December 11 Macroeconomic Index:China is confident in promoting economic growth, while global monetary policy divergence intensifies

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

Domestic News

1. Chinese President Xi Jinping: China has full confidence in achieving this year's economic growth target

2. General Administration of Customs: Iron ore, coal and natural gas imports increased in the first 11 months

3. General Administration of Customs: Monthly imports and exports have maintained growth for 8 consecutive months, and foreign trade is expected to end smoothly throughout the year

4. Easy monetary signals ignite the bond market. The 10-year Treasury bonds yield hit 1.83% and hit a new low

5. The first in the world! The low-energy, strong-current, high-charge, heavy-ion research device passed the acceptance

 International News

1. The U.S. dollar index rose on the 9^th

2. CICC: Non-farm payrolls data support the Fed to continue to cut interest rates

3. The U.S. small business confidence index exceeded expectations, reaching its best level in nearly three and a half years

4. ING International: The European Central Bank's 25bp interest rate cut is expected to be a foregone conclusion, and the euro should face another decline

5. The RBA's policy stance has shifted significantly, with February next year in focus

Domestic News

1. Chinese President Xi Jinping: China has full confidence in achieving this year's economic growth target

President Xi Jinping met with heads of major international economic organizations attending the "1+10" dialogue in China at the Great Hall of the People in Beijing. Xi Jinping introduced the relevant situation of the Third Plenary Session of the 20th Central Committee of the Communist Party of China, especially a series of important measures recently introduced by China, pointing out that after more than 40 years of sustained and rapid development, China's economy has entered a stage of high-quality development, and its contribution to world economic growth has remained at about 30%. China is fully confident in achieving this year's economic growth target and will continue to play its role as the biggest engine of world economic growth. China's development is open and inclusive, and China will continue to expand its opening-up, take the initiative to align with international high-standard economic and trade rules, build a market-oriented, law-based and international first-class business environment, and build a new system of a higher-level open economy, so as to provide more new opportunities for the development of all countries in the world and share more development dividends. (CCTV News)

2. General Administration of Customs: Iron ore, coal and natural gas imports increased in the first 11 months

According to the data of the General Administration of Customs, in the first 11 months, China imported 1.124 billion tons of iron ore, an increase of 4.3%, and the average import price (the same below) was 768 yuan per ton, down 3.9%; crude oil was 506 million tons, down 1.9%, 4208.8 yuan per ton, up 0.3%; coal was 490 million tons, an increase of 14.8%, 688.4 yuan per ton, a decrease of 12.5%; natural gas was 120 million tons, an increase of 12%, 3506.2 yuan per ton, down 5.8%; soybean 97.09 million tons, an increase of 9.4%, 3591.7 yuan per ton, down 15.1%; refined oil was 44.94 million tons, an increase of 4.5%, and 4322.9 yuan per ton, an increase of 4.5%. In addition, 26.333 million tons of primary shape plastics were imported, a decrease of 2.4%, or 10,800 yuan per ton, a decrease of 0.1%; unwrought copper and copper products were 5.127 million tons, an increase of 1.7%, and 67,700 yuan per ton, an increase of 11.1%. (General Administration of Customs)

3. General Administration of Customs: Monthly imports and exports have maintained growth for 8 consecutive months, and foreign trade is expected to end smoothly throughout the year

According to data released by the General Administration of Customs on December 10, imports and exports in November were 3.75 trillion yuan, a year-on-year increase of 1.2%, and monthly imports and exports maintained growth for eight consecutive months. Recently, the executive meeting of the State Council deliberated and adopted the "Several Policies and Measures on Promoting the Steady Growth of Foreign Trade", and the Ministry of Commerce, the General Administration of Customs and other departments have also launched specific measures to accelerate the integrated development of domestic and foreign trade, further optimize the business environment at the port, and promote the facilitation of customs clearance for enterprises. (Xinhua News Agency)

4. Easy monetary signals ignite the bond market. The 10-year Treasury bonds yield hit 1.83% and hit a new low

The yield on the 10-year Treasury note hit another record low on the back of signals of monetary easing. On December 10, the yield of the 10-year active treasury bond "24 interest-bearing treasury bond 11" (240011) fell by 7.5BP (basis points) to 1.8300%, continuing to hit a record low. The yield on the 30-year active treasury bond "24 Special Treasury Bond 06" (2400006) also fell all the way down, falling to 2.0450%, a sharp decline of 4BP from the previous day. Treasury futures rose strongly throughout the day, with the main 30-year contract closing up 1.37% to a record high. The Treasury ETF market was all in the red, with the 30-year Treasury ETF rising 1.87%. The meeting of the Political Bureau of the Central Committee held on the 9th conveyed a signal of steady growth, which formed a positive support for the bond market. For the economic work in 2025, the meeting first mentioned "unconventional counter-cyclical adjustment", and the tone of monetary policy has changed from "prudent" to "moderately easing" for 14 years. The loose monetary signal promotes the bond market to strengthen, industry insiders analyze, the future bond bull will continue, the 10-year Treasury bond yield can be seen as low as 1.6%, but there is also a view that if the economic fundamentals continue to run in 2024 next year, the bond market yield will rebound in the future, and it needs to be treated cautiously. (CBN)

