Each reporter: Zhang ShoulinEdit: Liao Dan
On April 11, the U.S. 10-year treasury bond yield rose 5.5bp to 2.76%, China's 10-year treasury bond yield remained unchanged at 2.75%, and the Sino-US 10-year treasury bond interest rate It was the first inversion since 2010. This is a landmark event.
Tang Yao, associate professor of the Department of Applied Economics at Peking University Guanghua School of Management, pointed out in an interview with a reporter from " Daily Economic News " that the current situation is that the United States is in the process of rapid interest rate hikes , while the Chinese market is calling for policy There are louder voices for raising and lowering interest rates. As the domestic economic situation is relatively complex and new downward pressure is increasing, China's monetary policy will definitely be based on internal demand and will not make too many adjustments to the exchange rate.
AVIC Securities Chief Economist Dong Zhongyun pointed out in an interview with a reporter from the "Daily Economic News" that the recent Federal Reserve has continued to send hawkish signals, driving the market interest rate hike expectations to continue to increase, and U.S. bond yields have increased accordingly, while my country's Under pressure to stabilize growth, the market has expectations for loose monetary policy, and long-term interest rates are stable but declining.
Qu Qing, chief economist of Jianghai Securities , pointed out in an interview with a reporter from "Daily Economic News" that the 10-year treasury bond interest rates in China and the United States are inverted this time, but they have been inverted in the short-term before. The inversion itself shows that the United States is focused on fighting inflation, while China is still affected by economic pressure and the pace of monetary policy is different.
What impact does the spread between China and the United States inversion have on the RMB exchange rate? Chang Ran, a senior researcher at the Zhixin Investment Research Institute, pointed out in an interview with a reporter from the "Daily Economic News" that the inversion of the interest rate differential between China and the United States does not necessarily lead to the depreciation of the RMB exchange rate. The "current account" and "financial account" of the international balance of payments directly affect the RMB. The main channel for exchange rate appreciation and depreciation.
The inversion of interest rates in China and the United States is a short-term phenomenon
Tang Yao pointed out that since the Federal Reserve’s March interest rate meeting, senior Federal Reserve officials with voting rights on monetary policy have become more hawkish on inflation , with the most " The hawkish St. Louis Fed President James Bullard even believes that the monetary policy rate should be raised to above 3% this year.
Dong Zhongyun pointed out in an interview with every reporter that the inversion of the 10-year interest rate spread between China and the United States reflects the expanding differences in the economic and monetary policy cycles between the two countries. Although the RMB is currently relatively stable, there have been capital outflows from stocks and bonds recently. As the export growth rate gradually declines, the depreciation pressure of the RMB due to the inversion of interest rate differentials is also expected to gradually emerge. Under this situation, the feasibility and feasibility of my country's RRR cut and interest rate reduction are The necessity still exists, but the space and time window for monetary easing are limited.
However, the current value of the RMB against the US dollar is still at a high level. Tang Yao told reporters that under this situation, a moderate depreciation of the RMB will actually help stabilize China's exports, but it must also strengthen market guidance to avoid panic and abnormal situations. Excessive devaluation of rationality.
Qu Qing analyzed in an interview with reporters that in the context of rising interest rates in the United States, the inversion of the yield curves in China and the United States will put us under pressure to a certain extent. This inversion can lead to capital outflows. But he stressed that this inversion will not last long, and eventually China's interest rates will still be higher than those in the United States.
He explained that with the inversion of interest rates, the RMB is facing depreciation and capital outflows, which in turn promotes the rise of China's interest rates, thus forming a positive interest rate differential.
The team of Liu Dongliang, director of the Capital Market Research Institute of China Merchants Bank Research Institute, analyzed that although the macro environment has been different, the time and magnitude of the inversion of the 10-year treasury bond interest rate gap between China and the United States in this round should be limited, which will limit the negative impact. It is beneficial for fermentation.
The team analyzed that for U.S. debt, interest rates still have room to rise, but considering that U.S. inflation is likely to rise first and then fall, it is expected that the Fed's monetary policy tightening will also show a "short, flat and fast" pace. Therefore, The rise in long-term U.S. bond interest rates will mainly be concentrated in the first half of the year, and there is a possibility of a fall in the second half of the year.
