The global interest rate cuts, the yuan will stabilize
Whether the US cuts interest rates or not has a great impact on investment deployment. The author expects US GDP growth in the second quarter will be slower than the first quarter. Earlier, Fed Chairman Powell mentioned that the economic growth countercurrently will adopt “appropriate” measures to maintain the US economic growth as appropriate, and the words highlight the worries about the economic outlook. The US economic growth has great uncertainty. Although the non-agricultural data released earlier this month performed well, it was less than expected last month. The data is highly volatile. The employment situation is not certain, causing no growth for the US economy. Certainty.
Pedestrian short-term interest rate cuts are low
In the capital market deployment, investors have already estimated the investment in accordance with the estimate of the interest rate cut cycle in July. If you suddenly do not cut interest rates in July, it will cause investors to lose their hands. However, as the economic data has not significantly weakened, as the “preventive interest rate cut”, the author estimates that the Fed will cut the interest rate for the first time in July by 25 basis points. It is important to be wary that the investment market cannot expect excessive interest rate cuts. At the same time, compared with the previous rounds of interest rate cuts, major economies such as Europe and Japan are already at zero or negative interest rates, and the impact of interest rate cuts has been marginalized. What everyone is facing will be a very weak and interest-reducing cycle with limited incentives.
Assuming the Fed’s interest rate cut cycle is confirmed, the RMB exchange rate will receive a certain degree of support. With the resumption of Sino-US trade negotiations, the risk factors involving the renminbi will be alleviated, the panic about the renminbi will be eased, and the economy will gradually stabilize. It is estimated that the renminbi will stabilize in the second half of the year.
Many investors are concerned about whether the PBOC will cut interest rates? The author estimates that the probability of a short-term interest rate cut is slightly lower. Even if the Fed cuts interest rates, the need for the PBOC to lower the benchmark interest rate is small. At present, the problem of the mainland currency appears to be “conducted” rather than “total”. If the PBOC cuts interest rates, it will further stimulate the real estate market, but it will be difficult to boost manufacturing and consumption. Although the total amount of money in the Mainland will remain adequately accommodative, the focus will be on structural adjustment, and targeted reduction is one of the options.