[Da Mo: If oil prices continue at $120, the drag on consumption will be more significant] According to Golden Finance, on April 15th, the ongoing conflict in the Middle East and the rise in oil prices have affected the Asian economy. Chetan Ahya, Chief Economist of Morgan Stanley Asia, stated that consumption growth in Asian economies (including China) is gradually improving before geopolitical tensions escalate. With rising energy prices, disposable income will be weakened in the short term, but policies and savings may serve as a buffer. He pointed out that if the physical settlement price of oil prices falls below $90 per barrel in the next 3 to 4 months, the industrial cycle is expected to accelerate again, thereby supporting capital expenditures, employment, and consumption. However, if oil prices continue to remain at the level of $120 per barrel, as fuel prices further rise, consumers will adjust their consumption patterns, and the drag on consumption may become more significant. The team led by Xing Ziqiang, Chief Economist of Da Mo China, pointed out that since the geopolitical situation escalated, the consumption growth of sectors related to China's "trade in" program has continued to slow down. The team explained that given China's relatively low dependence on energy imports, low inflation threshold, and regulated fuel pricing, the direct drag of rising energy prices on household consumption may be limited. However, the increase in input costs may compress the profit margins of downstream enterprises, thereby dragging down wage growth and employment, which in turn will hit consumption, especially in the context of a relatively weak starting point for wage growth.