RMB exchange rate: where is the depreciation? Based on the comparison between the term spread of Chinese bonds and the term spread of US bonds, from the perspective of the pricing of the spread, there is a 95% probability that the reasonable level of the exchange rate of the US dollar against the RMB is 6.75 in the next 1-3 months; Under the circumstances that the Central Bank of China maintains loose funds and pushes up the term interest rate spread, and the Federal Reserve is about to enter the cycle of intensive interest rate increase in the second quarter, taking the historical extreme value of the interest rate spread between China and the United States as the limit level of deviation from the current round of China US monetary policy cycle, the limit point of the exchange rate of the US dollar against the RMB in the second quarter may be at 6.96 and the central value is 6.85.
RMB exchange rate: the implication of devaluation. The devaluation of the RMB exchange rate since April, on the one hand, may point to the pressure of some processing and manufacturing economies to exit due to rising costs under the pressure of rising commodity prices due to concerns about supply shortage, and the demand for upstream commodities tends to decline; On the other hand, the shortage inflation pressure drives the global interest rate level upward, and the upward interest rate level plus the inflation pressure has a strong incentive for the central banks of major economies to tighten monetary policy, which may lead to the tightening of the credit environment of downstream economies and inhibit the expansion of total economic demand. As a link between upstream and downstream economies, the RMB exchange rate began to depreciate, pointing to the overall economic demand or tends to fall, and the demand for bulk commodities and the growth rate of global exports face downward risks.
RMB exchange rate: risk of reversal. On the one hand, the reasons for the breaking and devaluation of the RMB exchange rate in April came from the pressure of continuous capital outflow; On the other hand, due to the great disturbance caused by the epidemic to economic growth in April, the market was worried about the decline of export fundamentals and the rise of risk aversion towards RMB local currency assets, so it chose to purchase foreign exchange in advance. Among the above two main factors, if only the capital outflow, the depreciation pressure on the RMB exchange rate will not be too strong. If the export fundamentals are damaged, the depreciation pressure of the exchange rate will be released quickly. Therefore, the disturbance of the epidemic to the economic fundamentals is the main contradiction in the short term. If the resumption of work and production is accelerated, the export fundamentals will be repaired quickly, and the RMB exchange rate may stop falling and rebound.
The impact of RMB devaluation: the impact of RMB devaluation. (1) Compared with history, the current round of RMB exchange rate depreciation has the same point that it all occurred in the period of low onshore trading volume. Then the short force dominated by investment disk broke the calm of the market and drove the stop loss positions to leave the market; The difference lies in the devaluation of the RMB exchange rate and the rapid decline of the central parity rate and the FOB spread, which shows that there is no tendency to actively devalue the RMB exchange rate at the level of monetary policy. It is expected that when the short position of the RMB exchange rate has not been clearly shown, the central bank may be cautious about the RMB exchange rate and might as well "let the bullet fly for a while". (2) When the RMB exchange rate between the ah share premium releases the depreciation pressure, starts to repair the elasticity of two-way fluctuations, or drives cross-border funds to buy relatively undervalued H shares, the probability that Hong Kong stocks are at the bottom of valuation is high, which is lower than that of a shares, and the ah share premium may fall back with the depreciation of RMB exchange rate.
Risk tips: (1) the change of monetary policy of the Central Bank of China and the United States exceeded expectations; (2) The impact of covid-19 epidemic on economic growth is uncertain; (3) The policy effect of "steady growth" of China's economy lags behind.
