Overseas macro: the leading tightening path and the strong US economy promote the strength of the US dollar index
The further rise in inflation is not the reason for the recent rapid rise in US bond interest rates. This round of rapid rise in US bond interest rates is mainly due to the continued acceleration of the tightening pace of the Federal Reserve.
After the end of the interest rate meeting in March 2022, the Federal Reserve first communicated with the market to raise interest rates by 50 basis points in May, then released the signal to the market that "interest rates may be increased by 50 basis points in many meetings in the future", and communicated with the market a more aggressive path. Brad said in his speech on April 18 that he did not rule out the possibility of the Fed raising interest rates by 75 basis points in the future, and raised the interest rate of 20-year US bonds to more than 3.0% on April 19.
At present, the long-term interest rate of US bonds has fully reflected the current market expectation for the whole path of interest rate increase, and the interest rate of 10-year Treasury bonds is in step with that of 30-year treasury bonds. If inflation has peaked recently, the upside space of long-term interest rate is 10-20 basis points. Otherwise, the upside space of long-term interest rate is expected to be 50 basis points.
The continued sharp depreciation is another core driving factor for the strength of the US dollar. The main reason for the depreciation of the yen is the intensification of the differentiation of the monetary policies of the Central Bank of the United States and Japan, which widens the interest rate spread between Japan and the United States, and then attracts investors to carry out a large number of arbitrage transactions in the markets of the two countries; The rise of bulk commodities has turned Japan's trade surplus into a deficit; The hedging attribute of the yen has been questioned to some extent, and its hedging advantage has weakened. The US dollar is expected to show a strong trend of shock in the short term.
