US Housing Disturbance Pushes Up Core Services in April, Market Expects Recovery Ahead Despite Unresolved Real Constraints, Domestic Exchange Rate Equipped with Tools to Prevent Overshooting --- May 13 Macro Dawater (Odaily)
April CPI increased by 0.6% month-on-month, meeting expectations, but rose to 3.8% year-on-year, higher than anticipated. Core goods inflation has eased, while core services saw a significant acceleration due to a one-off housing sub-item surge, which is expected to subside in the future. High oil prices combined with strong employment from January to April have set a higher threshold for the Federal Reserve to cut rates in the near term.
The current market is in an intermediate stage where expectations are recovering ahead of real economic constraints being lifted. After U.S.-Iran approached a preliminary peace framework, both stocks and bonds rebounded and the dollar weakened. However, factors such as actual navigation through the Strait of Hormuz, insurance fees, and long-term oil prices have not fully normalized; oil prices are more likely to fluctuate at high levels.
The People’s Bank of China is shifting its monetary policy from “aggregate expansion” to “structural optimization.” In terms of interest rates, the PBOC has guided rates to a reasonable level through sustained liquidity withdrawal. Regarding exchange rates, the PBOC still has tools such as the countercyclical factor and foreign exchange deposit reserve ratio to continue guarding against excessive exchange rate fluctuations.
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