No 888 - A glimmer of hope into an expectation

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　　BANDSFinancial

　　磐石金融有限公司（ BANDS Financial Limited ）在香港注册成立，是一家持有香港证监会（SFC）2号牌照的期货经纪公司，业务涉及中国以外全球大部分活跃期货及期权市场。

　　I should perhaps compare Chinas inflation rate, the data of which was released yesterday (actual 2.1% previous 1.5% expected 1.8%) with that of the US which was released later in the day (actual 8.3% previous 8.5% expected 8.1%) However, the true comparison is not what the comparative rates are, but what their relevant authorities want them to be. China has set a target of CPI at around 3% for this year, the same as in 2021, so Chinese inflation is arguably undershooting its target. In the US on the other hand, well, around 2.5% is considered neither too hot or too cold, and the current print is far from what is required.

　　Premier Li presided over an executive meeting of the State Council yesterday moving the dial to “require fiscal and monetary policies to be oriented towards employment priorities, to stabilize the overall economic market; to deploy to further revitalize existing assets, broaden social investment channels and expand effective investment.” Specifically, the meeting pointed out, “that due to the new round of the epidemic and the unexpected changes in the international situation, new downward pressures on the economy had increased in April.” The meeting proposed several initiatives. Fiscal and monetary policies should be based on employment priority. To ensure price stability, particularly in agriculture. To unblock logistics, especially in key areas, and maintain the stability of the industrial supply chain. To ensure the stable supply of energy, and to provide a housing provident fund policy to support companies that are currently in difficulty.

　　The official readout of the meeting did not mention zero-covid and some western media have speculated if this represents a divergence of thinking among Beijing policymakers, whereas others suggest this is just two sides of the same coin, trying to deliver a solution to a complex problem.

　　In a sense it doesnt matter, as for a confirmed data junkie such as myself I will be mainlining the New Loans, Outstanding Loan Growth and Total Social Financing data that is due out at some point today, perhaps these could be so bad, that they will prompt PBOC RRR cut support. In addition to that, this morning as in every morning I and many others will parse the nuances of the Shanghai infection data, trying to turn a glimmer of hope into an expectation.

　　Have a good dayRegards John