Today's Market Focus: Acceleration of China's Special Refinancing Bond Issuance


Rising Treasury yields may reduce the need for rate hikes. OPEC raised its oil outlook. Chevron closed a gas field in Israel, and clashes occurred on the Lebanon-Israel border.

Market Recap


Top News

China Market

1. Acceleration in the Issuance of Special Refinancing Bonds

Following Inner Mongolia's lead in debenture reduction, several other regions across the country have followed suit, accelerating the issuance of special refinancing bonds. Up to now, Inner Mongolia, Tianjin, Liaoning, Yunnan, Chongqing, and Guangxi have successively announced their plans to issue special refinancing bonds. The total scale amounts to 319.652 billion yuan, aimed at repaying existing debts. This round of debenture reduction sees signs of exceeding expectations, with the overall scale possibly surpassing 1.5 trillion yuan.

2. Action Plan for High-Quality Development of Computing Power Infrastructure Issued

The Ministry of Industry and Information Technology, the Cyberspace Administration of China, the Ministry of Education, the National Health Commission, the People's Bank of China, and the State-owned Assets Supervision and Administration Commission have recently jointly issued the "Action Plan for High-Quality Development of Computing Power Infrastructure," aiming by 2025 to exceed a computing power scale of 300 EFLOPS and achieve a 35% ratio of intelligent computing power, promoting balanced development of computing power across eastern and western regions.

Overseas Markets

1. Federal Reserve Official States Rising U.S. Treasury Yields May Reduce the Need for Rate Hikes

With the recent surge in what is considered the "anchor for global asset pricing," more senior officials at the Federal Reserve believe the substantial increase in U.S. Treasury yields, which tightens financial conditions, could obviate the need for further hikes in the benchmark interest rates. Lorie Logan, the president of the Dallas Federal Reserve, mentioned that the recent spike in long-term U.S. bond yields could imply a reduced necessity for further increases in the Fed's interest rates. Similarly, Federal Reserve Vice Chair Jefferson noted that the rise in bond yields, resulting in tighter financial conditions, will continue to be recognized when assessing future policy paths.

2. OPEC Raises Long-Term Oil Demand Outlook

Even as the world makes efforts to pivot to cleaner energy sources, OPEC believes that oil will remain a dependency for a lengthened period. In the 2023 World Oil Outlook, OPEC forecasts a 16% increase in global oil consumption over the next 20 years, reaching 116 million barrels per day by 2045, approximately 6 million barrels higher than earlier projections. OPEC attributes the anticipated growth in oil consumption to the demand in road transport, petrochemicals, and aviation, with Asian countries being the primary drivers of this increase.

3. Chevron Shuts Down Gas Field in Israel

With the arrival of winter, energy prices in Europe surge once again, this time not due to the conflict between Russia and Ukraine, but the Israel-Palestine conflict. Upon the request of the Israeli government, Chevron has shut down production at one of its natural gas fields in Israel, potentially reducing the supply in the Eastern Mediterranean area. Following attacks by Hamas over the weekend, the Israeli government requested Chevron to shut down production at the Tamar offshore gas platform due to security concerns.

4. Exchange of Fire at the Lebanon-Israel Border

According to reports by the Lebanese National News Agency, Israel has expanded its artillery fire into southern Lebanon, targeting the town of Aita AL-Shaab in the Bint Jbeil region of Nabatieh province. Furthermore, Israeli reconnaissance drones conducted intensive flights over southern Lebanon. Al Arabiya TV reports that due to Israel's destruction of a telecommunications building in the Gaza Strip belonging to Palestine, the entire network system in the Gaza Strip has been cut off.

Focus for Today

Today, investors should pay attention to China's social financing and M2 money supply, U.S. wholesale inventories, and other economic data. Additionally, investors should also keep an eye on the Israel-Palestine situation and a speech by Raphael Bostic, the president of the Atlanta Federal Reserve.

Economic Data

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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