The so-called disguised interest rate hike is actually to raise the open market reverse repo rate and interbank lending rate, thus affecting the relevant loan interest rates, tightening some currencies and raising financing costs. Although it can't be compared with the impact of raising deposit and loan interest rates on society as a whole, it is a clear signal sent by the central bank, indicating that China's monetary policy has changed from stable and loose to neutral and tight.
So what are the specific effects of the central bank's disguised interest rate hike on the market? Let's analyze them one by one.
First, the central bank tightened monetary policy.
16 the price of steady economic growth is a sharp rise in house prices, a sharp rise in leverage and pressure on the exchange rate. The Central Economic Work Conference decided that curbing the real estate bubble, preventing financial risks and promoting reform will be the primary goals in 17.
Against the background of short-term economic stabilization and rising inflation, this interest rate hike is a deleveraging measure taken by the central bank in response to the substantial expansion of the financial industry and the large amount of credit, which is similar to the non-standard expansion regulated in 13, and also confirms that monetary policy has been tightened neutrally.
Second, it is similar to raising interest rates in disguise.
As far as the Bank of China is concerned, there are two sets of official interest rates. One is the well-known deposit and loan interest rate. Generally speaking, raising interest rates and lowering interest rates are related to the changes in the benchmark interest rates of deposits and loans.
But there is actually another set of official interest rates, mainly represented by the repurchase bidding rate, so the increase of repurchase interest rate actually represents the disguised interest rate increase of the central bank. The difference between deposit and loan interest rates is that the former mainly affects the currency and bond markets, while the latter mainly affects the loan market.
Third, the bond market fully responded in advance.
Because the financial market is dynamic, the loan interest rate is mainly determined by banks and usually changes slowly. However, bond interest rates are determined by the market and usually change rapidly.
Therefore, although only the positive repo rate 10bp was raised this time, the central bank began to lengthen the reverse repo period as early as August 16, and increased the MLF operation, while the bond market began to adjust from June 1 1, so up to now, 10 national debt and national debt have been used.
Therefore, since last June 165438+ 10, the average interest rate of the whole society has gone up by 15bp, which is equivalent to a formal interest rate increase of 0.7 times.
Fourth, real estate is coming in winter.
By the end of September 16, the average interest rate of bank housing loans is 4.52%, and the average term of bank loans should be above 10. At that time, the national debt interest rate of 10 was only 3. 13%, but now the national debt interest rate of 10 is close to 4. 1%. For banks, it does not need to occupy any venture capital, but it needs to occupy 50% of the capital to issue mortgages. Banks are highly profitable and highly leveraged industries, with limited capital and extremely high occupation cost. Therefore, according to the current national debt interest rate of 4. 1%, from the comparison of historical data, the reasonable mortgage interest rate should be around 5.5%, which is 100bp higher than the current level. Therefore, the central bank's confirmation of raising interest rates in the money market actually means that there is a risk of a substantial increase in mortgage interest rates. At present, the benchmark interest rate for loans over five years is 4.9%, which means that all discounted mortgages will disappear at a reasonable level of 5.5%, otherwise banks might as well buy bonds.
However, the extraordinary prosperity of the real estate market in 16 was not supported by the demographic structure, but by a large number of mortgages. If the mortgage interest rate continues to rise in the future, the government will roll out the policy of restricting loans for speculative purchases in some first-and second-tier cities, real estate sales will continue to decline, and the real estate market will come in a severe winter.
Verb (abbreviation of verb) economic downside risk increases.
16 since the second half of the year, the economy has obviously improved, which is actually mainly attributed to the inventory cycle. After the enterprise's inventory is fully consumed, it will gradually replenish its inventory to drive industrial production to pick up.
However, if commodity prices do not rise any more, the motivation for enterprises to replenish their inventory will gradually disappear and the inventory cycle will soon end.
Real estate investment also rebounded in the fourth quarter of 16, mainly due to the lag effect of the recovery of real estate sales. If real estate sales continue to decline in the future, the rebound of real estate investment will be difficult to sustain.
Therefore, the main support is infrastructure investment, but after all, it is difficult to raise a tree.
We expect that the downward pressure on the economy will be obvious as soon as March, and the probability of economic growth in the whole year will be high before and then low, which is contrary to the situation of stabilization and recovery last year.
The increase of cash value of intransitive verbs
For cash assets, the monetary interest rate is the rate of return, so the increase of repurchase interest rate means the increase of the rate of return on holding cash assets.
Take the money fund that is most similar to cash as an example. The biggest monetary fund is Yu 'ebao. Its annualized rate of return on June 7th of 16 1 1 was less than 2.5%, and now it has reached 3.6%.
In the past, domestic housing prices have fallen and even some cities have begun to fall, while the stock market and bond market are also pulling back, and the cash yield has continued to rise. Actually, the best strategy is that cash is king.
Seven, the stock market and bond market risk is limited.
Theoretically, raising interest rates is the most unfavorable to the bond market, but the fact is that the bond market is the most sensitive to raising interest rates, but the impact of raising interest rates on the bond market is actually dialectical and not necessarily unfavorable.
Because it is the economic fundamentals that really determine the trend of the bond market, for example, the United States raised interest rates at the end of 15, but in the first half of 16, the interest rate of US 10-year government bonds once fell 100bp, because the US economy was not good in the first half of 16, the market expected that the US interest rate hike would be delayed.
Similarly, the central bank continued to cut interest rates in previous years, but it gave birth to a real estate bubble at 16, which triggered a sharp rebound in house prices and inflation, leading to a depreciation of the exchange rate, which was ultimately unfavorable to the bond market. But now the central bank has begun to raise interest rates in disguise, which actually helps to curb the real estate bubble and inflation risks, help stabilize the exchange rate, and ultimately benefit the bond market. It can be found that the decline of 10-year treasury bond futures is less than 1%, which is far less than the one-time limit at the end of 16, and the closing price of the main contract is now higher than that at the end of 16.
We believe that in the process of deleveraging, the economy is stable in the short term and falling in the long term, so interest rates are also rising in the short term and falling in the long term. Especially for China economy with high debt, high interest rate is unbearable pain, so we think that the interest rate of 10 national debt of 3.5% has long-term allocation value, and the risk of further adjustment in the future is limited.
For the stock market, in the short term, the upward interest rate also has a negative impact on it, but the impact is less than that of the bond market. The reason is that the stock market is a multi-factor pricing model, and the upward interest rate is not conducive to valuation, but short-term economic stability and profit improvement can partially hedge the downward valuation.
In the long run, if the government is determined to curb the real estate bubble and effectively guard against financial risks, then funds will be expected to flow out of the real estate market, and the stock market is expected to benefit from the return of funds. China's economy is actually expected to be healthier after resolving the real estate cancer, and the stock market is a reflection of the real economy and is also expected to reflect the improvement of the economic structure.