The Narrowing Of Interest Rates Between China And The United States To A New Low Of Five Years Is Really Shocking

Today's

The median price continued to hit the lowest level in August 5, 2011, at 6.4358, down 122 points for fifth consecutive days.

With the depreciation of the renminbi, the most popular arbitrage trading has gradually become dim. The interest rate spread between the five year treasury bonds in China and the United States has narrowed to the lowest level in five years, with only 115 basis points. In 2013, the spread reached a record 319 basis points.

About RMB

The haze is lingering. As of Friday, the RMB on the shore has fallen for six consecutive weeks, the biggest weekly decline since August.

On the shore, the RMB exchange rate closed at 6.4553, down 175 points from yesterday's closing price, breaking a new low since August 2011.

Offshore, the RMB fell below the 6.5300 threshold, expanding within days to more than 300 points, now 6.5328.

both sides

So it is extended to more than 700 points.

According to JP Morgan's report released in December 9th, the scale of overseas investors holding Chinese bonds has been slowing down, the growth rate in the first three quarters was 14%, while last year's annual growth rate was 68%, and its growth rate is expected to further decline to 10% next year.

This will be the slowest expansion rate of China's bond market since 2009.

At the same time, the US interest rate increase this month is almost certain. The Wall Street journal's latest survey shows that 97% of economists expect the Federal Reserve to raise interest rates next Wednesday, and only 3% of the respondents said the Fed is expected to wait until next year.

Goldman Sachs even believes that the Fed's rate hike may be greater than market expectations, in 2016 and 2017 or raise interest rates by 100 basis points.

The federal funds rate may reach 1.4% at the end of 2016.

Related links:

The US dollar index is hovering around 98.05.

The US dollar index continued to rise moderately since the opening of the previous trading session, and the US dollar remained strong against major currencies.

But from a technical point of view, traders in the Asia Pacific region pointed out that the technical signals of the US dollar index are still empty.

Although the US dollar index continued to rise moderately this trading day, the overall fluctuation of the US dollar index has not yet deviated from the fluctuation interval formed on Wednesday.

Asian stock markets were mixed during the day, the Nikkei index jumped 1% earlier, while the Shanghai Composite Index fell 1.1%, while the MSCI index of Asia Pacific (except Japan) fell 0.65%.

In terms of technology, traders in the Asia Pacific region pointed out that the index of US dollar index is neutral. The moving average of 5 days, 10 days and 20 days showed a downward trend, and 20 days, Pauling waited for the interval to expand.

Traders continue to point out that if the US dollar index is closed below the 20 day moving average of 99.13, then the market outlook will remain empty.

This trading day will then focus on heavy data such as retail sales in the US, or have a more important impact on the US dollar trend.