Daily Macro Economy News on June 26
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International Crude Price Trend and Exchange Rate of RMB to USD Trend
Domestic News
1. High-end and high-quality production capacity is still insufficient, especially in the lithium industry
2. The current production and operation of micro subjects are in a depression and need to grasp the three quarters to increase macro policy efforts
3. State-owned Assets Supervision and Administration Commission: State-owned enterprise reform in the northeast region is expected to sign an investment of more than 500 billion yuan
4. Beijing, Tianjin and Hebei have experienced regional extreme high-temperature weather, high-temperature weather will strengthen again at the end of June
International News
1. ECB Vice President Luis de Guindos: ECB enters the final phase of interest rate hikes
2. Japan intends to issue a new version of banknotes in July next year, updating the design after nearly 20 years
3. TikTok e-commerce is expected to reach $15 billion in Southeast Asia of GMV this year, far exceeding last year's performance
4. Moody's adjusts baseline assumptions for Fed monetary policy
Domestic News
1. High-end and high-quality production capacity is still insufficient, especially in the lithium industry
China Energy News: It is expected that the main lithium battery materials capacity planning by 2025 has been all excess, total planning capacity of cathode materials by 2025 is equivalent to 5 times the projected demand, and lithium iron phosphate is 4 times. The industry said that the second half of the power battery field investment is expected to enter a "cooling period". But China's power battery shows more of a structural surplus, high-end and high-quality production capacity is still insufficient, especially in the lithium industry.
2. The current production and operation of micro subjects are in a depression and need to grasp the three quarters to increase macro policy efforts
China Macroeconomic Forum (CMF) 2023 Mid-term Forum of Renmin University of China was held in Beijing. Ning Jizhe, member of the Standing Committee of the 14th National Committee of the Chinese People's Political Consultative Conference (CPPCC) and deputy director of the Economic Committee, said at the forum that, first of all, we should fully affirm the fundamentals of China's economic continuation of the recovery trend, but the foundation of the current economic recovery is not yet solid. The macro indicators, although the overall stability, but the signal from micro subjects, production and operation difficulties are still relatively large, there are unstable market expectations and a lack of confidence in the market. At present, we need to increase macro policy efforts, the introduction of a number of policies to promote economic recovery. To grasp the rhythm of macro-control, it is important to seize the third quarter and ensure the timeliness and efficiency of the policy. (21 Finance)
3. State-owned Assets Supervision and Administration Commission: State-owned enterprise reform in the northeast region is expected to sign an investment of more than 500 billion yuan
The State-owned Assets Supervision and Administration Commission of the State Council today held a meeting in Shenyang Province to promote the reform of state-owned enterprises in the northeast region, and to deepen the state-owned enterprises reform. The three northeastern provinces and Inner Mongolia Autonomous Region will also hold a panel jointly for the first time with a large domestic enterprises symposium this afternoon, and held a project signing ceremony, the total investment is expected to exceed 500 billion yuan. (CCTV News)
4. Beijing, Tianjin and Hebei have experienced regional extreme high-temperature weather, high-temperature weather will strengthen again at the end of June
According to the Central Meteorological Observatory, since June, there have been two regional high-temperature weather processes in the Beijing-Tianjin-Hebei region, respectively on June 14th-18th and from 21th-24th, with an average of 9.5 days of high-temperature days in region. At present, during June 27th-30th, there will be another high-temperature weather process in the Beijing-Tianjin-Hebei region, and it is expected that the entire June high-temperature days in the Beijing-Tianjin-Hebei region is expected to break the record for the same period in 1972, which record 12.1 days.
International News
1. ECB Vice President Luis de Guindos: ECB enters the final phase of interest rate hikes
In an interview with Spanish ABC Newspaper, ECB Vice President Luis de Guindos said that the ECB is entering the "final phase" of the tightening cycle. When the ECB stops raising interest rates will depend on the data. "Changes in the core inflation rate are very important." Guindos also said in the interview that the monetary policy implemented by the ECB and the base effect "will help" to slow down core inflation. It is important to "watch the second-round effect, which is everything related to the evolution of wage growth and unit labor costs". If the second-round effect becomes complex, “the monetary policy will have to act more forcefully. Fiscal policy must also play a role in reducing inflation.
2. Japan intends to issue a new version of banknotes in July next year, updating the design after nearly 20 years
The front of the new 10,000 yen banknote features a portrait of industrialist Shibusawa Eiichi, who is known as the “father of Japanese capitalism”. The front of the new 5,000 yen and 1,000 yen banknotes feature the heads of Tsuda Umeko, an educator who strove to improve the status of women, and Kitazato Shibasaburo, a microbiologist who developed a tetanus treatment, respectively. The design on the back has also been updated, with the 10,000 yen banknote featuring the Tokyo Station building, and the 5,000 yen and 1,000 yen banknotes featuring the 36 scenes of Toyotake by Fujika and Katsushika Hokusai, respectively.
3. TikTok e-commerce is expected to reach $15 billion in Southeast Asia of GMV this year, far exceeding last year's performance
TikTok is aiming to drive revenue growth in Southeast Asia, including the massive Indonesian market, according to the Financial Times. TikTok CEO Shou Zi Chew met with Indonesian Trade Minister Zulkifli Hasan earlier this month and pledged to invest $10 billion in Indonesia over the next 2 to 5 years. TikTok Shop’s cross-border e-commerce business will more than double its e-commerce sales in Indonesia this year from $2.5 billion last year, people familiar with the matter said. And TikTok Shop's gross merchandise volume (GMV) across Southeast Asia is expected to reach $15 billion this year, well above last year's $4.4 billion and accounting for the majority of the size of its global e-commerce business, according to industry estimates.
4. Moody's adjusts baseline assumptions for Fed monetary policy
Moody's sees a slight change in the rating agency's benchmark assumptions for Federal Reserve monetary policy compared to the last time. As with the previous outlook, the Fed's May rate hike is expected to be the last of the current tightening cycle, with the policy rate remaining in its final range of 5% to 5.25% until the end of 2023. However, the Federal Open Market Committee is now expected not to begin cutting rates in January 2024, but to postpone the first rate cut until March, as inflation remains more persistent than previously expected. While the Federal Open Market Committee will take further policy actions based on the ongoing impact of monetary tightening on economic and financial conditions, the policy stance is expected to be sufficiently restrictive over time to be able to bring inflation down to the target level. By the end of 2025, monetary policy will remain restrictive. The federal funds rate will return to the neutral rate in early 2026.
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