Performance logic of Q1 assets in 2022: under high inflation pressure, the Fed's expectation of raising interest rates and shrinking the table is rising - the conflict between Russia and Ukraine is escalating, and risk aversion is rising
The prices of energy and industrial products rose sharply: in early 2022, the global economic environment was similar to "stagflation", commodities in major categories of assets would have better excess returns, and the prices of industrial products such as crude oil and copper recorded positive returns. On February 24, Putin launched military operations against Ukraine. The escalation of the conflict between Russia and Ukraine once again exacerbated the supply concerns of bulk commodities, and the prices of wheat, crude oil, aluminum and other commodities exported by Russia and Ukraine soared. In Q1 2022, ice oil distribution closed up 44.2%.
Supported by high inflation, combined with the escalation of the conflict between Russia and Ukraine, and catalyzed by risk aversion, Q1 gold closed up 9% in 2022.
Us long-term bond interest rate rises and the US dollar is strong: the Fed's statement in January 2022 and another record high inflation have greatly exacerbated the market's tension about the Fed's continuous interest rate increase and table contraction in 2022. The 10Y US bond interest rate once approached 2.1% (in line with the high point judged in our strategy in 2022), and the US dollar index showed a volatile market. After the escalation of the conflict between Russia and Ukraine, the risk aversion led to the sharp rise of the US dollar, while the war and the rise of commodity prices suppressed the concerns of economic demand, which prompted the periodic decline of US bond interest rates.
The performance of China's treasury bonds is relatively independent: under the disturbance of the expectation of global liquidity tightening, the bond interest rate is generally upward. However, China's independent monetary policy environment and deviated from the economic cycle prompted the 10Y treasury bond interest rate to fall below 2.7%, but then it rebounded under the influence of the credit expansion expectation brought by the steady growth policy. The 10Y treasury bond interest rate Q1 is a V-shaped trend as a whole, Narrow amplitude shock pattern.
Global stock markets generally fell: at the beginning of 2022, first, the Fed tightened expectations, and the US bond interest rate rose sharply, suppressing the valuation of risky assets and bearish market sentiment. With the Fed's expectations more extreme, the stock market rebounded briefly in mid February. Then the conflict between Russia and Ukraine escalated, the global risk aversion warmed up again, and the stock market fell across the board. Cumulatively, the gem index, NASDAQ and Hang Seng technology index, which represent high growth and high valuation, led the decline, followed by the poor performance of European stock markets more affected by the conflict between Russia and Ukraine.
