Daily Macro Economy News on May 5

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Domestic News

1、China’s Caixin Manufacturing PMI for April was 49.5, 0.5 percentage points lower than the previous value, contracting again after two months

2、MIIT data shows that in the first quarter, the value added of the electronic information manufacturing industry above the scale fell 1.1% year-on-year, and the rate of decline narrowed by 1.5 percentage points compared with January to February

3、On May 4, Rural Green Paper: Analysis and Forecast of China's Rural Economic Situation (2022~2023) was issued

4、NDRC organized the "Fourteenth Five-Year Plan" mid-term evaluation of the implementation of the Southwest Region panel

International News

1、ECB raises interest rates by 25 basis points as expected, reached the highest level since October 2008

2、The U.S. banking crisis continues to fester as several regional banks shares plunge

3、Federal and state officials are assessing the possibility of "market manipulation" behind the sharp swings in bank stocks recently

4、Bank of Canada Governor Tiff Macklem: renewed stress in the financial system may change the interest rate paths, and reducing inflation from 3% to 2% may be more difficult.

Domestic News

1、China’s Caixin Manufacturing PMI for April was 49.5, 0.5 percentage points lower than the previous value, contracting again after two months

China’s Caixin Manufacturing PMI for April was 49.5, 0.5 percentage points lower than the previous value, contracting again after two months. Due to the release of pent-up demand during the epidemic and the impact of the high base brought by the previous rapid recovery, China's manufacturing shows a contraction in April compare with last April.

2、MIIT data shows that in the first quarter, the value added of the electronic information manufacturing industry above the scale fell 1.1% year-on-year, and the rate of decline narrowed by 1.5 percentage points compared with January to February

The Ministry of Industry and Information Technology (MIIT) data shows that in the first quarter, the value added of the electronic information manufacturing industry above the scale fell 1.1% year-on-year, the rate of decline narrowed by 1.5 percentage points compared with January to February, the growth rate of 4.1 and 2 percentage points lower than the same period of industrial and high-tech manufacturing industry respectively. In March, the value added to the electronic information manufacturing industry above the scale increased by 1.2% year-on-year. The main products in the first quarter, were cell phone production of 331 million units, down 7% month-on-month, including smartphone production 239 million units, down 13.8% month-on-month; microcomputer equipment production of 79 million units, down 22.5% month-on-month; integrated circuit production of 72.20 billion blocks, down 14.8% month-on-month.

3、On May 4, Rural Green Paper: Analysis and Forecast of China's Rural Economic Situation (2022~2023) was issued

On May 4, Rural Green Paper: Analysis and Forecast of China's Rural Economic Situation (2022~2023) was issued. The Green Paper predicts, in 2023, the added value of China's primary industry will exceed 9 trillion yuan, an increase of 4%; the total grain production will exceed 690 million tons, of which corn production will reach about 290 million tons and soybean production will exceed 21 million tons. The structure of food production will be further optimized, the import of major agricultural products will show growth, and the overall fluctuation of agricultural products and food prices is generally limited, but structural fluctuations and fluctuations in the short-term trend will keep continuing. With the gradual recovery of China's economy, it is expected that the per capita wage income of rural residents will increase by about 1,000 yuan to about 9,500 yuan in 2023; the per capita net business income of rural residents will increase by about 500 yuan to about 7,500 yuan.

4、NDRC organized the "Fourteenth Five-Year Plan" mid-term evaluation of the implementation of the Southwest Region panel

The National Development and Reform Commission organized the "14th Five-Year Plan" mid-term evaluation of the implementation of the Southwest Region panel requires that all localities should do solid and orderly jobs of "14th Five-Year Plan" mid-term evaluation of the implementation of work, and take mid-term evaluation as a means to promote the implementation of the plan, to ensure that the objectives and tasks of the plan were successfully completed.

International News

1、ECB raises interest rates by 25 basis points as expected, reached the highest level since October 2008

The ECB reiterated that it will adjust interest rate policy based on economic data and based on the inflation outlook, and is expected to stop reinvesting in its asset purchase program in July. ECB President Christine Lagarde made it clear that there will be no pause in rate hikes, stressing that there are still significant upside risks to the inflation outlook. And some ECB policymakers are expected to raise interest rates 2-3 times in the future, sources said.

2、The U.S. banking crisis continues to fester as several regional banks’ shares plunge

PacWest Bancorp says it is in talks with potential investors about strategic options, including sales and financing. The Financial Times reported that Western Alliance Bancorporation (WAL) was considering options including sales (of assets), but the bank later denied it. On the other hand, TD Bank terminated its merger agreement with First Horizon Corporation.

3、Federal and state officials are assessing the possibility of "market manipulation" behind the sharp swings in bank stocks recently

U.S. federal and state officials are assessing the possibility of "market manipulation" behind the sharp swings in bank stocks recently, and the White House has said it will monitor “the short-selling pressure on healthy banks”. Bank stocks in the U.S. region have fallen sharply this week, for example, the PacWest Bancorp has fallen nearly 70 percent. According to data from an analyst firm Ortex, short-sellers made $378.9 million in profits by shorting certain regional banks on Thursday alone.

4、Bank of Canada Governor Tiff Macklem: renewed stress in the financial system may change the interest rate paths, and reducing inflation from 3% to 2% may be more difficult

Bank of Canada Governor McCollum: renewed stress in the financial system may change the interest rate paths, and reducing inflation from 3% to 2% may be more difficult. The Bank of Canada has "a range of tools" to ease financial stress, it is prepared to continue to raise interest rates if inflation does not slow. Despite the continued moderate economic growth, inflation is expected to further decline to about 3% this summer. McCollum also indicates that they have to consider if financial pressures lead to more tightening than expected and persisting when setting the interest rates.

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