China and US Economic Surprise Indexes Rise While Europe Declines; Price Hikes Benefit Upstream Sectors While Squeezing Downstream, RMB and Hong Kong Stocks Diverge Due to Tight Liquidity --- 0303 Macro Express

The overseas liquidity environment remains tight, with the widening SOFR-OIS spread indicating a marginal increase in financial market risks. The economic surprise indices for both China and the US have rebounded, driven respectively by positive US data and new housing policies in China, while the European economic surprise index has declined, mainly due to concerns over energy supply and legislative delays.

A wave of price increases has begun in commodities, pushing up the year-on-year growth of domestic PPI and triggering profit restructuring. Upstream sectors such as oil & gas and non-ferrous metals are benefiting, but downstream and midstream manufacturing industries are under pressure from high costs and weak demand. The profit pressure on equipment manufacturing, consumer goods manufacturing, and public utilities will be relatively significant as a result.