According to WitsView’s latest data, MCI climbed 142.1 points from 5402.3 points to 5544.4 points from Feb. 10 to Mar. 18 2015. With the significant monthly increase 6.5% in U.S. Dollar Index, which topped 100 point mark for the first time since 2003. The index comes to a record high as the market is extremely optimistic about the interest hike and the U.S. economic recovery before the Fed’s meeting on interest rate policy, with the support of European QE and hot money flowing in. The timing for interest hike becomes a center of the debate, the slow interest hike will strengthen U.S. currency and be unfavorable to the economy, which would cause tremendous inflation pressure once the crude price stops dropping and rebounds. The premature interest hike will harm the recovering economy. After the announcement of QE, euro sharply weakens near parity with U.S. dollar. The inflation in the euro zone came to -0.3% in February, rebounding from -0.6% in January despite of staying negative. EBC expresses optimism and expects the inflation to rise to 1.5% in 2016. However, Greece’s debt issue again triggers the conflict with Germany, which may lead to Greece’s exit from the single currency zone and chain effect to other indebted member states.
As China’s National People's Congress (NPC) and National Committee of the Chinese People's Political Consultative Conference (CPPCC) end, the market doesn’t expect China’s economic growth in 2015 to surpass 7%. Premier Li Keqiang reiterates the government has ample room to implement more stimulus measure while seeing difficulties to reach the target, which shows officials’ weakened confidence. PBOC’s several moves, including lowering the benchmark interest rate by 0.25%, liberation of interest rate, and gradual removal of interest rate cap on deposit, will not only increases banks’ competitiveness but crack down the shadow banking, in order to stimulate the circulation of capital in system. Japanese economy sees signs of recovery as Cabinet Office published the revised GDP growth for Q4 last year, coming to 0.4% QoQ and 1.5% YoY. Despite the inflation sees no improvement amid the declining crude prices, BOJ sticks to the ultra-loose monetary policies and views the crude price as temporary interference, while retaining confidence in the long-term economic development of the world’s third largest economy. Global macro economy: with the USD appreciation, the U.S. is clearly becoming the only economic power in the world, while the crude price is the main factor for officials to loosen or tighten policies.
As we approach the end of Q1, the last panel shipment survey by WitsView indicates the three applications, LCD TV, monitor, and NB will see 10%, 4%, and 9% monthly growth, respectively, in March thanks to the low shipment base in February, new model launches in Spring, and sales boost during May 1st holidays in China that lifts the panel shipment. However, the uncertainties at the demand side remain. The domestic demand in China seems unclear in 2015 after the cooling down demand during Lunar New Year holidays. The Chinese government’s forerunner subsidy measure is not announced yet, but the subsidy amount will be lower than that in past years and support the panel demand limitedly. Besides, Microsoft will only offer rebate to models of the size 14”and under, seeing smaller stimulus than last year and affecting the NB panel demand. The monitor application sees inventory to be digested and lower demand. Based on WitsView’s panel price report, the IT panel prices continue to drop, and the 32” TV panel price starts to weaken. Based on the demand and supply, the glut ratio for Q2 is expected to come to 5.4%, rising 0.6% slightly from 4.8% in the previous quarter and showing the pressure in the panel industry.
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