7 On July 13, the United States announced the latest inflation data. In June, the U.S. CPI increased by 9.1% year-on-year, and the market expectation was 8.8%.
Like last month, the U.S. inflation rate this time still exceeded market expectations by 0.3%. The data
is quite ugly.
The Nasdaq pre-market futures index went from rising 0.5% to falling 2.5%, falling 3% in one breath.
However, after the opening of US stocks , Nasdaq fell by 2% and quickly turned red.
This shows that the recent frequent anticipatory management of in the United States is still somewhat effective.
(1) Expectation Management
After the inflation data was released, Biden immediately stated that the US June inflation data was "unacceptably high", but considering the recent decline in gasoline prices, CPI data is outdated.
Biden means that oil prices fell in July, so inflation is expected to fall back in July.
This is still relatively in line with market expectations. Biden's statement has to some extent awakened market expectations for the recent decline in oil prices.
This is also a way of expectation management.
However, I think that although oil prices and commodities both experienced a collective plunge in July, this was the result of the strengthening of expectations for a world economic recession.
However, it will still take some time for commodity prices to be transmitted to the consumer side. Although U.S. inflation is likely to fall back in July, the magnitude should not be too great. The U.S. inflation rate should remain above 8% before October. of high position.
Moreover, the price of oil depends on the outcome of Biden's trip to the Middle East. There are still many variables.
For another example,
The White House issued an "early warning" on July 11 that the U.S. CPI would rise sharply in June.
Then the night before the United States released inflation data, a document said to be the United States' "June CPI" was suddenly leaked, showing that the United States' inflation rate in June was as high as 10.2%.
This suddenly scared the US stock market and into a dive at the end of July 12th.
so much so that the US Bureau of Labor Statistics had to come out to refute the rumors.
In fact, the leaked rumor data is extremely false.
This time the market’s forecast for US inflation data is 8.8%, while the leaked version is as high as 10.2%.
In fact, energy prices and food prices in June can be roughly estimated. Therefore, although the market’s expectations for inflation data may deviate by about 0.3%, it is unlikely to directly deviate from 8.8% to 10.2%. , this is a bit too outrageous.
Normally, a market dominated by institutions like the U.S. stock market will not fluctuate due to rumors that are obvious to be false at a glance.
This can only explain two problems.
One is that the problem of retail investors in the US stock market in the past two years still exists.
Secondly, it also shows that the current U.S. stock market is still in a relatively fragile state. If there is a slight disturbance, there will be such large fluctuations. This is obviously not a healthy financial market performance.
In addition, I guess that the rumor leaked last night may have been self-directed and acted.
The United States knows that the real inflation rate of 9.1% is too bad, so it first deliberately "leaked" a rumored data that looked very bad. Then when the real data comes out, although it is not good-looking, it looks slightly better than the very bad rumored data.
The United States is very good at this kind of routine, turning a bad thing into a good thing.
This is also part of the so-called expectation management in the United States.
But this will only have some impact on the short term at most. For the medium and long term, the substantial negative is negative and will not change due to expectation management.
can't be fake if it's true, and can't be true if it's false.
Although the current short-term situation of US stocks is difficult to grasp, with too many fluctuations and too many variables.
However, under the Federal Reserve aggressive interest rate hike , the mid- to long-term bearish trend of US stocks is still relatively certain.
(2) The Federal Reserve raises interest rates and adds more
The next Federal Reserve interest rate meeting is on July 27. The trend of U.S. stocks in the next half month will mainly depend on the change in the probability of the Federal Reserve raising interest rates by 100 basis points in July.
After the inflation data came out, the U.S. interest rate market immediately significantly increased expectations for the Federal Reserve to raise interest rates.
75 basis points of interest rate hike in July has been confirmed, and even the probability of an extreme situation of 100 basis points of interest rate hike in July has increased to 80%.
U.S. interest rate futures also show that the probability of a 75 basis point interest rate hike in September has suddenly increased to 80%.
You should know that last month, the market once expected that interest rates would be suspended in September, or only raised by 25 basis points.
So I have always said that this so-called "expectation" will change at any time according to the latest situation. It is not an unchanging prediction and can swing at any time.
Overall, this 9.1% inflation rate is indeed too ugly.
Because this inflation rate is based on the fact that the Federal Reserve has continuously raised interest rates significantly.
The Federal Reserve raised interest rates by 0.25% in March.
html will raise interest rates by 0.5% in May. htmlThe interest rate will be raised by 0.75% in June.The interest rate in the United States has increased from 0 interest rate to 1.5% interest rate in one breath.
Results The U.S. inflation rate has risen from 7.9% in February to 9.1% now.
gives people the impression that the more the Fed raises interest rates, the more inflation in the United States will rise.
But this is an illusion.
To be precise, if the Fed had not raised interest rates, U.S. inflation is estimated to have gone straight to 20%.
So, it’s not that the Fed raising interest rates is useless.
The effect of the Federal Reserve's interest rate hike is actually directly reflected in the exchange rate and the stock market.
