewpoints, or conclusions in this article are suitable for their particular circumstances. Investing based on this is at one's own responsibility.

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