A Shares Out Of The Adjustment, The Second Wave Of Inflation

Now we must jump out of the A-share market to see A shares, so that we can see clearly the future trend of the A market.

From a global perspective, the three fundamental changes require great attention.

First, from the middle of February, the three major U.S. stock indexes rose sharply, completely recovering from the loss of land at the beginning of the year, even to a record high.

Hongkong's Hang Seng Index has also bottomed out, especially the Hang Seng Index.

European and Japanese stock markets also rebounded sharply.

Second, commodity prices represented by oil bottomed up, rising far faster than the market expectations at the beginning of the year, indicating that the global economic recovery is expected to increase and the risk appetite of funds is enhanced.

Third, the pace of interest rate hike in the US Federal Reserve slowed down, the US dollar peaked and the RMB exchange rate stabilized and picked up.

These three fundamental changes are the key to pushing the A shares out of the adjustment and regaining the upward trend.

Commodity prices have risen sharply this year, leaving big investment banks at the beginning of the year looking at the trend of commodities.

Last week, international oil prices rebounded sharply, and domestic commodity prices also soared. International oil prices rose to 44.48 US dollars per barrel yesterday, a 5 month high. Domestic futures markets, black products, agricultural products and chemical industry soared three trading days, and the bulk commodity index of many institutional statistics has been refreshed for 9 months.

The continuous rise of commodity futures led to management concerns. Subsequently, the big business issued a notice to raise paction fees for some varieties, and some varieties began to fall.

The United States will convene the April FOMC meeting in from April 26th to 27th. It is expected that the Fed will maintain the "Pigeon" tone unchanged. But Yellen may hint at the possibility of raising interest rates in the second half of the year to guide market expectations, the US dollar will be narrowly concussion, the RMB exchange rate will stabilize, and crude oil will continue to rebound.

From the latest US federal funds rate futures to the US interest rate increase in 2016, the probability of FOMC rate hike in April is almost zero.

Yellen said in April 14th that the Fed was unlikely to make any radical moves, especially in view of the lingering uncertainty of the current global economic situation.

This means that the possibility of Yellen changing from "Pigeon" to "Eagle" in a short time is very small.

The US CPI in March was 0.1%, less than 0.2% of the market expectations; core CPI was 2.2%, less than 2.3% of market expectations.

What global investors are most concerned about is whether the FOMC meeting this week will indicate that the Fed is seriously considering raising interest rates in June.

A Reuters poll released on Friday showed that analysts kept interest rates raised in June and expected to raise interest rates again before the end of the year.

Data released by the US Commodity Futures Trading Commission (CFTC) in April 22nd showed that

And other big speculators are betting on the depreciation of the US dollar for the first time in more than two years.

Data show that as of April 19th, the dollar's net short positions reached 21567 contracts in the week.

This is the first time since 2014 July that the US dollar has moved from net to net short for the first time in 8 other major currencies.

This shows that the dollar peaked signs are already more obvious.

A large number of important data have also been released this week in Europe.

A trusted German economic growth indicator, the German Ifo survey, will be released on Monday.

A preliminary GDP data released on Wednesday will be the key to the prospect of interest rates.

German inflation figures will be released on Thursday.

Friday will be the busiest day of the week, with heavy data coming out of euro zone GDP.

Delagi, the European central bank governor, said he would continue to maintain ultra loose monetary policy and vowed to use all possible policy tools whenever needed.

Europe continues to maintain a negative interest rate policy. It is expected that the European economy will continue to recover and remain low.

It finally recovered.

The Bank of England has indicated that the interest rate will remain unchanged until the end of the referendum of the EU Member States. The country will publish GDP data on Wednesday, the first country to publish the data in G7 this year.

It is worth noting that Kuroda Higashihiko, the governor of the Bank of Japan, may again relax this week.

This will further hurt the yen.

In a recent report, Goldman Sachs said that while the Bank of Japan increased the size or extension of its debt purchase, Japan would adopt permanent financial expansion measures to show its determination to raise the economy and inflation rate.

In a comprehensive view, the three fundamental changes in the international market indicate the promotion of financial risk preference. The Hongkong Hengsheng state-owned enterprise index is the first to get out of the bottom, while the short-term volatility of A shares is mainly influenced by investor sentiment fluctuations. From the middle line, the A shares are waiting for the second wave to rise.

From the more than 2600 point of the Shanghai Composite Index after the Spring Festival, the Qianhai open source fund has clearly put forward a thousand point big rebound view, and the two month time has risen by nearly 400 points.

Graham said, "the short-term stock price is the voting machine, and the long term is the weighing machine."

Short term mood swings can only prolong the market adjustment time, and will not change the medium term rebound trend.

From overseas perspective, there are three fundamental changes in A shares, such as US stocks, QFII, RQFII, Shanghai Stock Exchange and so on, which will continue to flow into A shares. In the second half of this year, there will be potential benefits such as the opening of Shenzhen and Hong Kong and the entry of pensions into the market. At this time, we should be more confident and firm in holding shares.