CICC: CPI Rebounded Year-On-Year, Reflecting The Sustainability Of The Spring Festival Dislocation.

In March 10th, the Statistics Bureau released data showing that in February 2015, the national consumer price level rose 1.4% year-on-year. Among them, cities rose 1.5%, rural areas rose 1.2%, food prices rose 2.4%, non food prices rose 0.9%, consumer goods prices rose 1.1%, and service prices rose 2.2%. In 1-2 months, the national consumer price level increased by 1.1% over the same period last year.

In this regard, CICC believes that CPI The year-on-year growth rate rebounded, reflecting the dislocation factor of the Spring Festival. CPI grew by 1.4% in February, up 0.6 percentage points, higher than the 0.9% and 1% expected by the market. The Spring Festival dislocation factor is the main reason for the significant rebound of CPI year-on-year growth. The price of fresh vegetables, fresh fruits and pork has increased considerably, reflecting the temporary factors of the Spring Festival. But from the CPI season to the trend of the ring, CPI downward pressure still exists.

PPI deflation deepened year by year, narrowing the decline. February PPI Year-on-year growth of -4.8%, down 0.5 percentage points, lower than the market expected -4.3%. In February, the PPI growth rate was -0.7%, rising from the previous month, ending the trend of the decline of PPI in August, which mainly reflects the low oil price stabilization. However, due to the lag year over year, PPI growth in March is expected to remain below -4.5%.

China Gold said the deflation risk faced by the general price level is still accumulating, increasing the pressure of monetary policy easing. The CPI rebound mainly reflects the Spring Festival factor and does not have continuity. High frequency data showed that food prices did not slow down in March. PPI although the decline in the annulus ratio narrowed, deflation remained larger than before. This makes the GDP deflator reflecting the general price level rise significantly from positive to negative (0.4% in the 4 quarter of 2014), indicating that the Central Bank continues. Rate cut The pressure drop will increase correspondingly.

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The first interest rate cut by the central bank in March 1st has been implemented since March 1st, and the upper limit of the floating interest rate of the deposit interest rate has expanded from 1.2 times to 1.3 times.

This time the central bank has cut interest rates at the same time, "extending the upper limit of the floating interest rate from 1.2 times to 1.3 times" is a bright spot. This indicates that the central bank is continuing to play a regulatory role in controlling the interest rate on the macro economy while the other side is pushing ahead with the marketization of interest rates. In fact, it is weakening the power of controlling interest rate control measures.

One year deposit benchmark interest rate adjusted for 2.5%, up 1.3 times after 3.25%, 3.25% percentage points before the adjustment of 2.75% of the benchmark interest rate 3.3% times, only a 0.05 percentage point difference. If commercial banks float to the top, the nominal interest rate cut this time by 0.25 percentage points is actually only 0.05 percentage points.

Will commercial banks float to the top? The answer is yes.

After the adjustment of interest rates began in March 1st, Zhejiang Merchants Bank, Hengfeng bank, Nanjing bank and Jiangsu bank took the lead in putting all the deposit interest rates on the basis of the central bank's benchmark interest rate, which rose 30%. Among them, the 5 year deposit rate of Zhejiang Merchants Bank was 5.4% higher. The five major trades in the establishment of diplomatic relations between the workers and peasants have gone up, but have not yet reached the top.

However, I believe that commercial banks that do not go up to the top will rise to the top sooner or later. Because the reason why the big banks did not go up to the top is mainly that their internal funds are relatively prosperous, and a certain period of observation is safe. However, the competition for low-cost capital deposits is fierce. In the case of deposit interest rate differentiation, depositors will have three goods and which interest rate will remain high. This will inevitably lead to a large loss of bank deposits without going up or up. Before long, these banks will be unable to withstand the pressure of the loss of deposits and will surely float interest rates to the top.