[April 7 SMM Steel Market Morning News] the central bank announced a directional reduction, releasing a total of about 400 billion yuan in long-term funds.

Tuesday, April 7, 2020

Breakfast news

Rising factor

1. The central bank announced a targeted reduction of 1 percentage point for small and medium-sized banks, releasing a total of about 400 billion yuan in long-term funds.

The central bank decided to reduce the deposit reserve ratio by 1 percentage point for rural credit cooperatives, rural commercial banks, rural cooperative banks, rural banks and urban commercial banks operating only in provincial administrative areas, and to implement it twice on April 15 and May 15, with a reduction of 0.5 percentage points each time, releasing a total of about 400 billion yuan of long-term funds. At the same time, it was decided to cut the interest rate on excess reserves held by financial institutions with the central bank from 0.72% to 0.35% from April 7.

2. In the first quarter, China's bond market issued a total of 12 trillion yuan of bonds, an increase of 14 percent over the same period last year.

In the first quarter of 2020, China's bond market issued 12 trillion yuan of bonds, up 14 per cent from a year earlier, with a balance of 103 trillion yuan, up 4 per cent from the end of last year. China's bond market continues to develop steadily, providing strong support for epidemic prevention and control and economic and social development.

3. Ministry of Housing and Construction: the national resumption rate of housing construction and municipal infrastructure projects exceeds 85%.

A total of 186600 housing construction and municipal infrastructure projects are under construction, of which 158700 have resumed work, with a recovery rate of 85.06%. Among them, the resumption rate of 16 provinces (autonomous regions and municipalities) has reached more than 90% (including). In addition, the resumption rate of sales offices across the country reached 92.73%. The Ministry of Housing and Construction said that it is necessary to actively expand effective investment and consumption in housing and urban and rural construction. We will do a good job in the transformation of shantytowns, the construction of policy-oriented rental housing, and the transformation of old residential areas in cities and towns, further improve support policies, and speed up the commencement and resumption of reconstruction projects.

3. China Automobile Association: the comprehensive rework efficiency of national automobile dealers is 72.5%.

China Automobile Association: so far, the comprehensive resumption efficiency of dealers in the country is 72.5%. The industry believes that, from the current point of view, it will take some time for the Chinese car market to really recover, but with the continuous promotion of various favorable policies, these will play a certain role in promoting sales, and market demand is expected to increase slowly.

Falling factor

1. The IMF says the impact of the epidemic is worse than the financial crisis

IMF: this is a crisis that the IMF has never seen since its inception. We see that the world economy is stagnant and is already in recession, much worse than it was during the global financial crisis. Saving lives and protecting livelihoods should go hand in hand, both of which are indispensable. Some countries are highly dependent on commodity exports and prices are collapsing.

2. Moody's: real US GDP is expected to shrink by about 2 per cent in 2020

Moody's: real US GDP is expected to shrink by about 2 per cent in 2020. The federal deficit is expected to account for nearly 15 per cent of GDP in 2020. The federal debt is expected to rise from 79% in 2019 to about 93% of GDP in 2020 and will continue to rise. The Fed is expected to keep interest rates close to zero until 2022.

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