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The epidemic situation in Shanghai is stable and improving. Only by not slackening our efforts can w…
On the 30th, Shanghai reported that the new infected persons on the 29th were found in closed-loop isolation and control. However, it must be noted that the epidemic prevention and control is still at a critical stage, the situation is still severe and complex, and social control should be strengthened. At present, the epidemic situation in Shanghai is generally stable and improving, and the effect of clearing and tackling key problems is becoming more and more obvious. From the data, there h...
Curry's comeback, Poole scored 30 points, five warriors scored and beat the Nuggets
The Golden State Warriors played the Denver Nuggets at home. The two teams played very fiercely in the first game of the playoffs. The warriors opened fire on the outside of the field, and finally defeated their opponents 123-107, leading by 1-0. In this game, curry returned with 16 points, 4 assists and 3 rebounds, Poole broke out and scored 30 points, Thompson hit 5 three points and scored 19 points, chasing green with 12 points, 9 assists, 6 rebounds and 3 blocks. The Nuggets were outnumbe...
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In cyberpunk 2077, players basically move on the ground. It is difficult to have a bird’s-eye view of the city of night. Recently, foreign mod authors released “cyberpunk 2077” flying mod to realize your dream of flying. The author also released a demonstration video. Let’s have a look! Mod Demo: After hitting mod, if you want to fly, click “5” on the keyboard to take off. Press WASD to control the flight direction, and press space and shift to change the flight altitude. The flight speed can...
Opinion leader Zhang Yu team
From April 19 to April 22, the USD / CNY exchange rate decreased by about 2.1%, from 6.369 opened on April 19 to 6.5015 closed on April 22, and the USD / CNH offshore exchange rate decreased by about 2.3%, from 6.3788 opened on April 19 to 6.5274 closed on April 22. The exchange rate broke through the integer of 6.5, which attracted more attention from the market. This paper will ask some common questions about the market: does the central bank guide the devaluation because of the poor economy? Depreciation risk on? Has the devaluation trend begun? Answer.
How to understand the recent exchange rate changes?
Why fall—— Offshore concentrated fall covering + disturbance of some trading factors
The current round of decline began from offshore, mainly because the US dollar rose strongly during the closure of the Hong Kong market, and the offshore market concentrated to make up for the decline after the opening of the festival. The earliest change was that the offshore RMB suddenly began to depreciate on April 19, mainly because the US dollar rose strongly by about 1.1% during the closure of the Hong Kong market, and the offshore concentrated to make up for the decline after the festival. In addition, there are also some trading factors. The cross exchange rates of the euro, the Japanese yen and the British pound against the offshore RMB have fallen to historical lows, and the demand for buying these currencies has also increased, bringing some depreciation pressure to the RMB.
Is this devaluation guided by the central bank—— No,
According to the calculation of Huachuang macro exchange rate pricing model, the period of increasing the fluctuation of countercyclical factors since this year is mainly in the early stage of the conflict between Russia and Ukraine. Due to the influence of market sentiment and the sharp fluctuation of Russian ruble exchange rate, the central bank has made short-term two-way adjustment through countercyclical factors. Since the current round of devaluation started on April 19 (Tuesday), countercyclical factors have not significantly guided the devaluation of RMB, On the contrary, it reached - 123bps on April 22 (i.e. guided in the direction of appreciation), indicating that this round of depreciation is not guided by the central bank.
Why can this round of offshore drive onshore—— The Shanghai epidemic affected the onshore spot trading volume
Affected by the blockade of the Shanghai epidemic, the onshore spot trading volume of the US dollar against the RMB has shrunk, which is more vulnerable to offshore influence. Since the implementation of the global static blockade in Shanghai at the end of March, the spot inquiry trading volume of the US dollar against the RMB has decreased from more than US $32 billion a day to about US $20 billion. The obvious shrinkage of the onshore trading volume has made the onshore spot exchange rate more vulnerable to the offshore exchange rate.
Has the RMB started the depreciation cycle—— At present, the evidence is not sufficient
The current round of RMB exchange rate devaluation is mainly driven by offshore centralized compensation. At present, it is only four trading days (April 19-22), and the devaluation range and speed are not large; At the same time, the depreciation expectations of residents and enterprise departments have not seen an increase recently, and the market expectation is still relatively stable. Therefore, at present, there is no sufficient evidence to prove that the exchange rate risk is on, but as for the subsequent depreciation speed, it still needs to be followed up closely.
