The RMB has fallen by more than 1,000 points in two weeks! Trump and Powell teamed up, and US stocks and US bonds fell sharply. Finance is a circle 2024/11/15 09:48 Financial experts from Beijing The RMB fell by 632 points last week and has fallen by another 460 points so far this week. In just two weeks, the offshore exchange rate of the RMB against the US dollar has fallen by more than 1,000 points, and may even exceed 1,100 points.
Trump came to power, the Fed cut interest rates, and the US announced rebounding CPI and PPI. Is this a big pressure on us? In fact, the world is now paying attention to the US economic policy and the Fed's interest rate cut. The fluctuations caused are not only in our country, but also in Japan's stock market and exchange rate. What is even more unexpected for the United States is that the US stock market has fallen by more than 200 points, and the US bond has fallen below 4.3%.
Powell's speech on future interest rate cuts sent a clear bearish signal, weighing on global markets.
At the close of the early morning, the three major U.S. stock indexes fell across the board, with the Dow Jones Industrial Average falling more than 200 points. Tesla, which had led the rise of technology giants in the past few days, fell 5%, and its current market value has fallen below $1 trillion.
However, among the technology giants, Apple rose by more than 1%, and Nvidia, Microsoft and Intel also rose slightly.
However, the performance of Chinese stocks listed in the US was not satisfactory. The China Golden Dragon Index fell by 1.81%, continuing the decline of A-shares. Among them, Bilibili fell by 12%. Among new energy vehicles, Xiaopeng fell by 5%, and Weilai fell by 3%.
At the same time, China's A50 futures also plunged 0.36%.
The reason for the general decline is probably closely related to Powell’s latest remarks.
Powell believes that the current US economy is very strong and the Federal Reserve will not rush to cut interest rates in the future.
Since the Federal Reserve just decided to cut interest rates last week, his statement is believed to significantly reduce the probability of a rate cut in December.
Trump's economic policies after taking office may make it difficult for the Federal Reserve to cut interest rates next year. Powell's current statement further verifies the market's speculation.
The latest cpi and ppi data also support Powell's slowing down of the pace of interest rate cuts, because after six consecutive months of decline, the US cpi data did not continue to fall, but rebounded, and the Fed is therefore worried that inflation will get out of control in the future. The cpi fell to 2.4% last month, but rebounded to 2.6% this month.
The situation was similar for PPI, which grew 2.4% year-on-year, higher than the market expectation of 2.3%.
If the United States' efforts are aimed at maintaining the strength of the US dollar, then it has undoubtedly done so now. The US dollar index currently remains near the 107 mark, and most non-US currencies are in a falling state.
This has also put pressure on the global financial market. Therefore, this round of RMB depreciation is not an isolated decline. While the US dollar index rose, other non-US currencies also fell. For example, this month, the British pound fell by 1.79%, the Japanese yen fell by 2.96%, the Swiss franc fell by more than 3%, and the euro fell the most, falling by 3.2%.
So we don’t need to look for reasons in China, but mainly look at what changes have taken place in the United States.
Obviously, Trump's upcoming inauguration will immediately make it extremely difficult for the market to predict future interest rate cuts by the Federal Reserve. Some investment banks believe that the Federal Reserve may not cut interest rates before July next year, while the chief economist of another investment bank pointed out that the Federal Reserve may only cut interest rates once in the entire year of 2025.
Powell's statement has undoubtedly further confirmed this expectation. The limited opportunities for interest rate cuts mean that the United States will still maintain a relatively high interest rate level, and the US dollar index will of course rise accordingly.
However, while causing non-US currencies, including the RMB, to fall in exchange rates, the United States itself is in greater trouble.
Now the yield of the 10-year US Treasury bond is close to 4.4%, and the price of the 10-year Treasury bond has fallen to 109.2. If we look at it on a monthly basis, the decline of the 10-year Treasury bond in October was as high as 3.38%, and it has also fallen by 1.07% so far in November.
U.S. Treasury bonds were once known as the safest financial assets in the world, but now they are subject to fluctuations similar to stocks at any time. As for whether the Chinese market can maintain a slow bull market, we cannot expect the Federal Reserve to cut interest rates, but still need to have its own good economic situation as support.#BabyMarvinf9c7值得拥🈶
