Daily Macro Economy News on June 13

June 13, 2023

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International Crude Price Trend and Exchange Rate of RMB to USD Trend

Domestic News

1. State leaders said at a meeting with the Honduran president that China is willing to start the process of negotiating a free trade agreement with Honduras as soon as possible

2. NDRC has issued 7.3 billion yuan of central investment in 2023 on work relief

3. After a strong recovery in the first quarter, China's economy fell short of expectations in April. With the base effect weakening and the repair momentum slowing down, how the economic data performed in May attracted the market’s attention

4. Rio Tinto and China Baowu Steel Group have signed a Memorandum of Understanding to explore a range of new industry-leading projects in China and Australia, aimed at helping the steel industry value chain to decarburization

International News

1. New Zealand Prime Minister Chris Hipkins has announced that he will lead a trade delegation to China at the end of June. He is also scheduled to visit Brussels in July to negotiate a free trade agreement with the European Union

2. Oracle founder worth more than Warren Buffett and Bill Gates in the wealth movement amid the AI frenzy

3. US inflation rate release is imminent, Citibank warned that traders may have underestimated the downside outlook for inflation

4. IGAD proposes both leaders in the Sudanese Conflict meet in two weeks

More detials:

Domestic News

1. State leaders said at a meeting with the Honduran president that China is willing to start the process of negotiating a free trade agreement with Honduras as soon as possible

At a meeting with the President of Honduras, the Chinese leader said that China is willing to start the process of negotiating a free trade agreement with Honduras as soon as possible. It is willing to work with Latin American and Caribbean countries, including Honduras, to promote the construction of the China-CELAC Forum (CCF) and the overall cooperation between China and Latin America. Xiomara Castro said he is looking forward to strengthening cooperation with China in the fields of trade, investment, infrastructure, telecommunications, energy, science, and technology.

2. NDRC has issued 7.3 billion yuan of central investment in 2023 on work relief

The National Development and Reform Commission (NDRC) has issued 7.3 billion yuan of central investment on work relief in 2023, accounting for more than 90% of the annual investment scale to be issued to support more than 20 provinces in central and western China to implement more than 2,000 rural small and medium-sized infrastructure construction projects.

According to China Business News, after a strong recovery in the first quarter, China's economic data in April fell short of expectations. With the base effect weakening and the repair momentum slowing down, how the economic data performed in May has attracted the market’s attention. The National Bureau of Statistics (NBS) will release data on industry, consumption and investment on June 15. The People's Bank of China (PBC) will also release financial data such as social finance and credit shortly. Agencies expect that the low base effect will decay due to the improvement of the epidemic situation in the same period of the previous year, and the performance of the main economic growth data in May may have fallen back year-on-year.

Rio Tinto and China Baowu Steel Group have signed a Memorandum of Understanding to explore a range of new industry-leading projects in China and Australia, aimed at helping the steel industry value chain to decarburization

International News

New Zealand Prime Minister Chris Hipkins has announced that he will lead a trade delegation to China at the end of June. He is also scheduled to visit Brussels in July to negotiate a free trade agreement with the European Union

2. Oracle founder worth more than Warren Buffett and Bill Gates in the wealth movement amid the AI frenzy

Oracle (ORCL.N) founder Larry Ellison is worth more than Bill Gates and Warren Buffett at $145.6 billion, making him the fourth richest person in the world, according to the Forbes billionaires list. This comes after Oracle's earnings report showed that revenue from its cloud computing business jumped in its fiscal fourth quarter, driving revenue above expectations and indicating that the software maker is benefiting from growing demand for AI workloads. The company's after-hours shares rose more than 4 percent, with a market value of more than $320 billion, continuing to hit a new record high. Oracle said its cloud application sales jumped 45 percent to $3 billion. Oracle has been focused on expanding its cloud infrastructure business to more strongly compete with Amazon, Microsoft and Google, all of which have seen slowing growth recently. Oracle founder Larry Ellison said that various large language model development companies have recently signed more than $2 billion in cloud contracts. According to him, "Oracle's Gen2 Cloud has quickly become the preferred choice for running generative AI workloads."

3. US inflation rate release is imminent, Citibank warned that traders may have underestimated the downside outlook for inflation

On June 13^th, US CPI for May will be released on Tuesday, and Citigroup strategist Raghav Datla said bond traders may have underestimated the magnitude of the inflation pullback. He noted that current inflation expectations for the next few years are already higher than they were in early 2023, despite a tightening financial environment, lower year-on-year inflation and higher unemployment and jobless claims. Therefore, on the eve of the May inflation data release, Citigroup's strategy team does not believe that the market has fully reflected the downside risks to inflation, after which the Federal Reserve will announce its policy decision on Wednesday. Traders are betting that officials will leave rates unchanged, remaining at 5%-5.25%, which would be the first time in 15 months. Still, swap contract trading shows the Fed will raise rates by about 24 basis points by the July meeting.

4. IGAD proposes both leaders in the Sudanese Conflict meet in two weeks

The Inter-Governmental Authority on Development (IGAD) has proposed that the leaders of both sides of the Sudanese conflict, Abdel Fattah Abdelrahman al-Burhan, the Sovereign Council Chairman and SAF Commander-in-Chief, and Mohamed Hamdan Dagalo, Rapid Support Forces leader should hold talks on a ceasefire within two weeks to end the armed conflict in Sudan, said Malik Ager, deputy chairman of the Sovereign Council of Sudan. Malik Argel said, For its part, the Sovereign Council of Sudan welcomed the proposal by IGAD. The clashes between the Sudanese Armed Forces and the Rapid Support Forces erupted on April 15 in the capital Khartoum and other places, and the conflict continues to this day.

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