November 13th Macroeconomic Index: China's Comprehensive Supervision for High-Quality Development, Local Debt Risks Mitigated, Record High Offline Exhibition at Canton Fair

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Domestic News

1. The State Council plans to organize and carry out the 2023 comprehensive supervision of the State Council to promote high-quality development in November

2. Financial and monetary policies were implemented together to resolve the risk of local debt, and the amount of special debt has sprinted to 1 trillion yuan

3. The scale of the offline exhibition has reached a record high! The second phase of the 134th Canton Fair opened on the 23rd

4. Ministry of Agriculture and Rural Affairs: It is expected that the overall grain purchase market this autumn will be stable

International News

1. An unexpected decline in inflation is unlikely to affect the Bank of Canada

2. The U.S. IPO market has just seen a glimmer of light, but it has been hit by internal and external risks

3. The yen fell below 150 against the dollar again, and the risk of Japanese intervention rose

4. Foreign Minister of South Africa: Transactions among BRICS member countries should use currencies other than the US dollar

Domestic News

1. The State Council plans to organize and carry out the 2023 comprehensive supervision of the State Council to promote high-quality development in November

The State Council plans to organize and carry out the 2023 comprehensive supervision of the State Council to promote high-quality development in November, and conduct on-site inspections of 16 provinces (autonomous regions and municipalities) including Beijing, Tianjin, Hebei, Inner Mongolia, Jilin, Heilongjiang, Shanghai, Anhui, Jiangxi, Hunan, Guangxi, Hainan, Chongqing, Yunnan, Gansu, and Ningxia and relevant departments of the State Council. In order to improve the quality and efficiency of supervision and reduce the burden on the grassroots, the General Office of the State Council will collect the following clues from the society from now on: First, the clues that hinder the development and growth of the private economy. Second, the clues to the problems that hinder the construction of a unified national market. The third is the clues to the problems that affect the expansion of domestic demand. Fourth, the clues to the problems that affect the comprehensive promotion of rural revitalization. Fifth, there are clues to the problems in ensuring and improving people's livelihood.

2. Financial and monetary policies were implemented together to resolve the risk of local debt, and the amount of special debt has sprinted to 1 trillion yuan

In order to prevent the risk of local government debt and implement a package of debt reduction plans, financial and monetary policies were implemented together to reduce debt. Many provinces have actively sought the Ministry of Finance's implicit debt risk mitigation pilot and obtained special refinancing bond quotas to replace the implicit debt for which the government is responsible for repayment, so as to achieve an extension of interest rate cuts and mitigate risks. In October, local governments issued bonds intensively. According to the data of China Bond Information Network, as of October 27, a total of 22 provinces will issue a total of about 943.8 billion yuan of special refinancing bonds. Luo Zhiheng, chief economist of Yuekai Securities, said that the fast issuance speed and large scale insurance have become a highlight of this round of special bond issuance. Special debts can be used to replace implicit debts, and will be used to resolve implicit debts in conjunction with other methods such as debt extensions. The special bonds mainly use the general debt balance limit, and the issuance scale of special bond in the fourth quarter is expected to be about 1 trillion yuan, mainly concentrated in high-risk provinces.

3. The scale of the offline exhibition has reached a record high! The second phase of the 134th Canton Fair opened on the 23rd

On October 23, the second phase of the 134th Canton Fair was officially launched, focusing on the three major sectors of household goods, gifts and decorations, building materials and furniture and 15 exhibition areas, with 9,674 offline exhibitors, including 202 exhibitors from 29 countries and regions in the import exhibition. It is reported that the scale of the second phase of the 134th Canton Fair has hit a record high, with a total exhibition area of 515,000 square meters, 24,551 booths, 9,674 exhibitors, and about 1,178,900 exhibits uploaded to the online exhibition.

4. Ministry of Agriculture and Rural Affairs: It is expected that the overall grain purchase market this autumn will be stable

Liu Han, the head of the Department of Market and Information Technology of the Ministry of Agriculture and Rural Affairs, said that at present, the autumn grain has been harvested and flew into market, and gradually entered the peak season of purchase and sales. According to the dispatch of the State Food and Material Reserves Administration, the purchase volume of the autumn grain of the peak season was expected to be about 200 million tons, which would remain at a high level. Considering the perennial market operation law and the domestic and foreign supply and demand situation, it was expected that this year's autumn grain purchase market would be mainly stable, among which, the quality of medium and late phase rice was better than that of the perennial, the market grain supply was sufficient, the overall price was expected to stabilize above the minimum purchase price, and the characteristics of high quality and high price were more obvious. Corn production increased a lot, but consumption was at a high level, there was still a certain gap between production and demand, and price was unlikely fall sharply.

International News

1. An unexpected decline in inflation is unlikely to affect the Bank of Canada

Some analysts said that the unexpected decline in overall inflation in Canada in September was not enough to affect the Bank of Canada's stance of maintaining higher interest rates for longer. While the lagged effects of monetary policy were evident in the report, such as the fall in prices in some of the more interest-rate sensitive spending categories, the acceleration in hiring and rising real wage growth in September presented the Bank of Canada with upside risks to inflation that cannot be ignored.

2. The U.S. IPO market has just seen a glimmer of light, but it has been hit by internal and external risks  

The Israeli-Palestinian conflict, surging Treasury yields and volatile new offerings other risks are expected to exacerbate an already sluggish U.S. issuance and trading activity this quarter, exacerbating market volatility and reducing investors' risk tolerance. Since the beginning of last year, IPO activity on U.S. Exchanges has raised only $47.6 billion, which is not as large as the total issuance in the last two months of 2021, the data showed. David DiPietro, head of private equity at Rowe Price, said: “We don’t expect a lot of IPO activities before the end of the year.” Conor Moore, Business director of Private Enterprise KPMG, said: “By talking to clients and others in the ecosystem, the window could open in mid-to-late March.”

3. The yen fell below 150 against the dollar again, and the risk of Japanese intervention rose

The large yield gap between Japan and the US continues to weigh on the yen, with the yen briefly falling below 150 against the dollar again in early trading on Monday amid fears that the Tokyo authorities could step in and intervene. The yen fell to 150.11 against the dollar in early Asian trading on Monday, before rebounding quickly in options-related USD selling. Currently, the Japanese yen is trading at 149.86 against the dollar, little changed from late Friday.

4. Foreign Minister of South Africa: Transactions among BRICS member countries should use currencies other than the US dollar

According to Iran's official news agency IRNA, on the 22nd local time, Foreign Minister of South African Pandor visited Tehran, the capital of Iran, and held talks with Iranian Foreign Minister Abdollahian and others. After the talks, the two sides held a joint press conference, and Pandor said that the relationship between South Africa and Iran is not only bilateral, the two countries are also partners in the BRICS cooperation mechanism, and South Africa and Iran have good space for cooperation in the field of energy. At the same time, Pandor said that unilateral sanctions and other sanctions will affect business activities, and transactions among BRICS member countries should be carried out in currencies other than the US dollar.

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