The Day at a Glance | March 1 2022

The Top

*China`s economy accelerated during February; monetary and fiscal stimulus could start taking effect.

*OPEC+ will maintain its plans to gradually increase crude oil production, despite the increase in oil prices because of Russia`s invasion of Ukraine.

*Inflation in Germany accelerated to a 5.5% annual rate during February (5.4%e.).

Economic environment

Improvement in China`s economy. According to the most recent economic activity figures, China`s pace of growth accelerated during February. Official PMIs showed a moderate acceleration in manufacturing activities (50.2), which prevented the economy from shrinking – as expected by analysts (49.8e.); while services and trade logged a faster rate of acceleration during the month (51.6). Figures confirmed an improvement in China`s economy after the Omicron variant`s impact, as well as New Lunar Year celebrations, while stimulus measures carried out by fiscal and monetary authorities are starting to take effect. Demand recovered during the month and was backed by a more positive sentiment among manufacturing businesses. Most of February`s growth came from large and medium sized companies as indicators show that small businesses are still deteriorating. In the manufacturing sector, growth is still being limited by the scarcity of raw materials and bottlenecks in international trade. Price sub-indices logged increases, which suggests that inflationary pressures could rise. China`s Central Bank is expected to maintain a flexible stance to stimulate the economy and counter the slowdown seen in mid-2021; even though stimulus would focus on the recovery of small and medium sized businesses. However, February`s figures seem to point to the idea that the worst part of the country`s slowdown could have already passed.