Market Review
Key Highlights
Chinese Market
1. China Securities Regulatory Commission: It's the Right Time for Medium- and Long-term Funds to Accelerate Equity Investments
At a symposium with principals from the National Social Security Fund Council and some major banking and insurance institutions, the China Securities Regulatory Commission stated that investment and financing are the most fundamental and important functions of the capital market. Various types of medium- and long-term funds, including pension funds, insurance funds, and bank wealth management funds, mutually promote and develop in coordination with the capital market. Against the backdrop of domestic economic transformation and upgrading, deepening financial market reforms, and the lowering of long-term interest rate centers, it is timely for pension, insurance, and bank wealth management funds to accelerate the development of equity investments.
2. Changsha's Record-high Housing Prices Signal Positive Signals
The residential and commercial land plot in Changsha, listed on the online trading system of Changsha's Land Resources, number [2023]Changsha City 041, saw its price increase by 4,200 Yuan per square meter over the previous ceiling price of 14,800 Yuan per square meter, an increase of more than 28%. Market participants indicated that at a time of sluggish real estate market, the local government's release of policy signals boosts market confidence, which helps to stabilize expectations in the real estate market.
3. General Administration of Customs: Full Suspension of Imported Japanese Aquatic Products
To comprehensively prevent the risk of radioactive contamination to food safety caused by the discharge of nuclear-contaminated water from Fukushima, Japan, and protect the health of Chinese consumers and ensure the safety of imported food, the General Administration of Customs has decided to take emergency measures to suspend the importation of aquatic products originating from Japan (including edible aquatic animals) starting from August 24, 2023 (inclusive).
Overseas Markets
1. Former “Hawk” of the Federal Reserve Supports Further Rate Hikes
James Bullard, a well-known hawkish figure within the Federal Reserve and former President of the St. Louis Federal Reserve, stated that the rebound in U.S. economic activity this summer and the potential reacceleration of the economy could bring upward pressure on inflation, preventing the Federal Reserve from achieving its desired decline in inflation. If inflation remains high or rises again, the Fed may need to adopt higher rates than previously assessed.
2. U.S. Durable Goods Orders See Largest Drop Since the Pandemic
Data released by the U.S. Commerce Department shows a preliminary month-over-month decrease of 5.2% in durable goods orders in July, exceeding the expected 4% decrease and marking the largest decline since April 2020. Non-defense aircraft orders, after surging the previous month, plummeted by nearly 44%. Analysts say these figures highlight how high borrowing costs, stricter credit conditions, and persistent economic uncertainties are curbing businesses' appetite for long-term capital investments.
3. Turkey's Central Bank Implements Largest Rate Hike Since 2018
The Central Bank of Turkey's Monetary Policy Committee raised the benchmark interest rate from 17.5% to 25%, an increase of 750 basis points. This not only far exceeds the market's expectation of a 250 basis point hike but also marks the bank's largest single rate increase since 2018. Economists indicate that the Central Bank of Turkey's agreement to an unexpectedly large hike was well-prepared in advance, intended to convey a strong message of policy change from the new central bank governor.
4. WTO Says Global Trade Expected to Grow Moderately in the Third Quarter
The World Trade Organization (WTO) indicates that despite the pressure on global trade volume due to high commodity prices, tightening monetary conditions, and weak import demand, its cyclical goods barometer has risen from 95.6 in May to 99.1. This suggests that after two quarters of decline, global trade improved in the second quarter of this year and is expected to grow at a "moderate pace" in the third quarter.
