Before reading this article, please click "Follow", which is convenient for you to discuss and share, and can bring you a different sense of participation, thank you for your support!
U.S. inflation fell to 3%, the renminbi appreciated by nearly 500 points, and the dollar began to buy China's core asset base.
The latest US inflation data for June has fallen to 3%, close to the Fed's target of controlling inflation by 2%-3%, which means that even if the Fed raises interest rates again, the overall level and frequency. Actually, it will all be over. Affected by this news, the RMB reversed the previous trend of continuous depreciation, and the offshore RMB appreciated strongly intraday. At one point, the intraday appreciated by nearly 500 points. Cyclical swaps mean that China's core asset prices will trend upward, so what are the opportunities for appreciation? Whether the renminbi will become a trend in this regard, let's look at it from a different perspective.
minister
The U.S.-China business cycle began to swap
First, China's economic cycle is very different from that in Europe and the United States. When countries led by the United States start raising interest rates due to inflation and other reasons, China generally begins to lower interest rates. This is mainly due to China's special status as a manufacturer and its large foreign exchange reserves as a factor, because if the United States, as the world's largest consumer, starts raising interest rates, it means that global demand will fall. Start to rise. Decrease. At the same time, global dollar capital will begin to flow back to the United States, and international trade settlement will become difficult due to the lack of dollars, resulting in a decline in global trade, which is not conducive to export orientation.
minister
China and other manufacturing countries.
The rate hike cycle ends
In order to prevent this risk, on the one hand, we use more than $3 trillion of foreign exchange reserves to maintain the exchange rate at a relatively acceptable level under the premise of ensuring relatively stable exports, thereby reducing foreign capital outflow. Capital; On the other hand, the monetary interest rate tool is used to stimulate the recovery of industries such as consumption and real estate by cutting interest rates. If we stop raising interest rates, then our monetary policy will have more room to regulate the economy, because stopping the dollar rate hike or other rate cuts means that the renminbi will start appreciating.
The renminbi continues to lower interest rates
Second, if the renminbi begins to appreciate, it means that the price of assets denominated in yuan will rise, and the high dollar will also take the opportunity to buy lower core assets than China, and what we should do is to seize the opportunity here on the right and invest moderately, so which core asset prices in China will rise, and what opportunities can we seize?
I personally believe that there are three main aspects:
First of all, bank stocks, liquor stocks and technology stocks that are more affected by the RMB exchange rate can benefit significantly, and the logic is relatively easy to understand, because domestic banks are mainly involved in RMB business. When the renminbi appreciates, it means that the bank's intangible assets also increase, and in the case of lower interest rates, the cost that the bank has to pay is also reduced, thus directly benefiting the bank; Wine and technology correspond to money consumption and liquidity.
Generally speaking, when the dollar appreciates at the end of the rate hike, at the beginning of the rate cut, it means that global consumption will increase, monetary easing is a direct benefit for the technology industry, which is particularly burning, and the potential recovery of consumption is also conducive to the growth of technology stocks.
Stock market opportunities
Second, the real estate sector can be a potentially beneficial asset, which is particularly relevant to economic recovery. Some say China's real estate industry is over. In fact, this statement is not entirely true. Even without discussing the financial policy of real estate, the need for improved housing will always exist, and the release of demand for good housing requires economic recovery and growth.
When the economic cycle between China and the United States begins to reverse, the Chinese economy will open up certain development opportunities, local governments at all levels will begin to continue to bail out real estate, and real estate in some cities can help restore opportunities.
Internationalization of the RMB
Third, the appreciation of the RMB is also very conducive to the internationalization of the RMB. In addition to the progress of RMB internationalization, more and more countries are willing to use the RMB. More importantly, the value of the renminbi should remain stable even if it fluctuates to a certain extent. Appreciation, because one of the important reasons why other countries hold currencies as foreign exchange reserves is whether the ownership of this monetary asset can appreciate in value.
minister
The dollar can preserve and increase the value of the country holding the dollar, so we must also do this, only the same function can ensure the level of internationalization of the yuan.
Changes in exchange rates
Finally, whether the trend of RMB appreciation will start, I think not in the short and medium term, but certainly in the medium and long term. In the next 3-6 months, the exchange rate will remain volatile, there is no obvious trend, but in the medium and long term, the RMB will definitely start to appreciate. In addition to the economic cyclical factors in China and the United States, more important is that the internationalization of the renminbi is a necessary move.
Disclaimer: If the content of the article involves the content of the work, copyright pictures or other issues, please contact the author within 30 days, if the reflection is true, we will delete the responsible article as soon as possible. The article is for reference only and does not constitute any investment or application advice.