Outlook: depreciation requires two conditions - weak exports and weak PMI
We believe that the devaluation of RMB exchange rate needs to meet two conditions - weak exports and weak PMI. Once PMI rises, the backlog and accelerated settlement of foreign exchange are expected to form support for RMB exchange rate. First of all, the RMB exchange rate currently has about US $300 billion of “protection” for the backlog of foreign exchange settlement, and there is “confidence” behind it. Secondly, the willingness of enterprises to settle foreign exchange is related to the number of orders, so whether to settle foreign exchange (export settlement exchange rate - Import Payment Exchange Rate) is more consistent with the trend of PMI. Therefore, there are three scenarios:
Scenario a: high export + PMI upward → RMB appreciation; Scenario B: export falling + PMI rising → RMB or flat; Scenario C: export falling + PMI falling → RMB weakening
At present, due to the disturbance of the epidemic, the PMI fell below 50 in March. In this case, it is normal for the exchange rate to weaken. However, due to the backlog of nearly $300 billion to be settled in foreign exchange, once the PMI rises, even if the export falls, the enterprises’ backlog to be settled in foreign exchange will accelerate the settlement, which is expected to form an effective hedge against the decline of the export surplus.
How to understand the role of exchange rate in monetary policy?
After the formation mechanism of the central parity was stable in 2017, through the market tracking experience of major fluctuations in the past few years, we believe that there are two levels of understanding - the overall understanding is that the independence of monetary policy takes precedence over the exchange rate, and the specific understanding is that it will be cautious to control the speed without controlling the point and close to the previous high, so as to avoid the spiral decline of exchange rate and equity and debt assets.
What are the future concerns?
First, focus on the counter cyclical factor in the short term. This time is different from the past. We observed the counter cyclical factor in the early stage of exchange rate depreciation. At present, we still control the range from last Friday, but do not involve the direction. This requires observing the subsequent counter cyclical factors, so as to more accurately understand the possible policy intention of the central bank.
Secondly, this time, due to offshore, offshore is also devalued more than onshore. It remains to be seen whether there are some measures to tighten the liquidity of RMB offshore.
Finally, due to the backlog of foreign exchange to be settled, the basic price of the exchange rate is still inside - the progress of the epidemic and the strength of steady growth are still the most important factors in the medium-term trend of the exchange rate in the future.
Risk tip: export and steady growth are weaker than expected.
How to understand the recent exchange rate changes?
In recent days, the RMB exchange rate fluctuated greatly. From April 19 to April 22, the USD / CNY fell by about 2.1%, from the opening of 6.369 on April 19 to the closing of about 6.5015 on April 22, and the offshore USD / CNH fell by about 2.3%, from the opening of 6.3788 on April 19 to the closing of 6.5274 on April 22. The exchange rate broke through the 6.5 integer, resulting in an increase in market attention. This paper will ask some common questions about the market: does the central bank guide the devaluation because of the poor economy? Depreciation risk on? Has the devaluation trend begun? Answer.
The earliest change was 4
Opinion leader Zhang Yu team
From April 19 to April 22, the USD / CNY exchange rate decreased by about 2.1%, from 6.369 opened on April 19 to 6.5015 closed on April 22, and the USD / CNH offshore exchange rate decreased by about 2.3%, from 6.3788 opened on April 19 to 6.5274 closed on April 22. The exchange rate broke through the integer of 6.5, which attracted more attention from the market. This paper will ask some common questions about the market: does the central bank guide the devaluation because of the poor economy? Depreciation risk on? Has the devaluation trend begun? Answer.
How to understand the recent exchange rate changes?
Why fall—— Offshore concentrated fall covering + disturbance of some trading factors
The current round of decline began from offshore, mainly because the US dollar rose strongly during the closure of the Hong Kong market, and the offshore market concentrated to make up for the decline after the opening of the festival. The earliest change was that the offshore RMB suddenly began to depreciate on April 19, mainly because the US dollar rose strongly by about 1.1% during the closure of the Hong Kong market, and the offshore concentrated to make up for the decline after the festival. In addition, there are also some trading factors. The cross exchange rates of the euro, the Japanese yen and the British pound against the offshore RMB have fallen to historical lows, and the demand for buying these currencies has also increased, bringing some depreciation pressure to the RMB.