(3) Exchange rate war
The U.S. dollar index rose from near the critical point of 88 last year to the current high of 108 after the Federal Reserve raised interest rates.
Correspondingly, the currencies of the world's major economies have depreciated to varying degrees.
From New Year's Day last year to the present:
The RMB exchange rate has depreciated from 6.45 RMB per US dollar to 6.74 now, with a depreciation rate of 4.3%.
The Japanese yen exchange rate depreciated from 103 yen to 1 US dollar to 137, a depreciation of 25%.
euro exchange rate, 1 euro is exchanged for 1.23 US dollars, which depreciated to 1.002, and the depreciation rate reached 18.7%.
In the world's major economies, almost all currencies have experienced significant depreciation relative to the US dollar.
The RMB is relatively strong. Even if it is calculated from the highest appreciation of 6.3 at the beginning of this year, the current depreciation rate is only 6.5%.
The Federal Reserve's aggressive interest rate hikes have caused the U.S. dollar index to strengthen significantly and other major currencies to depreciate significantly. This result itself is conducive to lowering inflation in the United States.
Because the United States is a big consumer and importing country.
The appreciation of the US dollar and the depreciation of other currencies are beneficial to US imports. With the same US dollar, more goods can be purchased, which is equivalent to lowering the price of US imports.
Therefore, normally speaking, the U.S. dollar index strengthens significantly, which in itself can reduce U.S. inflation.
However, despite the sharp depreciation of the euro and the yen, U.S. inflation is still soaring, which further illustrates the seriousness of the U.S. problem.
This also shows that the depreciation of the RMB exchange rate this year is not large. This is one of the important reasons why the Federal Reserve’s current wave of interest rate hikes cannot control inflation well.
We are the main source of imports of daily necessities and consumer goods in the United States. The maximum depreciation of the RMB this year is 6.5%. If we, like the Japanese yen, frequently depreciate by 20%, then U.S. inflation may really drop significantly.
But due to various reasons, our current depreciation is not too great.
This shows that this wave of aggressive interest rate hikes in the United States, although harvesting Japan and the European Union , is quite effective.
But our bones are relatively hard, and the harvesting sickle of the United States cannot cut it very hard.
I think this is definitely a situation that the United States does not want to see.
Therefore, I estimate that the United States will still do whatever it can to try to mess with us in various ways.
We cannot take this lightly.
In fact, although our depreciation is not large at this stage, the exchange rate is still maintained in the normal range of 6.7.
But this can only represent the past and cannot determine the future.
Recently, there have been some dangerous signs. Don’t think that we can sit back and relax.
Although the European Union and Japan are now being harvested by the United States first, we must clearly realize that the ultimate goal of this round of aggressive interest rate hikes in the United States is most likely to be on us.
Because the European Union, Japan, and other emerging market countries cannot satisfy the appetite of the United States.
Therefore, the United States may increase its measures against us in the future. If raising interest rates by the Federal Reserve alone is not enough to drive international funds out of our country, then the United States will definitely use all other unconventional means to carry out overruns. Fight .
The worse the current inflation situation in the United States, the more likely the United States will take desperate measures.
Faced with this situation, we must stabilize ourselves, stabilize the economy, and ensure that we are not in chaos.
The most important thing is that the exchange rate must be stable and cannot depreciate by more than 10% like the Japanese yen and the euro.
In this financial war between us and the United States, exchange rate is still fundamental.
As long as our exchange rate can be stabilized and does not fall below the critical point of 7.2 two years ago, then the United States will not have much to do with us.
So no matter how strong the US dollar index is, as long as the RMB exchange rate remains stable, the harvesting effect of the United States will be very limited, and it cannot truly solve the current inflation problem and debt crisis in the United States.
At the same time, as long as we can hold on and let the internal debt crisis and the stock market explode in the United States, the United States will have no time to look east because of a fire in its backyard.
After the release of U.S. inflation data, on the evening of July 13, U.S. Treasury bond yields had completely inverted from 2-year to 5-year to 10 years ago.
Under normal circumstances, it should be from 2 years to 10 years, and the interest rate is getting higher and higher.
But now the interest rates are getting lower and lower.
Moreover, the current U.S. bond interest rate is inverted , which is already the highest level since 2000.
This shows that the market’s expectations for a U.S. economic recession are very strong.
The U.S. financial markets are also in chaos.
We are indeed under a lot of pressure in all aspects now.
But neither we nor the United States are actually gritting their teeth and persisting.
It depends on who can't hold on first.
I have always believed that we can survive until the end.
But this process is definitely thrilling and full of thorns.
In this regard, we also need to have some psychological expectations and increase risk awareness.
At this stage, no matter what you do, it is best not to waste money and be conservative and cautious. It is always right.
Let us not be overly pessimistic or blindly optimistic.
The future is bright, but the road is tortuous. We must be prepared to overcome obstacles and have the determination to move forward courageously.
I am Xinghua Dabai, everyone is welcome to follow and forward!
