RMB Depreciation Is A Major Drag On Asset Price Rise.

The decision of the first fed interest conference in the era of P Yellen decided that on the one hand, the amount of QE reduction would continue. The amount of monthly asset purchases of the US Federal Reserve would be reduced from 65 billion US dollars to US $55 billion. On the other hand, the Federal Reserve gave up the threshold of 6.5% unemployment rate.

At the same time, Yellen's statement about the timing of raising interest rates is beyond market expectations. It is expected that interest rates will be raised for the first time in 6 months after the end of the bond purchase plan.

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The US Federal Reserve's attitude towards QE and monetary policy and the recent warming of US data have further verified our view that the developed economies represented by the United States are in the rising stage of cyclical economic recovery, and the negative effects of weather and other factors in the short term do not affect the process of recovery.

Because the driving force for economic recovery lies in the demand for leveraged leveraged residents and enterprises.

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< p > for the emerging markets, the recovery of the US and the tight currency, the strength of the US dollar has led to the rising volatility of emerging currencies and markets. The emerging market central bank [micro-blog] is facing the dilemma of exchange rate stability and growth.

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< p > taking China as an example, the central bank has to shift its monetary policy from tight to neutral in order to protect growth. After the Spring Festival, the downward trend of market interest rates has been derogated from the large RMB (6.2376, 0.0102, 0.16%) after the Spring Festival. There is obviously a causal relationship.

The interest rate will be reduced due to the growth of interest rate, which will lead to a narrowing of the US dollar interest rate and a devaluation of the RMB.

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< p > in the first quarter of this year, the macro data of China in the first quarter of this year were significantly weaker than the market expectations. From the three elements of the < a href= "//www.sjfzxm.com/news/index_cj.asp" > /a > >, the economic growth was poor, interest rate differential and inflation were bad. The former two deteriorated significantly, and the pressure of RMB depreciation increased. As the asset class of high beta, the stock market in the US began to adjust continuously from the beginning of March, and it deviated significantly from the US stock trend.

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< p > China's < a href= > //www.sjfzxm.com/news/index_cj.asp > Central Bank > /a > after expanding RMB exchange rate fluctuation range (1% to 2%), a href= //www.sjfzxm.com/news/index_cj.asp > RMB > /a > has a rapid depreciation, which once exceeded 6.23.

Since February, depreciation has exceeded 3%.

The cancellation of arbitrage and structured products will further strengthen the devaluation of RMB.

Take last year's target redemption forward as an example, through margin trading, the renminbi can appreciate every month when it appreciates, but once the exchange rate falls below the "lower level protection", the loss will expand rapidly.

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< p > Morgan Stanley estimates that the "lower file protection" is mostly located near 6.20. Since 2013, the total value of the products sold by the banks may be around us $350 billion, and there should be another $150 billion left at the moment.

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In P July 2005, China began to appreciate RMB and foreign exchange reserves rose from 800 billion US dollars to US $3 trillion and 800 billion.

At the same time, asset prices, including real estate prices, appear on a large scale price revaluation.

Historically, the depreciation of the renminbi will be a strong drag on asset prices in China, which are mainly real estate and share prices may also be affected.

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