Market Review
Key News
Chinese Market
1. Banking and Insurance Regulatory Commission Implements "Commercial Bank Capital Management Measures"
In recent years, as China's economic and financial situations and the risk characteristics of commercial banks have evolved, capital regulation faces some new challenges. It is necessary to make adjustments based on new circumstances. Grounded in the realities of China's banking industry and combining the latest achievements of international regulatory reforms, the Banking and Insurance Regulatory Commission has revised the original "Capital Measures" that have been implemented for over a decade. The "Commercial Bank Capital Management Measures" will be officially implemented from January 1, 2024, with a transition period set. This includes a two-year transition period for the loss provision included in capital net amount and a five-year transition period for information disclosure.
2. Securities Regulatory Commission Guides Various Funds to Invest in A-shares
In the work related to the capital market, the Central Financial Work Conference pointed out the need to optimize financing structures and better utilize the pivotal function of the capital market. Zhang Wangjun, the director of Market Supervision Department I of the China Securities Regulatory Commission, expressed that it is timely to evaluate and optimize mechanisms such as share reduction, margin financing, and refinancing. There is a strong push for reform on the investment side, attracting long-term funds to the market, and actively supporting overseas high-quality entities to invest in domestic securities and fund management institutions according to law.
3. Xinjiang Free Trade Zone Inaugurated
China's 22nd Free Trade Zone—The Xinjiang Free Trade Zone has been inaugurated, becoming the first free trade zone set up in China's northwestern border region. It is known that the Xinjiang Free Trade Zone undertakes 129 reform pilot tasks assigned by the state. The nation will support the Xinjiang Free Trade Zone by utilizing its advantages in ports and passages, attracting domestic and foreign resources, and exploring in promoting investment facilitation, enhancing financial service functions, and advancing the development of the digital economy.
4. In the First Three Quarters, GDP Growth Rates of 17 Provinces Exceeded 5.2%
Up to now, 31 provinces, regions, and municipalities have successively announced their economic operation conditions for the first three quarters. From the data, it can be seen that the economic operations in the first three quarters across various regions are generally good, with more than half of the provinces experiencing an economic growth rate faster than the national average. Among them, the GDP growth rates of provinces such as Tibet, Hainan, Inner Mongolia, Gansu, and Sichuan lead the nation, all reaching more than 6.5%.
Overseas Market
1. The Federal Reserve Holds Rates Steady for Two Consecutive Meetings
The Federal Open Market Committee (FOMC) announced post-meeting that the target range for the federal funds rate remains at 5.25% to 5.50%, maintaining this policy rate at its highest level in twenty-two years. This marks the first time during the current tightening cycle since March of last year that the Fed has held rates steady over two consecutive meetings. However, the Federal Reserve reiterated that inflation remains high and that their balance sheet reduction plan is proceeding as scheduled. The "New Federal Reserve News Agency" stated that the Fed's remarks have opened the door to another rate hike.
2. The United States Slows Down the Pace of Long-Term Bond Issuance
The U.S. Treasury Department is slowing the issuance pace of long-term bonds, with the overall borrowing size slightly below general expectations. This move suggests that officials may be concerned about the surge in yields over the past few months. According to the Treasury Department's refinancing report, the total bond issuance for next week's refinancing amounts to $112 billion, an increase from the $103 billion announced in August but less than the $114 billion expected by Wall Street bond traders. This marks the second consecutive quarter in which they have increased the refinancing issuance size.
3. Japan's Ministry of Finance Declares Readiness to Intervene in the Yen if Necessary
With the Bank of Japan once again "adjusting" the YCC policy, the yen saw its biggest single-day drop in more than half a year. The Japanese Ministry of Finance stated it is "always on standby" to intervene in the yen. The Ministry used the same wording as it did for the three currency interventions last year, clarifying that it had not intervened in the past month. Recently, speculators in the yen and Japanese bond markets have been betting that Japan's policymakers will struggle to maintain a balance between curbing inflation and economic suppression caused by a weaker yen and rising yields.
4. Seasonal Oil Stocks in Europe Drop to Lowest in a Decade
Industry consulting firm Wood Mackenzie reports that European oil inventories have dropped to their lowest point in a decade. Inventories at the Amsterdam-Rotterdam-Antwerp trading hub fell to 48.8 million barrels, not only the lowest level since March 2022 but also the lowest for the period since 2013. These data provide support to those bullish on oil prices, indicating good oil demand while major oil-producing countries maintain market supply.
Focus Today
Today, investors should pay attention to the manufacturing PMIs of France, Germany, and the eurozone, the German employment report, U.S. Challenger job cuts, initial unemployment claims, factory orders, and durable goods orders, among other economic data. Additionally, investors should also closely monitor risk events such as the Israeli-Palestinian situation, the Bank of England interest rate meeting, and the press conference of the Bank of England Governor Bailey.
