1
Last week's Macroeconomic policyReview
PART ONE
Last Thursday Federal Continued the hawkish attitude at Jackson Hole meeting, Powell continued the third consecutive rate hike 75 basis points, which meets market expectations, but at the same time the updated dot chart also shows that the path to rate hikes in the future will be more advanced and steep, and the federal funds rate may remain high for a longer period of time (High for longer), which will put pressure on US economic growth, and the Federal Reserve has also lowered its expectations for growth accordingly, and clearly stated that the Federal Reserve can tolerate economic slowdown, but cannot bear the cost of out-of-control inflation.
After the interest rate meeting, the long-term and short-term US bond interest rates hit new highs, and the actual interest rate behavior is mainly driven by factors. As of 5 pm last Friday, the yield on the 10-year U.S. Treasury rose 26 basis points per week to about 3.71%, and the yield on the 2-year U.S. Treasury rose 28 basis points per week to about 4.15%.
Due to the Fed's more radical "pre-rate interest rate hike" strategy, the inverted U.S. bond yield curve has further deepened to 44 basis points.
2
Major stock markets around the world and Commodity , Exchange rate performance
PART TWO
U.S. stock , this week, the Dow Jones Industrial Average fell 4%, S&P 500 index fell 4.65%, and the Nasdaq fell 5.07%.
European stocks , European stocks closed down, German DAX index fell 1.97%, and 3.59% weekly. French CAC40 index fell 2.28%, down 4.84% on the weekly basis. The FTSE 100 index fell 1.97% and fell 3.01% weekly.
This week, , COMEX gold futures fell 1.89%, and COMEX silver futures fell 2.82%.
this week, US oil November contract fell 6.67%, and Berkeley's December contract fell 6.08%.
Onshore RMB closed at 7.1104 against the US dollar on Friday at 16:30, down 294 basis points from the previous trading day, and fell 938 basis points this week. The central price of the RMB against the US dollar was 6.9920, declining by 122 basis points, and this week it has accumulated a declining by 615 basis points.
3
Chinese dollar bond market review
PART THREE
The secondary market performance of Chinese dollar bonds
Data source: Bloomberg
Chinese dollar bond investment grade market generally declined, the Federal Reserve raised interest rates 75bp as scheduled, in line with market expectations. After the interest rate meeting, the yield on the short-term US bonds rose sharply, and the short-term was significantly sold. The trading of the state-owned enterprise sector was light, with Sinopec strengthening at a long end of 0.6pt; the technology sector was weak overall, with Alibaba , Tencent , Meituan , Huawei all widening 15-40bps. The financial sector was mixed, and the bank Tier 2 name on Friday, driven by buying, interest rate spread narrowed again by 2-4bps, and the short-term was sold to a certain extent, with the average yield of the two-year period reaching 4.1%; the leasing name narrowed by 1-3bps; the AMCh name did not fluctuate much, and Huarong overall stabilized. The real estate sector fell slightly, with a large decline in the medium and long ends. The interest rate spreads of Longfor , Longfor , , Vanke , and mid-to-long ends widened by 20-30bps.
The high-yield market for Chinese dollar bonds fell overall this week, with negative news about high-yield real estate names frequently appearing. Among the high-grade names, Country Garden was downgraded by Moody's, and the curve fell by 5-7pt on the weekly basis; Xuhui was downgraded by Fitch, and there were rumors that private equity products were partially extended, and its semi-annual report was announced to be halved, and the whole weekly basis fell by 5-9pt on the weekly basis; among the medium-grade names, Country Garden is uncertain whether to redeem domestic private bond that expired on October 19, the US dollar bond curve plummeted by 8-10pt, and its perpetual bond fell to the 20-25 net price range. The ocean curve slightly down 1-2pt. Among the low-rating names, Zhongjun Group plans to issue bonds with China bonds to be guaranteed between domestic banks, with a curve rising by 3-6pt, while Greenland and Country Garden rose slightly by 1-2pt under private bank buying.
Key credit events
htmlOn September 20, according to REDD, Zhongjun plans to issue bonds guaranteed by China Bond in the interbank market, and is currently undergoing approval of new bonds. Zhongjun Group responded that the company is actively communicating and there are currently no specific details for implementation.
htmlOn September 21, Xuhui Group completed the issuance of 1.2 billion yuan of medium-sized notes, with a face rate of 3.22%, and the issuance period is 3 years. China Bond increased its full guarantee. After deducting the issuance expenses, the funds raised will be used for project construction, repurchase or repayment of overseas US dollar bonds of Xuhui Holdings (Group) and repaying the issuer's interest-bearing debts.
htmlOn September 21, China Fortune Land Development announced that the total amount of financial debts signed in the debt restructuring plan to achieve debt restructuring is approximately RMB 120.3 billion. Guided by the principle of equal treatment of debt, the Group is launching a recommendation to the holders of existing offshore bonds. If the proposed restructuring is not completed, the Group has no other alternative restructuring plans for existing offshore bonds. In addition, based on the "Debt Restructuring Plan", it is planned to increase debt repayment resources and options, and specially formulate a "Supplementary Plan" to use the equity of the "Happy Selection" platform as the new debt repayment resources to implement debt repayment using shares.
First-level new market
In the past week (16/9-22/9), the issuance of primary market has rebounded slightly compared with the previous week. 9 new Chinese dollar bonds were issued, with a total scale of about US$1.261 billion. The issuing entities are mainly concentrated in the urban investment sector, and the final issuance pricing is in the range of 5.2%-7.5%.
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