Interest rate hike and inflation game Shanghai zinc continues concussion trend

The overall performance of the international market during the Ching Ming Holidays was steady and strong. US stocks continued to fluctuate and rallied. The Dow once again refreshed its recent highs. The LME metal shocked consolidation and broke through the consolidation platform. Domestically, due to concerns about the continued high CPI data in March and the obvious pressure of inflation, the central bank once again adopted interest rate hikes to curb inflation. Although China's tight monetary policy cannot be questioned, crude oil prices have continued to hit new highs and commodities have been operating at high levels. In the process of raising interest rates and inflation, Shanghai Zinc followed the trend of Lun Zeng rebounded, but the domestic tight monetary pressure and weak downstream support to support the rise of Shanghai zinc is limited, the recent trend of Shanghai zinc will continue the trend of concussion. The current tight negative interest rate policy of monetary policy still exists.

The People's Bank of China announced on April 5 that it has raised the benchmark interest rate by 0.25 percentage points since the 6th. At this point, the one-year deposit rate was adjusted to 3.25% and 6.31%, respectively. This is the fourth time since the Central Bank of China announced the rate hike since last year and it is also the second time this year to raise interest rates. The March CPI data is about to be announced, and the market is generally expected to maintain a high CPI. Because the current CPI is already well above the internationally recognized warning line of 2%, the pressure to control inflation is indeed greater. The interest rate hike is mainly to control inflation expectations, considering the short-term impact of the market from the capital perspective. However, in fact, after the Ching Ming Festival, the overall commodity market did not weaken, and the commodity market did not respond strongly to news of interest rate increases. Among them, the Shanghai zinc main contract to get rid of the downward trend, only subject to the suppression of the 60-day moving average.

The rate of interest rate hike in the country is still relatively conservative, and the status of negative interest rates has not yet been changed, which has not had a substantive direct impact on curbing inflation. Although the domestic monetary policy tightened again, the global commodity market prices have been steadily increasing. Crude oil, cotton, rubber and beans and other agricultural products are still at high prices, directly consuming the negative impact of domestic interest rate hikes. At present, Europe and the United States and other countries still maintain a loose monetary policy, leading to a significant reduction in the effectiveness of domestic monetary policy. Therefore, under the trend that peripheral commodity prices are still running at a high level, although Shanghai Zinc is tightened by monetary policy, the trend of shocks will continue.

Fundamental energy prices rise The increase in the cost of production of goods The National Development and Reform Commission decided to increase the sales price of gasoline and diesel by 500 yuan and 400 yuan per ton respectively from April 0, 2011 on April 7, 2011. The national average of 93 gasoline increased by 0.39 yuan per liter. This rise was due to the turmoil in the international situation that caused crude oil prices to climb to a new high since 2008, and China's refined oil prices face upward pressure. However, entering the era of high oil prices will inevitably push up domestic CPI and PPI, and thus increase China's import inflationary pressure. The increase in basic energy prices will increase the cost of goods to some extent.

At present, China has begun to restrict the price of some contract coal prices. From the cost point of view, as the high temperature weather in the second quarter of last year hits, the peak of electricity consumption will once again bring the phenomenon of supply shortage. Since 2003, the National Development and Reform Commission has repeatedly demanded adjustments and adjustments of thermal coal prices. However, the results of the “electricity shortage” and “coal shortage” are common across historical regulatory results, and it is insufficient to limit electricity consumption for residential and commercial use. For the fresh. Since domestic energy has an external dependence of more than 50%, commodity prices and international standards are also indisputable facts. Therefore, accompanied by higher prices of foreign energy and basic bulk commodities, the domestic commodity market is characterized by external strength and weakness due to policy suppression. However, once domestic policies are slightly loosened or bad news is digested by the market, under the upward trend of basic energy prices, it naturally leads to the rise of commodity prices. Therefore, although there is policy pressure on the policy of Shanghai zinc price, there are cost-based support and strong external market forces.

Euro raises interest rates and warm winds continue to fluctuate market volatility pattern. Continued easing monetary policy has caused global inflation pressure to be unprecedented. At present, interest rates in the euro zone have risen. With the European Central Bank’s rate hike expectations supporting, the euro’s exchange rate has climbed to a 14-month high. However, the existence of debt problems in second-tier countries such as Ireland and Portugal has brought some pressure on the euro zone to raise interest rates. While Portugal recognizes the need for financial aid to repay debt, it may cause the European Central Bank to have changes in monetary policy.

At present, the market is expected to raise the interest rate in the euro area in April. However, once the euro rate increase policy is not implemented, the expansion of the debt crisis in Portugal has not become the focus of the market recently. If the rate hike is expected to fall and the debt issue becomes the focus, it will certainly support the strengthening of the US dollar and restrain the recent rising pattern of commodities. Therefore, under the background of frequent interest rate warming in the euro zone, there are changes in the rate of interest rate increase, which will lead to a change in the current trend of bulk commodities, and the pattern of market volatility will continue.

To sum up, the tightening of domestic monetary policy and the pressure of interest rate hikes have emerged, which has, to a certain extent, inhibited the rise of domestic commodities and eased inflationary pressures. However, external markets are affected by the tensions in Libya and the Middle East and the continuous weakening of the US dollar. As commodity prices show a rising trend, the overall global monetary easing monetary policy environment will allow the external and internal weaker ones to continue. Therefore, the process of raising interest rates and inflation is a game process. China and Shanghai zinc prices will continue the pattern of shocks.