May 16, Friday

High-Level Voices:
The State Council held a meeting to promote the strengthening of the domestic economic cycle. Premier Li Qiang emphasized at the meeting the need to deeply understand and accurately grasp the current economic situation, placing the strategic focus of development on strengthening the domestic economic cycle.

Overall Feeling:
Yesterday, both A-shares and H-shares saw a decline in trading volume and stock prices, with the median decline at 0.97%. Although previous data releases had been glossed over-such as the declining M1 being largely concealed and the loan data hitting the second lowest level since 2010 going unmentioned-the financial data for April, which was far worse than market expectations, still triggered market pessimism.
Negative inflation has reached a point where it can no longer be hidden.
Using monetary policy to address deflation has never been effective, yet it always takes a long time to confirm its ineffectiveness.