Is this devaluation guided by the central bank—— No,
According to the calculation of Huachuang macro exchange rate pricing model, the period of increasing the fluctuation of countercyclical factors since this year is mainly in the early stage of the conflict between Russia and Ukraine. Due to the influence of market sentiment and the sharp fluctuation of Russian ruble exchange rate, the central bank has made short-term two-way adjustment through countercyclical factors. Since the current round of devaluation started on April 19 (Tuesday), countercyclical factors have not significantly guided the devaluation of RMB, On the contrary, it reached - 123bps on April 22 (i.e. guided in the direction of appreciation), indicating that this round of depreciation is not guided by the central bank.
Why can this round of offshore drive onshore—— The Shanghai epidemic affected the onshore spot trading volume
Affected by the blockade of the Shanghai epidemic, the onshore spot trading volume of the US dollar against the RMB has shrunk, which is more vulnerable to offshore influence. Since the implementation of the global static blockade in Shanghai at the end of March, the spot inquiry trading volume of the US dollar against the RMB has decreased from more than US $32 billion a day to about US $20 billion. The obvious shrinkage of the onshore trading volume has made the onshore spot exchange rate more vulnerable to the offshore exchange rate.
Has the RMB started the depreciation cycle—— At present, the evidence is not sufficient
The current round of RMB exchange rate devaluation is mainly driven by offshore centralized compensation. At present, it is only four trading days (April 19-22), and the devaluation range and speed are not large; At the same time, the depreciation expectations of residents and enterprise departments have not seen an increase recently, and the market expectation is still relatively stable. Therefore, at present, there is no sufficient evidence to prove that the exchange rate risk is on, but as for the subsequent depreciation speed, it still needs to be followed up closely.
Outlook: depreciation requires two conditions - weak exports and weak PMI
We believe that the devaluation of RMB exchange rate needs to meet two conditions - weak exports and weak PMI. Once PMI rises, the backlog and accelerated settlement of foreign exchange are expected to form support for RMB exchange rate. First of all, the RMB exchange rate currently has about US $300 billion of “protection” for the backlog of foreign exchange settlement, and there is “confidence” behind it. Secondly, the willingness of enterprises to settle foreign exchange is related to the number of orders, so whether to settle foreign exchange (export settlement exchange rate - Import Payment Exchange Rate) is more consistent with the trend of PMI. Therefore, there are three scenarios:
Scenario a: high export + PMI upward → RMB appreciation; Scenario B: export falling + PMI rising → RMB or flat; Scenario C: export falling + PMI falling → RMB weakening
At present, due to the disturbance of the epidemic, the PMI fell below 50 in March. In this case, it is normal for the exchange rate to weaken. However, due to the backlog of nearly $300 billion to be settled in foreign exchange, once the PMI rises, even if the export falls, the enterprises’ backlog to be settled in foreign exchange will accelerate the settlement, which is expected to form an effective hedge against the decline of the export surplus.
How to understand the role of exchange rate in monetary policy?
After the formation mechanism of the central parity was stable in 2017, through the market tracking experience of major fluctuations in the past few years, we believe that there are two levels of understanding - the overall understanding is that the independence of monetary policy takes precedence over the exchange rate, and the specific understanding is that it will be cautious to control the speed without controlling the point and close to the previous high, so as to avoid the spiral decline of exchange rate and equity and debt assets.
What are the future concerns?
First, focus on the counter cyclical factor in the short term. This time is different from the past. We observed the counter cyclical factor in the early stage of exchange rate depreciation. At present, we still control the range from last Friday, but do not involve the direction. This requires observing the subsequent counter cyclical factors, so as to more accurately understand the possible policy intention of the central bank.
Secondly, this time, due to offshore, offshore is also devalued more than onshore. It remains to be seen whether there are some measures to tighten the liquidity of RMB offshore.
Finally, due to the backlog of foreign exchange to be settled, the basic price of the exchange rate is still inside - the progress of the epidemic and the strength of steady growth are still the most important factors in the medium-term trend of the exchange rate in the future.
Risk tip: export and steady growth are weaker than expected.
How to understand the recent exchange rate changes?
In recent days, the RMB exchange rate fluctuated greatly. From April 19 to April 22, the USD / CNY fell by about 2.1%, from the opening of 6.369 on April 19 to the closing of about 6.5015 on April 22, and the offshore USD / CNH fell by about 2.3%, from the opening of 6.3788 on April 19 to the closing of 6.5274 on April 22. The exchange rate broke through the 6.5 integer, resulting in an increase in market attention. This paper will ask some common questions about the market: does the central bank guide the devaluation because of the poor economy? Depreciation risk on? Has the devaluation trend begun? Answer.
The earliest change was 4
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