The second full-scale landing in the year is expected to stabilize

On September 16, the second comprehensive landing was completed in the year, releasing about 800 billion yuan of funds. On that day, the stock market opened high in the morning, and the heat dissipated in the afternoon. Shanghai and Shenzhen closed down slightly. The GEM index rose 0.22%. The exchange rate of the RMB has not been impacted. The intermediate price has risen by 189 basis points and the onshore RMB has risen by 242 basis points. However, the offshore RMB has fallen slightly due to the rebound of the US index.

After benchmark reduction, the market will turn its attention to interest rate reduction. There are also several moments this week related to interest rates: the expiration of the 265 billion yuan MLF (medium-term lending facility) operation on Tuesday (September 17), the latest interest rate resolution issued by the US and Japan central banks on Thursday (September 19) Beijing time, and the second quotation of the new LPR on Friday (September 20). Under the combined internal and external factors such as the Fed's probable rate cut and the financing difficulties of small and medium-sized enterprises in China, the insiders believe that the "interest rate cut" window period has arrived in China, and there is room for MLF interest rate reduction. On September 16, the Shanghai and Shenzhen stock markets rose and fell. As of the close, the Shanghai index fell 0.02%, Shenzhen index fell 0.02%, Shenzhen index fell 0.02%, GEM index rose 0.22%.

This is in contrast to the collective rise of the three major A-share indexes in the previous week. Liu Cheng, Ph.D. supervisor of the Department of Financial Engineering, School of Economics and Management, Beijing University of Science and Technology, said that there is a rule in the domestic stock market that the good news overdraft ahead of time, after the stock market has risen, it has responded to the reduction of the benchmark. He believed that although the Shanghai and Shenzhen index fell slightly on September 16, it still had a lot of gains compared with the previous period, which should be said to be a steep decline.

Influenced by the news that the production capacity of the world's largest oil company had dropped by 50% the previous day, the mining service and oil mining sector had the highest growth on the 16th day, with the closing gains of 4.2% and 1.98% respectively. PetroChina and Sinopec increased by 3.5% and 2.69% respectively.

The exchange rate of RMB was also affected by the wind. After a cumulative rise of nearly 400 basis points in the previous week, the onshore RMB closed at 7.0640 on September 16 and appreciated by 242 basis points. The median price increased 189 basis points to 7.0657 on that day. Beijing News reporter from China Foreign Exchange Exchange Trading Center saw that the increase is also the highest in recent two months. What is the reason why the exchange rate has not been impacted by the benchmark reduction? Liu Cheng believes that the rise of onshore RMB is related to the ECB's interest rate reduction and the easing of Sino-US trade situation. With the easing of negotiations, the situation of foreign exchange receipts and expenditures has rebounded. With the strengthening of counter-cyclical adjustment, the pressure of RMB exchange rate decline has been alleviated. On September 12, President Trump announced that he would postpone the tariff imposed by China on October 1 to October 15. Affected by this, the offshore RMB also showed an overall upward trend. The offshore renminbi rose 599 basis points last week and has rebounded more than 1600 basis points since September. Judging from the performance of September 16, the dollar index rose short-term on that day and the offshore RMB exchange rate fell to 7.0619 at 1720.

CITIC Securities believes that with the ECB restarting quantitative easing (QE) and some European countries'expectations of "fiscal easing", weak export performance in Europe is expected to improve after the fourth quarter, thus supporting a slight decline in the dollar index; and from the domestic point of view, benefiting from the recent increase in counter-cyclical adjustment policies, it is expected that the fourth quarter. The quarterly economy will stabilize and improve, thus helping the RMB exchange rate to stop falling and recover in the second half of the fourth quarter. It is expected that the US dollar-RMB mid-price will operate mainly in the range of 7-7.3 in the fourth quarter, and it is expected to remain within 7.2 at the end of the year.

At 2 a.m. Beijing time on September 19, the Federal Reserve will announce its interest rate resolution, which is expected to cut interest rates at a probable rate. On the same day, the central banks of Japan, Switzerland, the United Kingdom, Brazil, Indonesia and Norway will also issue interest rate resolutions. Wen Bin, chief researcher of Minsheng Bank of China, believes that reducing the financing cost of real economy can not only rely on quantitative tools such as benchmarking or improving LPR mechanism, but also on the urgency and necessity of reducing policy interest rates. It is suggested that the central bank should continue to reduce the amount of MLF after its expiration date of 265 billion yuan on September 17, and reduce the one-year MLF interest rate by 10 BP to 3.2%. "Lowering the benchmark will help reduce the spread of banks by 5 BP, so it is expected that the one-year LPR interest rate of the new issue (with MLF as the anchor and will be quoted on September 20) will be 4.1%. Under the background of interest rate reduction by the global central bank, the market-oriented reform of China's LPR formation mechanism officially landed on August 20. According to the last quotation, the one-year LPR is 4.25%, 10 BP lower than the benchmark lending rate, 6 BP lower than the original LPR; the five-year LPR is 4.85%.

Liu Cheng suggested that, while interest rates were lowered, attention should also be paid to whether the financing costs of SMEs at the "nerve endings" were really reduced.

He said that due to deleveraging in the past two years, the financing problems of some small and medium-sized enterprises have not improved. Many rural and urban commercial banks have bad debts. They are unwilling to lend to small and medium-sized enterprises because of avoiding risks. Some enterprises turn to illegal channels such as usury, and it is not good to do usury under financial restructuring.

He described that the liquidity released by the central bank is now in the "main road" to drain water, but the branch "ditch" has not been repaired, or there is no "water source" flowing to small and medium-sized enterprises, so there is an urgent need to dredge the monetary transmission mechanism. On the other hand, we should also strengthen the construction of the entity credit system. Many small and medium-sized enterprises can not reach the lending standards of banks and financial institutions. Therefore, we should solve the credit problems in combination with the construction of the credit system and make the people realize that credit is valuable.