Market Review
Key News
Chinese Market
1. China's first-tier cities see a month-on-month increase in pre-owned home prices in September
Data from the National Bureau of Statistics show that in September, among 70 large and medium-sized cities, first-tier cities saw new home sales prices remaining stable month-on-month with a larger year-over-year increase, while the prices of pre-owned homes began to rise month-on-month, with a narrowing year-over-year decrease. In second and third-tier cities, prices for both new and used homes fell month-on-month, with increases and decreases seen year-over-year. Among second-tier cities, Chengdu saw a year-over-year increase of 5.8% in new home prices, growing by 7.6% from January to September; cities like Changchun, Shenyang, and Harbin were among those with the largest decreases in pre-owned home prices in September (or from January to September).
2. State-owned enterprises accelerate specialization and integration
Under the promotion of the State-owned Assets Supervision and Administration Commission of the State Council, state-owned enterprises have accelerated their specialization and integration. A meeting on deepening specialization integration and speeding up the development of strategic emerging industries was held, where 14 groups of 23 companies signed contracts for key projects in two batches. The projects cover key areas such as mineral resources, medical institutions, new types of infrastructure, biotechnology, and intelligent connected vehicles, many of which involve the integration and cooperation of strategic emerging industry resources, serving as significant examples.
3. Shanghai takes proactive steps in laying out 6G technology R&D and testing facilities
The People's Government of Shanghai has issued the "Action Plan for Further Advancing the Construction of New Types of Infrastructure (2023-2026)". The plan reveals that Shanghai is set to prepare for a "space-earth integrated" satellite internet, proactively lay out 6G technology R&D and testing facilities, create a digital twin simulation verification platform that spans the entire process of chip manufacturing, and develop a super-large autonomous and controllable intelligent computing infrastructure.
4. The number of provinces and cities planning to issue special refinancing bonds increases to 20
Since October 6, a total of more than 900 billion yuan in special refinancing bond issuance plans have been disclosed by 20 provinces and cities nationwide. This means that, currently, 20 regions have announced plans to issue special refinancing bonds, with the disclosed amount reaching 9104.8058 billion yuan. Jilin has followed Inner Mongolia, Yunnan, and Tianjin in becoming the most recent region to disclose its special refinancing bond documents for the second time, with the planned issuance amount totaling 690.23 billion yuan.
Overseas Market
1. Powell says strong economic evidence could support rate hikes
Federal Reserve Chairman Powell, in his speech at the New York Economic Club, first summarized his views on recent economic data, stating, "Data from the past few months show that the Federal Reserve is making progress in achieving its dual mandate of maximizing employment and stabilizing prices". Analysis suggests that Powell's speech generally matches market expectations of a "hawkish tone," reiterating the need for "caution" in policy advancement, warning against complacency in cooling inflation too soon, and confirming the direction of keeping "rates higher for longer".
2. U.S. existing home sales fall to a new low since 2010
According to data from the National Association of Realtors (NAR), as affordability worsens for buyers, U.S. existing home sales in September fell to their lowest since 2010. The median sale price of homes in September rose 2.8% year-over-year, recording the highest September in history. The ongoing supply shortage continues to drive bidding wars and price increases among buyers. The median price of homes sold in September was $394,300, a 2.8% increase from September last year, making it the highest September price on record.
3. The US plans to replenish its strategic oil reserve at no more than $79 per barrel
The U.S. government, which hasn't taken advantage of the year's low prices to significantly replenish its Strategic Petroleum Reserve (SPR), is prepared to pay higher prices now. The U.S. Department of Energy stated that the Biden administration aims to purchase 6 million barrels of crude oil for delivery in December this year and January of the next year to replenish the strategic oil reserve. The maximum price for the oil purchased under this new plan is set at $79 per barrel, which is significantly higher than the earlier target of $70 this year but still substantially below the current near $90 crude oil futures prices.
4. Bank of Japan significantly raises economic assessment in a wide range
The quarterly report released by the Bank of Japan shows that the bank has raised its economic assessments for six out of nine regions in Japan, marking the largest adjustment since July 2022. This increase highlights the Bank of Japan's confidence in economic recovery, with market speculation about future policy adjustments by the bank continuing to spread. Notably, the Bank of Japan considers achieving a long-term inflation target of 2% as a goal. When this target is reached, the Bank of Japan may end its negative interest rate policy. Many economists have moved forward their expectations for the Bank of Japan's exit from its ultra-loose monetary policy to the first half of 2024.
Focus Today
Today, investors should pay attention to economic data such as Japan's national CPI, China's one-year and five-year loan prime rates, retail sales in the UK and Canada. In addition, investors should also keep an eye on the situation in Palestine and Israel, speeches by Bank of Japan Governor Kazuo Ueda and Philadelphia Fed President Harker among other risk events.
