how does the appreciation of the renminbi affect the market?
since the end of august, the rmb exchange rate against the us dollar has risen more than 3%, how to understand the exchange rate soaring economic fundamentals, monetary policy, and the impact of the market?
what is the appreciation? exchange rate is an asset price, investors expect the future economic trend of the expected decision, the main reason for the appreciation of the current market, including the chinese economy is expected to stabilize, capital outflows limited.the mid-term trend of the exchange rate is determined by the investor's expectation of future economic trends, and the short-term trend is subject to liquidity, trading behavior and so on.china's economic data to the united states, the united states to recover the bottleneck, fundamentals to support the mid-term appreciation of the renminbi; ico, corporate foreign investment supervision, and depreciation is expected to reverse the transaction after the transaction caused by negative feedback effect, boosted the short-term accelerated rise.
the impact of appreciation on the fundamentals:fdi has not improved, exports have been hit.first, the appreciation of the renminbi has led to lower export competitiveness, exports in july and august, and, in the past few months, the number of foreign investment data has continued to decline, the help of physical investment has not improved, the exchange rate is not driven by the demand for physical investment; pmi export orders are significantly down, the impact of exchange rates can not be ignored.
the impact of appreciation on monetary policy:the operating space for the reduction of interest rates.the improvement of economic data does not mean that the arrival of the new cycle, the downward pressure appears, the reduction rate will become one of the options for monetary policy.as the capital rate cuts bring capital outflows, the renminbi will be under devaluation, so the current exchange rate will help to release the devaluation pressure at that time, and provide more operational space for the reduction of interest rates.
the impact of appreciation on the market:short-term liquidity support, interim performance dragged down by the fundamentals.the appreciation of the renminbi, the outflow of funds to reduce, while attracting foreign capital to enter, liquidity in the short term to be some protection, the market benefit, due to the north of funds, qfii style more biased towards blue chips, liquor and other leading enterprises to form a good business.however, the decline in exports dragged down the fundamentals, need to pay attention to the negative impact of the economy, corporate performance decline risk.
the impact of appreciation on the industry:the middle reaches of the processing industry profit, the upper reaches of the cycle and the proportion of large exports damaged.2, the cost of imported raw materials decreased, paper, machinery and other intermediate processing industry benefit; 3, the price competitiveness of the weakening of the price of imported raw materials, 4, foreign capital inflows, first, real estate, securities and other industries benefit, and second, qfii good style of liquor and other blue-chip stocks; 5, income and liabilities directly from the dollar-denominated in the united states, the united states and other countries, impact, aviation, real estate, tourism and other industries due to the dollar debt side of the pressure to benefit from the decline in electronic components and other industries due to high proportion of overseas income damage.
market judgment:continue to recommend the gem.in the medium term, it still continues to be optimistic about the market, but pay attention to the appreciation of the renminbi to the fundamentals, part of the upstream cycle of the adverse effects of the industry.continue to recommend the gem, last week is still strong, once broke the 1900 points, the next target price of 2000 points.(10%), food and tourism(10%), communications(10%), communications(10%), communications(10%), communications(10%), communications(10%), 20%), computer(10%), media(10%), securities(20%), environmental protection(10%), agriculture(10%).
this week's topic:how does the rapid appreciation of the renminbi affect the market?
since the end of august, the yuan against the dollar experienced a strong stage of the trend, the past two weeks, the appreciation rate has more than 3%, to 6.46% high, while the dollar index fell only 1.3%.so how do you understand the impact of soaring exchange rates on economic fundamentals, monetary policy, and the market? we believe that the rapid appreciation of the renminbi, in the absence of significant improvement in domestic demand, the fundamentals or will be dragged down by the decline in exports, the short-term advantage of the exchange rate to the future rate of the central bank to cut interest rates, the upstream cycle industry is facing imports of alternative prices down the pressure.
the exchange rate is essentially the price of an asset by the investor to the future economy.trend of the expected decision.we first briefly explore the determinants of exchange rates, as well as the current round of the main reasons for the appreciation of the renminbi.as the international financial market is increasingly developed, foreign exchange trading volume has already exceeded the global trade volume, therefore, the exchange rate is no longer determined by the actual trade demand, and become the price of foreign exchange assets, medium-term trend by the investors on the future economic trend of the expected decision, short-term trend is subject to liquidity, trading behavior and other interference.although the central bank's monetary policy also affects the exchange rate trend, but in essence, monetary policy is also determined by the economic fundamentals.