Oriental Jincheng chief macro analyst Wang Qing's team predicts that there is still the possibility of further inversion in the interest rate gap between China and the United States in the next 1-2 months.But looking further forward, in terms of U.S. debt, as interest rates are raised and the downward pressure on the economy emerges, the 10-year U.S. bond interest rate may begin to enter a downward cycle at the end of the second quarter. By then, if the domestic epidemic situation improves, With policies to stabilize growth and expectations for a better economy, the 10-year China Bond interest rate still has room to rise. Therefore, overall, the interest rate gap between China and the United States may continue to be inverted in the next 1-2 months, but is expected to return to normal in the second half of the year.
Fiscal policy this year is the protagonist of stabilizing growth
What impact will the inverted interest rate gap between China and the United States have on the RMB exchange rate? Chang Ran, a senior researcher at Zhixin Investment Research Institute, analyzed in an interview with a reporter from "Daily Economic News" that the interest rate gap between China and the United States has shrunk rapidly recently, but the RMB is appreciating relative to the US dollar.
First of all, the "current account" surplus pattern is not affected by the interest rate differential between China and the United States. In view of the implementation and support of my country's current series of policies to stabilize foreign trade, the export growth rate may have slowed down, but the absolute value is still at a relatively high level. In addition, with the recurrence of global epidemics, my country's service trade deficit will continue to shrink, so the current account surplus pattern will be certain. maintained within the time.
Secondly, the correlation between the inversion of China-US interest rate spreads and the "direct investment" and "other investment" items of the "financial account" is not high. Changes in the "direct investment" item reflect changes in long-term funds. The correlation between capital flows under the "other investment" item and changes in domestic and foreign interest rate spreads is low and has no obvious regularity.
Once again, the inversion of the interest rate differential between China and the United States has a certain impact on the outflow of funds in the "securities investment" item of the "financial account", but it is unlikely to cause large-scale capital flight. Although foreign capital holdings of Chinese bonds have been increasing in recent years, the proportion of foreign capital holdings of government bonds is relatively low, only about 3%, making it difficult to have a major impact on the domestic bond market. Northbound capital outflows are mainly affected by the capital market panic index and are not necessarily significantly related to the inversion of the interest rate differential between China and the United States.
In summary, Chang Ran believes that changes in the RMB exchange rate are relatively limited by the interest rate differential between China and the United States, and the inversion of the interest rate differential between China and the United States does not necessarily lead to the depreciation of the RMB exchange rate.
However, he emphasized that the situation in Russia and Ukraine is turbulent, and investors are worried that international sanctions may affect China, and their negative spillover effects may suppress cross-border capital inflows to a certain extent. Overseas monetary policies are uncertain, and the Federal Reserve may A one-time interest rate hike of 50bp will put the exchange rate under short-term pressure. In the coming period, due to the comprehensive impact of domestic foreign exchange settlement and sales, international geopolitics, and overseas central bank monetary policies, it is not ruled out that the RMB exchange rate will depreciate in periodic fluctuations.
Dongfang Jincheng’s chief macro analyst Wang Qing’s team said that taking a step back, even if the inversion of the interest rate gap between China and the United States will create periodic depreciation pressure on the exchange rate of the RMB against the U.S. dollar, this pressure will be relatively limited; when necessary, regulators will have sufficient Policy tools for regulation, including restarting countercyclical adjustment factors, strengthening cross-border capital flow macro-prudential supervision and other measures. As long as the depreciation of the RMB against the US dollar is controlled at around 5% this year, domestic monetary policy will have sufficient conditions to "focus on me."
Dong Zhongyun, chief economist of AVIC Securities, further told reporters that fiscal policy will be the protagonist of stabilizing growth this year. Stabilizing market entities under the epidemic requires further fiscal efforts. Infrastructure investment is also an important starting point for stabilizing growth. Local government special bond issuance is in advance. It is conducive to the recovery of infrastructure investment growth. In addition, stabilizing growth is inseparable from stabilizing real estate, and real estate policy adjustments are also an important follow-up focus. Although many places have relaxed real estate control policies under city-specific policies, there has still been no significant improvement in residents’ home purchases and real estate companies’ land acquisition since March. It is expected that subsequent real estate controls may be on the demand side (residents’ home purchases) and the supply side (housing companies’ financing). ) to further relax policy restrictions.
Daily Economic News
