The current round of devaluation of the RMB exchange rate is related to the cyclical changes in the interest rate spread between China and the United States and the weakening of export settlement activities. This trend may continue in the second quarter.
The decline in China's equity market reflects the market's concern about China US relations and the adjustment of China's policy framework. The market needs time to absorb the impact of policies and observe the evolution of policies.
Powell's recent hawkish statements have strengthened the market's expectations of the Fed's accelerated tightening. With reference to the performance of major asset prices in the United States under the "Volcker shock" in the 1980s, there is a risk of further adjustment in the U.S. stock market in the future.
Risk tips: (1) the epidemic development exceeded expectations; (2) Geopolitical risk
