The consolidation index has skyrocketed!
This afternoon, the intraday increase of the main contract of the consolidation index (European line) expanded to 15%, reaching a high of 3222 points. After the National Day holiday, the consolidation index (European line) futures (EC) continued to rise. On October 16th, the highest price of the main contract of the consolidation index (European line) broke through 2900 points, setting a new two month high. After a slight adjustment on the 17th, it surged again for two consecutive trading days.
So, what are the positive stimuli? Firstly, Maersk has issued a notice of price increase for the European route in November, stating that prices will rise to $2925 and $4500 starting from November 4th. Compared to the latest 43 week opening prices of $1500 and $2600, the increase is 95% and 73%, respectively, which has stimulated market expectations for price increases; Secondly, the geopolitical conflicts in the Middle East have led to ongoing detours.
Soaring by 15%
On the afternoon of October 21st, the main contract of the consolidation index (European line) saw an intraday increase of 15%, reaching a high of 3222 points. The closing price still rose 14.67%, closing at 3197.7 points.
The index has performed very well since October. Previously, except for the October contract, all other contracts hit the daily limit up for two consecutive days, indicating the strong bullish sentiment in the market. On October 16th, the highest price of the main contract of the consolidation index (European line) broke through 2900 points, setting a new two month high. After a slight adjustment on the 17th, it surged again for two consecutive trading days.
This variety has shown outstanding performance recently, partly due to price increases. After the close of October 9th, Maersk and Hapag Lloyd's "Gemini" cooperation plan announced that it would continue to circumnavigate the Cape of Good Hope from February 2025, breaking market expectations for the resumption of navigation in the Red Sea. On the morning of October 10th, CMA took the lead in raising spot prices, becoming the second major airline to adjust prices after Ocean Alliance on October 5th. After the closing of the day, Maersk announced a price increase for the November European line, with prices rising to $2925 and $4500 starting from November 4th. Compared to the latest 43 week opening prices of $1500 and $2600, the price has increased by 95% and 73%, exceeding market expectations. Secondly, it is due to geopolitical conflicts. Recently, geopolitical conflicts in the Middle East have led to ongoing detours, with tensions between Israel and Palestinian Hamas, Yemeni Houthis, Lebanese Hezbollah, and Iran. Geopolitical conflicts continue, and the Red Sea detours will continue.
Economic situation
In fact, the European line is also an important indicator reflecting imports and exports. In August 2024, the year-on-year growth rate of China's monthly exports rebounded from 7% last month to 8.7%. Among them, exports to the European Union and Latin America have grown rapidly.
According to CITIC Securities, in August alone, the three major trading partners (the United States, the European Union, and ASEAN) drove stable growth, while export growth rates in other regions declined significantly. The export driving rate of the top three trading partners continued to rise from 3.92% last month to 4.24%; The export driving rate of the new three major trading partners (Russia, Africa, and Latin America) has decreased, from 1.14% last month to 0.56%; The export driving rate of East Asian countries and regions has decreased from 1.44% last month to 1.20%; The export driving rate of other countries and regions decreased from 1.61% last month to 0.73%.
However, the macroeconomic performance is tending towards differentiation. On the Chinese side, benefiting from the recent package of stable growth policies, especially the intensive implementation of the trade in program for consumer goods in various regions, and the entry of the manufacturing industry into the autumn production peak season, the manufacturing PMI recorded 49.8 in September, an increase of 0.7 percentage points compared to the previous month; On the European side, the manufacturing PMI reading fluctuated marginally, while the German PMI reading remained relatively weak. France and Spain performed better than Germany, but signs of stabilization at the bottom of the German economy are not yet stable, with the September PMI index further falling to 40.6. The manifestation of the role of the European Central Bank's monetary policy transmission in driving economic growth will take time.
On October 17th local time, the European Central Bank announced that it would lower interest rates by 0.25 percentage points to 3.25%. This is the third time the European Central Bank has cut interest rates this year and its second consecutive rate cut. The background of the interest rate cut is the easing of inflation, coupled with rapidly rising concerns about the economic trends in the region. There is a high possibility that the European Central Bank will continue to cut interest rates in the future to support the economy.