Global Currencies Are In Flood Again; &Nbsp; A Shares Are Mixed.

During the National Day holiday, the US dollar continued to weaken under the guidance of the US's resumption of quantitative easing monetary policy. Japan launched the monetary stimulus policy to reduce the impact of the depreciation of the US dollar on its economy. In response to the slowdown in economic recovery, the major economies launched the "two stimulus" to provide a phased opportunity for the global asset market and A shares to go well. However, China's macroeconomic situation and policies are facing more complicated situations, and the market uncertainty is increasing.

Since late September, no matter the US economic data and stock market is good or bad, it seems difficult to prevent the US dollar from weakening. This is because more and more signs show that, in order to prevent the economy from reentering the recession and deflation, the Fed will increase its purchase of treasury bonds and other securities at the next meeting of interest rates, which will increase inflation expectations and reduce the expected yield of US dollar assets. The ECB needs to consider the economic strength of the core countries such as Germany and France, and its policies tend to be conservative. Other emerging market countries have little demand for quantitative easing because the economic situation is better than the US. This shift led to capital outflows to the US and to the euro zone and other countries.

The weak dollar has had a huge impact on other currencies and economies. Japan, which failed to take the lead, reduced interest rates on 5 days to suppress the yen, preventing currency appreciation from dragging down its deeper dependence on foreign trade. This action has increased the risk of currency devaluation and strengthened the Federal Reserve's expectation of resuming quantitative easing in November.

Currencies in other Asian countries and regions with relatively high interest rates have also been rising. The new Taiwan dollar rose to a new high of two years. The won, baht, Indonesia shield, Singapore dollar and Malaysia ringgit were all strong. The Hong Kong dollar exchange rate has reached a strong guarantee level. {page_break}

　　 Global currency The policy of gradual easing has increased domestic economic variables.

　 First, the appreciation of the renminbi is expected to increase, and the inflow of capital is expected to increase. Since the reform, the exchange rate of RMB has been closely related to the trend of the euro. Since mid September, the euro appreciation trend is very obvious, and it is expected to continue for some time, which provides an important external environment for RMB appreciation. The RMB NDF offer shows that the appreciation expectation is increasing, and the further inflow of hot money is expected to increase.

　 Two, import inflation continues to rise, and the risk of rising prices is steeply increasing. Relative to the weakening of the US dollar, the price of hedge assets such as gold has increased rapidly, and crude oil, copper and other commodity prices closely related to the real economy have also risen significantly. As of 7 days, LME copper rose 8.7% in January, and NYMEX crude rose 13.6% in January. Previously, due to the weakening of expected tail factors and disaster impact factors, CPI may fall back naturally.

But the rise in commodity prices has added new instability to prices.

　 Three, the monetary policy space is getting smaller and the economic policy is in a dilemma. With the increase of capital inflow and the rise of commodity prices, the policy space is getting smaller and smaller. Deflation may hurt economic recovery. If interest rates increase, it will further increase the inflow of hot money. Easing will exacerbate the already unoptimistic inflation situation. The remaining three months of this year will be a test of the wisdom of decision making.

In recent years, A share trend It is not necessarily influenced by the trend of the US dollar, but more by endogenous economic operation and policy changes. The increase in capital inflow is undoubtedly good for A shares in the short run, which is expected to bring about a phased opportunity. The rise of commodities will stimulate the raw material sector, and the possibility of increasing interest rates will also be beneficial to the market as a whole. However, judging from the market situation based on the expectation of the fourth quarter economic outlook, there will be more uncertainties in the foggy economy and inflation situation. The trend of the A share market may become more complicated and confusing.