Daily Macro Economy News on May,18

Latest Global Major Index

International Crude Price Trend and Exchange Rate of RMB to USD Trend

Domestic News

1、NDRC: The fall of the April PMI was a reflection of both the cardinal utility and an insufficient market demand

2、NDRC: We will gradually crack the problem of insufficient charging facilities through innovative charging infrastructure construction, operation and maintenance modes in rural areas

3、Strengthen scientific and technological innovation, accelerate the high-end transformation of traditional industries

4、The NDRC Department of Regional Revitalization convened a departmental communication and coordination meeting on work relief

International News

1、Deutsche Bank: U.S. recession is going to start in the fourth quarter of this year as they predicted

2、Commerzbank: ECB’s disagreement sends Euro lower, but currency may rally again

3、EU proposes major reforms to simplify EU customs union

4、Eurozone Inflation Rises Slightly in April

More details:

Domestic News

1、NDRC: The fall of the April PMI was a reflection of both the cardinal utility and an insufficient market demand

Meng Wei, the spokeswoman with the National Development and Reform Commission (NDRC), said that according to the data released by the National Bureau of Statistics (NBS), the manufacturing PMI fell below the critical point in April. To find out the reason, it was a reflection of the cardinal utility of the recovery in the previous months, an insufficient market demand, and an inadequate endogenous power of economic development. Yet, we should also see that there still are many promising points in the manufacturing PMI sub-data. All these provide us with a more comprehensive and objective perspective to analyze the PMI index and judge the development trend of the manufacturing industry.

2、NDRC: We will gradually crack the problem of insufficient charging facilities through innovative charging infrastructure construction, operation and maintenance modes in rural areas

The National Development and Reform Commission (NDRC) said in a press conference today that at present, China has built a charging infrastructure system including 5.21 million charging piles, which is the largest in number and the largest in radiation area and the most complete service for various vehicles in the world, providing a strong guarantee for the rapid development of new energy vehicles. However, the problem of insufficient charging facilities is still a major constraint of new energy vehicles in rural areas, has become increasingly prominent. In response to that, NDRC will gradually crack this problem through innovative charging infrastructure construction, operation and maintenance modes in rural areas.

3、Strengthen scientific and technological innovation, accelerate the high-end transformation of traditional industries

Xi Jinping pointed out that in order to catch up, Shaanxi Province must make new breakthroughs in strengthening scientific and technological innovation and building a modern industrial system. Based on its own industrial base and resource endowment, it should adhere to the focus of development on the real economy, and consolidate the leading position of local traditional industries, while courageously opening up new fields and new tracks to cultivate new competitive advantages. Taking science and technology innovation as the leader, we will accelerate the upgrading and transformation of traditional industries in high-end, intelligent, and green industries, cultivate and expand strategic emerging industries, actively develop the digital economy and modern service industry, accelerate the construction of modern industrial system with intelligent, green and integrated characteristics and meet the requirements of integrity, advancement, and safety, to cultivate modern energy industry clusters stronger and better.

4、The NDRC Department of Regional Revitalization convened a departmental communication and coordination meeting on work relief

On May 16, Tong Zhangshun, director of the Department of Regional Revitalization of the NDRC, presided over a departmental communication and coordination meeting on work relief. The meeting requested that all relevant departments should further strengthen the coordination and cooperation, study and formulate the list of national key projects applicable to the work relief in 2023, persistently carry out policy propaganda and training interpretation, strengthen the supervision and guidance to localities and project owners and construction units in different industries and fields, grasp the details of work relief policy in key projects and small and medium-sized agricultural and rural infrastructure construction fields. In addition, NDRC will continue to expand the scale of labor remuneration distribution, effectively promote the employment of people near the project site to increase their income and ensure that the role of "relief" is given full play.

International News

1、Deutsche Bank: U.S. recession is going to start in the fourth quarter of this year as they predicted

Deutsche Bank says aggressive rate hikes will invert U.S. bond yields and cause the U.S. economy to fall into a hysteretic recession instead of a soft landing. At present, almost all leading indicators show that the United States will fall into recession by the end of this year. One of the key indicators is the inversion of a 2-year and a 10-year U.S. bond yields last March, the final signal of the start of a long recession countdown. Considering that U.S. bond yields have been inverted for so long, it affirmatively has affected future economic activity.

2、Commerzbank: ECB’s disagreement sends Euro lower, but currency may rally again

The unanimity among The European Central Bank (ECB) policymakers on the path of interest rates appears to be disintegrating, in line with the euro's recent downtrend against the dollar, said Commerzbank. Esther Reichelt, a foreign exchange analyst with Commerzbank, said in a report that ECB Governing Council member Robert Holzmann is considering raising rates to above 4.0% from the current 3.25%, while another Governing Council member, Yannis Stournaras, believes that the end of rate hikes is around the corner. However, she said the ECB may resist a rate cut next year. Reichelt said that as long as it really happens, they still seem to have reason to bet that EUR/USD will be well supported by the end of the year while the Fed cuts rates.

3、EU proposes major reforms to simplify EU customs union

The EU is proposing an overhaul of its customs framework that would introduce a data-driven system that would simplify the process for traders. The European Commission's proposal would simplify reporting requirements, including reducing the time of the import process, providing a single EU interface, and facilitating data reuse. According to a statement from the European Commission, the reforms would create a new EU Customs Administration to oversee the data center, a single online portal where importers would be able to record all information about their products and supply chains. The center will replace the existing customs IT infrastructure in EU member states and could save up to 2 billion euros a year in operating costs. In addition, artificial intelligence will be used to predict problems before goods are shipped to the EU.

4、Eurozone Inflation Rises Slightly in April

Eurostat said on Wednesday, the raising inflation in the Eurozone last month confirmed the preliminary data which shows that price rises in the 20-nation eurozone are becoming more resilient. Headline price increases to 7.0% in April from 6.9% in March as rising service and energy costs offset a slowdown in food price inflation. Despite a slowdown in underlying price growth, growth in the key services sector continued to accelerate, suggesting that increasing wage pressures may keep inflation above the ECB's 2% target. Excluding volatile food and fuel prices, core inflation fell to 7.3% from 7.5%, while a stenosis index excluding alcohol and tobacco fell to 5.6% from 5.7%, this is the first decline since last June.

Domestic Macro Economy Index