Chen Hufei: Official PMI Or Approaching The Withered Line

HSBC China manufacturing PMI preview value in May was 49.1, 0.2 higher than last month's final value, but 0.1 lower than last month's preview value, and 49.3 lower than market expectations. Chen Hufei, a researcher at Bank of China information management, believes that official PMI, which is about to be released in June 1st, may be closer to the "50 line".

And Shenzhen Hong Kong Tong, mutual recognition between China and Hong Kong mutual funds, MSCI will be included in the A share expectations and SDR will be included in the RMB expectations will continue to boost blue chip heavyweights, this week strong cyclical financial, real estate and other sectors are likely to continue to rise steadily.

The following are its main points:

1, the industrial economic growth rate continued to slow down, May official

It is likely that the season will descend to 50.

In May, HSBC China manufacturing PMI preview value was 49.1, 0.2 higher than last month's final value, but 0.1 lower than last month's preview value, also lower than market forecast 49.3.

Among them, the output index is only 48.4, 1.6 lower than last month, a 13 month low, the first decline this year. The new export orders index also dropped sharply to 46.8, a 23 month low.

Judging from the sharp decline in output and the shrinking trend of the new order index in March, the growth rate of industrial economy in May is still very low, and no further slowdown is ruled out.

In view of the seasonal decline of manufacturing PMI in most years in May, it is estimated that the manufacturing industry PMI of the statistical bureau announced in June 1st may also be lower than the downlink, thus challenging the "50 withered line".

2.

It is likely that the package will be further consolidated.

On the 18 day, it announced the approval of 6 large-scale infrastructural projects, and on the 20 day, the NDRC also focused on three urban rail pit plans in Nanjing, Nanchang and Hohhot.

So far, within a short span of 3 days, a steady growth package of over 450 billion yuan has been approved.

At the same time, in order to support the financing of key areas and key projects, following the introduction of four types of special debt services such as pension in April, the NDRC's draft notice was explicitly requested, "appropriately improving the warning line for signs of regional economic and bond risks, and reducing the threshold of corporate bond issuance".

Under the background of continued financing of off balance sheet financing and a small increase in social financing scale, in order to promote steady and rapid economic development, local government debt will be replaced as soon as possible, and new debt financing will also accelerate.

3, monetary interest rate declines slowed, medium and long term bonds

Rebound on schedule.

Last week, money market interest rates remained at a relatively low level, and the decline began to slow down.

In contrast, yields on medium and long term bonds have rebounded to varying degrees.

Take state debt as an example. Last week, the 3 year maturity yield reached 8.22 BP, the 5 year maturity rate rose 13.09 BP, the 7 year national rate of return rose 8.35 BP, the 10 year period rose 9.62 BP to 3.97.

In the credit debt market, the yield of medium and high rated medium and long term corporate bonds and city investment bonds above AA+ also started to rise slightly.

It is expected that in the context of the intensive issuance of local government bonds and the acceleration of corporate bond financing, the currency space interest rate downside will be limited in the near future, and the medium and long-term yields in the bond market will probably pick up again.

4, the stock market risk appetite continues to improve, blue chip weight is expected to steadily rise.

Last week, Shanghai and Shenzhen two cities' risk appetite has been greatly boosted. Shen Wan's 27 sector industries have risen in an all-round way, of which 16 sectors have risen by more than 10%, and the growth rate of strong cyclical plates such as banks, nonferrous metals and non silver plates has exceeded 5%.

It is expected that China's stable growth policy will be further increased, the mutual recognition of mutual funds between China and Hong Kong, and the favorable policy of the year being expected to be included in the SDR currency basket.