Fear Of Economic Differentiation Exacerbated The Pursuit Of US Dollar Assets

This week, the inter annual drama is on the market. The market is relatively light. Looking back in 2014, the US economy and the US dollar have become the biggest attraction. The market's strong bet on the strong economic recovery in the US has prompted massive capital flows into US assets ETF, and it is expected that the US will continue to recover steadily in 2015.

2014 is not only the year of the dollar, but also the year of differentiation. The monetary policy of Europe and the United States diverged, the dollar was strong, and the euro weakness became the mainstream trend.

One of the major challenges facing emerging countries in 2015 will be to cope with the "differential" economic and policy intensification in the developed world.

This challenge will open the gap between the well managed and poorly managed economies, and even the best economy will be tested.

Their response will further affect the prospects of the developed countries.

There are two main forms of differentiation between developed countries: the expansion of differences in economic growth and other major economic performance; and the related central bank policy differentiation.

The US has tightened its monetary policy step by step this year. It ended the QE in October and no more radical policy guidance. It is expected to raise interest rates for the first time in the middle of next year.

In Europe and Japan, the opposite is true.

Weak economic growth and the risk of deflation forced the two countries to launch further easing policies.

Japan's QQE expansion at the end of October was expanded from 60-70 trillion yen to 80 trillion yen per year, while the comprehensive QE of the European Central Bank's sovereign bond purchases was struggling in Germany's strong opposition. However, it is now widely expected that the European version of QE's "true face of Mount Lu" will be expected in the first quarter of next year.

Yes

For example, the pattern of the developed world implies three points:

1. G-3 exchange rate fluctuations, including the pressure on the US dollar to further appreciate various currencies.

2.

The risk of global policy tension is increasing, and the political pressure for protectionism is increasing.

3.

Finance

Unstable periodic seizures.

Zhitong finance December 29th

Optimistic about the US economic outlook and market influx of funds

Data from Markit, a data provider, shows that the size of international capital flowing into the US ETF is equivalent to 50% of the initial assets of these funds, the highest level since 2008.

In the face of the global economic weakness, the US economy is thriving and the S & P has reached a record high. The US dollar has been refreshing for nearly nine years.

The ETF paction in the US is conducted as a stock, but it tracks a basket of securities, which are usually used by investors to bet on economic fundamentals rather than stocks.

These assets have grown rapidly in recent years and increased by 16% to $2 trillion and 700 billion in 2014.

The US GDP increased by 5% in real terms in the third quarter, higher than 4.3% of economists' general forecast, the strongest growth since the third quarter of 2003. Such strong data show that the United States has indeed entered a broad road of accelerated economic growth.

Affected by this positive impact, the US dollar index once stood on the 90 mark, refreshing its new high in the past 9 years.

On the other hand, Europe is still struggling with the shadow of deflation. The euro zone's GDP grew by 0.8% in the third quarter, and inflation remained at a low level of 0.3% in November.

In 2013, capital flows to European assets only amounted to 16% of assets.

And the European economic engine, Germany, is also facing the pressure of capital outflow.

Beijing time 14:26 dollar index 89.93/94, Euro dollar 1.2190/89.