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Short of RMB begins to fall apart as world debates over oil

Time: January 9, 2020 15:41:13 Zhongcai
Original title: While the world is still arguing about oil, shorts in the yuan have begun to fall apart, trillions of dollars will pour into China on January 9, and the dollar ’s short-term refresh against the offshore yuan hit a five-month low of 6.9198, a decrease of 0.24%, which also means With the offshore RMB against the US dollar surpassing the 6.92 mark, it rose 180 points in the day. The onshore RMB against the US dollar temporarily reported 6.9240, up 220 points. Affected by the easing of tension in the supply of crude oil in the Middle East, oil prices have begun a roller coaster market from January 8. The increase narrowed to less than 1%. US oil temporarily reported at $ 59 / barrel, and cloth oil was $ 65.5 / barrel.

At present, the short-selling power of the offshore market has also decreased sharply. Most foreign institutional investors believe that short-selling bears have begun to collapse. Many Wall Street institutions point out that under the influence of the downward pressure on the US economy and the Fed's expectations of interest rate cuts this year, the dollar has little upside. Against the background of the continuous appreciation of the RMB over 800 points in the last ten trading days, foreign investment will continue Increase in holdings of RMB assets.

As for the subsequent trend of the U.S. dollar, the U.S. dollar has given up almost all of its gains in 2019 after a rather bad December, but analysts believe that the situation of the U.S. dollar may get worse, Citi said. As the US Federal Reserve cuts interest rates three times and begins to expand its balance sheet by buying more U.S. Treasuries, the U.S. dollar index may fall to a minimum of 85, and there is little room for upside, which has weakened investor demand for U.S. dollars and U.S. debt-safety assets And while many countries around the world are still worried about the Middle East crude oil supply chain, global trillions of funds are pouring into the Chinese market.

According to the latest statistics, as of January 9, the net inflow of northbound funds reached 142 billion yuan for 34 consecutive trading days. In the longer term, since the official launch of the Shanghai-Hong Kong Stock Connect in November 2014, The inflow of A shares also broke through the trillion yuan mark for the first time. Among them, more than 35% of external funds were net inflows in 2019, and more than 5,600 newly opened Shanghai-Shenzhen-Hong Kong Stock Connect accounts were ignited through northbound investment. Torch of confidence.

All this shows that international investors have increased confidence in A shares. In response, Global Asset Management Company Invesco said that Chinese government bonds and policy bank bonds were officially included in more international bond indexes, which is expected to attract about US $ 1.2 trillion. Funds will flow into the Chinese bond market in the next five years as China maintains the high value of the renminbi. For example, according to the latest data released by the International Finance Association on January 9, China ’s stock market attracted a net worth of 10.1 billion US dollars in December alone. Inflow.

Reuters interviewed a number of foreign exchange analysts a week ago that China's economy has strong resilience, coupled with the wide spread between the RMB and the US dollar, the continuous opening of the financial market, and a high probability of a net inflow of funds. The renminbi offers more support because the Fed's low interest rate policy will reduce the attractiveness of the currency to investors who are seeking returns.

Data released earlier by the Ministry of Commerce shows that in the first 11 months of 2019, China's actual use of foreign capital was 845.94 billion yuan, an increase of 6.0% year-on-year. According to data from ChinaBoard, foreign institutions increased their holdings by 64.5 billion yuan in November. Bonds have also started to rebound significantly from the increase in their holdings in October, and have increased for the 12th consecutive month.

According to the analysis, Goldman Sachs further stated that among the major economies, China is one of the few countries where the yield of risk-free bonds is still higher than historical lows. At this time, the valuation advantage of the RMB asset market has become apparent, which is attractive. The core factor of foreign investment has further increased the attractiveness of Chinese assets.

In addition, according to the latest data released by the IMF on December 31, the proportion of RMB in foreign reserves in the third quarter of 2019 rose to 2.01% (1.95% in the second quarter of 2019), which is the fourth quarter of 2016. The IMF began reporting the highest level of RMB assets held by central banks in various economies.

In fact, Buffett and his old partner, Charlie Munger, have also praised the Chinese market and Chinese companies on different occasions and in the media in recent years, and expect that the Chinese market has many opportunities and great potential. In the article "Seeing China", Buffett's analysis was quoted as saying that everything China has achieved in the past 50 to 60 years is an economic miracle. I never thought that such a thing would happen. China's economy is destined for a bright future. And this means that Buffett insists on the long view of the Chinese market.
.BWC Chinese
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