china's economy is expected to stabilize the market, the limited capital outflows, devaluation is expected to lead to reversal negative feedback effect is the main reason to promote the appreciation of the current round.first of all, from the medium-term trend, this year, china's macroeconomic data has improved significantly, the market for economic stabilization is expected to begin to strengthen, and the united states experienced a strong recovery, the stack of the federal reserve, concerns, uncertainty began to increase, the relative changes in fundamentals make the rmb against the dollar formed a trend of appreciation; second, the recent hurricane situation is also affected by short-term liquidity and trading conditions, whether for a series of virtual currency supervision policy investment, or the attitude of enterprises to invest abroad from the encouragement into a cautious, have hindered the capital outflow, short-term reduction of the dollar demand for assets; in addition, since the beginning of the rmb depreciation is expected to prevail, and the first half of the dollar depreciation process in rmb not a corresponding appreciation, making the appreciation trend appears, a large number of short transactions had to stop, forming a negative feedback utility, to accelerate the short-term appreciation rate.foreign trade has not changed, exports are affected, and appreciation is affecting economic fundamentals or economic fundamentals or(a) resulting in a negative impact.although the market for china's economic fundamentals are expected to improve, pushing up the rmb exchange rate, but the shadow of the real economy or to see foreign investment and export projects.data show that foreign investment in recent months, the data is not ideal, so push the exchange rate also mainly stay in the foreign exchange investment level, did not implement the entity investment level; and exports, july and august exports grew to 11.2% and 6.9%, down sharply from the first half of the year, pmi new orders index fell from 52 in may to the current 50.4, in the absence of major changes in global demand, exports weakened or with the appreciation of the renminbi certain relationship.in addition, the appreciation of the case, due to the price of raw materials such as commodities become cheaper, in the current upstream commodity prices soaring background, is conducive to domestic processing enterprises to improve profits, but the downstream demand has not completely improved, this part of the impact on the fundamentals improved or will be limited.
a substantial appreciation of the establishment of exchange rate advantage, reduce the rate cut interest reserve space.in the medium term, the chinese economy still has some downward pressure, the recent data improvement has not changed the trend of the macro cycle, once the fundamentals of pressure hit, down the rate cut is very likely to take monetary policy.the federal reserve into the interest rate cycle, cut interest rates will bring capital outflow, making the yuan bear the pressure of devaluation.at present, the rmb in an appreciation stage, short-term sharp rise also established a certain buffer base, making the rate of decline after the exchange rate has a larger higher space.from the historical situation, 08 years, 12 years, 15 years three typical rate cut and downgrade stage, the rmb exchange rate is still in the appreciation range, or in the early stage of a larger stage of appreciation.
the impact of the market, short-term liquidity support, interim performance by the basic face dragged.rmb appreciation, the outflow of funds to reduce, while attracting foreign funds to enter, such as the north capital, qfii access, liquidity in the short term to be some protection, whether it is the bond market, or the stock market, are formed good.in particular, due to qfii and other financial styles tend to blue chips, is conducive to white wine and other white goods.however, the above analysis points out that due to the decline in exports, fundamentals will be a negative impact, thus affecting the company's performance, in the medium need to guard against such risks.according to the logic of our medium-term strategy report, in the economic downturn, the new economy, consumption, as the representative of the gem relative to the motherboard will have a better flexibility, with a certain relative advantage.industry, the middle processing industry profit, upstream cycle and export ratio of large-the industry is damaged.the impact of rmb appreciation on the industry, mainly to see the industry's participation in import and export and in the industrial chain position, probably divided into five categories:first, the upstream part of the production of raw materials industry cycle, the appreciation of the price of imported raw materials, industry, high prices and high profits will face pressure, such as coal, colored, etc.; second, the middle processing industry, imports of raw materials prices, reduce raw material procurement costs, the formation of profit support, such as paper, machinery, etc.; third, such as real estate, securities, etc., at the same time, qfii and other funds into the more favorable liquor, home appliances, etc., and so on, and so on.blue-chip; fifth, the main income or liabilities directly to the dollar-denominated industries, such as aviation, tourism and other foreign exchange is its cost side, so benefit, and electronic components and other foreign exchange is its income, so damaged.see the table below.
(chief strategy analyst)
worked in citic securities, and nominated 2014 new fortune best strategy analyst; before joining citic securities, he also in the national information center, xiangcai securities, securities and other units engaged in macro research, and served as the chief macro analyst, representative of the"inventory cycle""production cycle"series of topics; the establishment of a macro cycle based on the large-scale asset allocation and stock market analysis framework, the end of 2015 has accurately predicted the macro cycle, large class assets and a-share market direction, 2016 to join the bank of china international.
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