Economic indicators show weakness of monetary policy into the observation period

▲ A newly-delivered residential commercial housing in the roadside of Jiangsu Road, Shanghai.　　Recently, according to the real Estate Center released data show, May 17 to May 23 within a week, the Shanghai commercial residential area of 76,000 square meters, the chain Rose 27.9%, while the Shanghai city, the average price of commercial residential transactions fell below 20,000 yuan per square metre. Xinhua News agency Reporter Fei, the central bank this week continued to loosen the liquidity of its currency after last week's open market net investment of 145 billion yuan.　　June 1, the central bank issued 15 billion yuan 1-year vote, circulation is only half of last week, and the issuance rate in the flat 17 times, up more than 8 basis points (BP) to 2.0096%. Economists believe that higher interest rates do not mean higher interest rate expectations, mainly because of the previous year's low yield on the issue of the central vote, investment attraction limited demand depressed, the increase is mainly to adjust the yield structure to make it more reasonable.　　At the same time, given the slowdown in some leading indicators, the European market uncertainty is still large, domestic tightening policy will enter a period of observation.　　The price of the central vote is still in the market this week, or net in the economic downturn worries increase, the expected rate hike in the macroeconomic environment, as the interest rate vane of the end of the 5 consecutive months of flat situation suddenly higher, indeed unexpected. However, analysts believe that higher interest rates do not mean higher interest rate expectations, mainly because of the previous one-year central vote yield is low, investment attraction limited demand depressed, the bank's increase is to adjust the yield structure to make it more reasonable.　　Meanwhile, the central bank may have to maintain a 2-week net operation as interest rates continue to rise in the currency market. "Policy tightening has entered a period of observation, a or two months to determine policy direction, strength." "But because of the extreme nervousness in money markets, the central bank is expected to remain in the net operation this week," said the Bank of China researcher Benji. "The central bank must press the 7-day repo rate below 1.9, or raise the interest rate for the 1-year issue." 15 billion of its circulation, though halved from last week's, is still considered a bit high, after all, money-market interest rates have risen so much that the 1.93% per cent return on the one-year period has been unattractive.　　"Benji said. "There is news that regulators require banks with a ratio of more than 75% of deposits to be in the short term (lower loan-to-deposit ratios below 75%), which may be the main reason for the recent tightening in money markets. Zhaoqingming, a senior researcher at CCB, said that the current view of economic fundamentals is more pessimistic than the earlier period, the central bank can not be too much money to return.　　In the second half, if foreign-exchange accounts continue to fall, the central bank will loosen liquidity in the open market. Some experts believe that the current liquidity tensions, but also the impact of international capital outflows. As Europe's sovereign debt risk intensifies, and safe haven sentiment pushes the dollar to appreciate markedly, Asian currencies generally tend to depreciate against the dollar, with the Hong Kong dollar falling from 7.76 to 7.80, and the offshore marketThe renminbi's appreciation to the dollar, which is expected to fall from 3% to 1.5% a year later, can be seen as a temporary draw away from Asia, and it can be speculated that China's foreign exchange account will rise significantly below April in May. Economic indicators are showing signs of weakness. In addition to the tightening market liquidity, some economic indicators have begun to decline in growth, which also makes policy operations more cautious. "Inflation concerns have now shifted to ' growth concerns '," he said. The pullback in investment growth will be interpreted by the market as a confirmation of the expectation that the market's tight regulation of real estate has led to lower investment and further economic downside risks. The European sovereign debt crisis, which led to a pullback in commodities, has allowed the market to continue to watch the CPI in the short term, but the intensity of inflation expectations for the year will weaken markedly, and fears of a future slowdown may escalate.　　"said the Expert Lu Commissar.　　In fact, the annual growth rate of industrial enterprise profits reported by the Bureau of Statistics has slipped for two consecutive months, and economic indicators have initially shown a weak growth.　　