5. The first in the world! The low-energy, strong-current, high-charge, heavy-ion research device passed the acceptance

It was learned from the Chinese Academy of Sciences that the world's first low-energy, strong-current, high-charge heavy ion research device developed by China has recently passed the expert acceptance organized by the National Natural Science Foundation of China. According to reports, the device can provide heavy ion beams with high intensity and high charge state, and there are many types of ions and a wide range of energy changes, which will provide advanced experimental conditions for cutting-edge research such as nuclear astrophysics and atomic physics and applied research such as nuclear energy material research and development. The device is a major national scientific research instrument development project, developed by the Institute of Modern Physics, Chinese Academy of Sciences. (Xinhua News Agency)

International News

1. The U.S. dollar index rose on the 9th

The dollar index, which measures the greenback against a basket of six major currencies, rose 0.09% on the day to settle at 106.147 at the end of the session. At the end of the New York market, the euro was worth $1.0555, unchanged from the previous session, and the pound was worth $1.2753, up from $1.2735. The U.S. dollar was worth 151.24 yen, up from 149.97 yen in the previous session, the U.S. dollar was worth 0.8787 Swiss francs, down from 0.8789 Swiss francs in the previous session, the U.S. dollar was 1.4159 Canadian dollars, unchanged from the previous session, and the U.S. dollar was 10.9181 Swedish kronor, down from 10.9459 Swedish kronor in the previous session.

2. CICC: Non-farm payrolls data support the Fed to continue to cut interest rates

After being severely hampered by hurricanes and strikes, the number of new jobs in the United States rose sharply to 227,000 in November, but the unemployment rate also rose to 4.2%, indicating that the labor market is slowing, CICC Research reported. Overall, the labor market remains in a state of "waning momentum in job growth, but the job market itself is not weak", which will make the case for the Fed to cut rates again in December. But we also forecast that the Fed will slow the pace of rate cuts in 2025, as policymakers will become more cautious as rates move closer to neutral levels. One predicted risk is the impact of Trump's proposed immigration policy on the labor market, which we tend to have at the moment with a more modest impact, but we also need to keep a close eye on the possibility of extreme scenarios. Based on the NFP data, we think the Fed is on track to cut rates by another 25bp this month.

3. The U.S. small business confidence index exceeded expectations, reaching its best level in nearly three and a half years

The U.S. NFIB Small Business Confidence Index rose 8 points to 101.7 in November, the highest level since June 2021. The uncertainty index fell 12 points from a record high of 110 last month, reflecting increased confidence among business owners after the U.S. election. About 36% of business owners reported job vacancies, with the largest number of vacancies in the transportation, construction and professional services sectors. 18% of business owners plan to create new jobs, and 55% are actively hiring or trying to hire. However, 48% of recruiting firms say there are few or no qualified candidates. Despite persistent hiring issues, the percentage of business owners who cite labor and workforce quality as their top concern drops by one percentage point to 19%, while the percentage that sees labor costs as a key issue rises to 11 percent. In addition, 20% of homeowners are most concerned about inflation, which is down from October but still high. The report makes it clear that the change in the Small Business Optimism Index is due to the results of the presidential election. Lower energy prices and policy changes aimed at protecting domestic businesses appear to be some of the top expectations of the new government.

4. ING International: The European Central Bank's 25bp interest rate cut is expected to be a foregone conclusion, and the euro should face another decline

ING analyst Frantisek Taborsky said in a note that the euro could face a new round of declines after a brief respite in recent days due to position adjustments, "however, to see more action here, we will have to wait until Thursday's ECB meeting, when it should show the direction of the next step." "At the ECB meeting, a 25 basis point rate cut seems a foregone conclusion. However, Taborsky said the press conference could spark discussions about further rate cuts later, which could weigh on the euro.

5. The RBA's policy stance has shifted significantly, with February next year in focus

RBA Chair Bullock's quiet humility and ability to communicate clearly without complicated economic terms have led some central bank watchers to overlook the fact that on Tuesday, the RBA announced its most significant shift in guidance in years, according to a Wall Street Journal analysis. For all intents and purposes, the RBA ended 2024 with an accommodative tilt but set the stage for a possible rate cut in February. This apparently dovish shift comes after the RBA has long refused to discuss a rate cut, while warning of rising inflation risks and a tight labour market. But now, they no longer mention the possibility of raising interest rates and have also lifted warnings about rising inflation. Whether inflation can be within the RBA's target range in the future will be the crux of whether to cut interest rates in February.

Domestic Macro Economy Index