Hu Yu, deputy director of the China Enterprise Federation Research Institute, said that there are two main reasons: first, the base effect last year, on the other hand, because of PPI prices continued to rise, faster than the CPI, resulting in higher costs of industrial enterprises, profit decline. He expects the decline in industrial profit growth to continue in the future. "I think the future growth of industrial enterprises ' profits will gradually fall." "Hu Yu said. According to his analysis, in the current state of the real estate market austerity policies, energy saving and other macro-control policies, as well as the European debt crisis and other factors, the future of steel, building materials and other related industries in the domestic and foreign demand will be directly or indirectly affected by different degrees, industrial enterprises sales revenue growth will Moreover, at present, the gap between ex-factory prices and raw material power fuel price indices has been negative for 6 consecutive months since December 2009.　　In view of the difference between the first index PPI-PPIRM and the profit index of industrial enterprises, the profits of industrial enterprises will gradually enter the descending channel. Guotai chief economist Lee Thunderbolt also believes that the statistics bureau announced the size of industrial enterprises to achieve profit data, quarterly calculation of its year-on-year growth rate will continue to fall to next year. China's industrial profits are expected to increase in the two quarter of 63%, three quarter to 32%, four quarter to 3%, to the first quarter of 2011 to the lowest point of 5%, then gradually rise, in 2011 Three quarterly growth positive, 2011 years of the Four Seasons reached 30%. "Yield and price are the two main factors that determine the level of profit." Looking ahead to 2011, the drop in exports and real estate investment growth means a decline in the growth rate of industrial growth, that is, a fall in revenue growth, while the decline in PPI means a fall in the level of profitability, so industrial profit growth will be significantly lower than in 2010.　　"he said.　　Industrial Bank forecasts that in May China's urban fixed asset investment is expected to fall on the basis of the decline last month, the 8th consecutive month since last September decline. Economic growth or a slight slowdown economists believe that the international EuropeanThe debt crisis is getting worse, the domestic policy regulation is increasing, our country economy wants to maintain the rapid growth momentum of the first quarter, the difficulty is increasing. "We expect that the recent developments in Europe will make China's trade surplus fall further in 2010 (to about $100 billion trillion)," he said. Even if the volume of exports does not change much, the value of exports in dollars (and in renminbi) will be affected. European customers have asked exporters to cut prices because of the devaluation of the euro. "By the end of 2010 and 2011, there could be a more pronounced slowdown in Chinese exports," said Wang Tao, chief economist at UBS Securities. Wang even believes that the European debt crisis could affect the growth rate of China's economy. "We maintain our current forecast for China's GDP growth of 10% per cent in 2010 and 8.7% in 2011, but our forecasts now have more downside risks, especially for 2011," he said. "The increase in domestic macro-control efforts may also impact on economic growth." Since the financial crisis, China's economy has been the first to hit bottom rebound, the biggest contributor is fixed assets investment, of which real estate investment occupies a large proportion.　　Undeniably, regulation of the real estate industry is an important means to maintain the steady development of the industry, but at least in the short run, regulation will inevitably inhibit the growth rate of investment. Another long-term benefit, but the short-term impact on economic growth is the regulatory policy is to eliminate backward production capacity. "We believe that the third quarter before the elimination of the target task of backward production capacity, will have a certain impact on industrial value, especially the production of non-ferrous metals will be reduced more, at the same time, coke, pig iron and other smelting resources of the production capacity will be to Shanxi and other provinces rely on smelting and resources to bring The concrete implementation of the policy reflects the Government's determination to restructure its economy, especially its backward capacity, and we will reduce GDP growth by three quarters.　　"Shanxi Securities macro Strategy Group leader Shing said." As for the future policy direction, Benji believes that after this period of wait-and-see, monetary policy may be tight after the loose. The current tightening of monetary policy is largely a concern over whether future external demand will stabilize growth, and monetary policy is expected to tighten further as inflationary pressures in the three quarter exceed expectations. But at the end of the four seasons the central bank will loosen policy.