The Rebalancing Of Global Market Risk Is Very Powerful.

The Fed's Conference on interest rates was flat and the market reaction was flat; the BoJ conference was dull, and the market reaction was fierce. Such tacit simplicity is actually another kind of insipid. Although the Fed's statement revoked external risks, the Fed still complied with the market and made concessions to continue to make the US dollar relatively vulnerable. The Bank of Japan, contrary to market expectations, acted in a desperate way to see the yen continue to rise and accumulate potential for the depreciation of the yen. In fact, the two major central banks have made concessions for the rebalancing of global market risks, but the former is the initiative and the latter is passive.

The pursuit of higher inflation and, more accurately, the relatively low inflation scissors gap (the difference between CPI and PPI) is the initial consensus of the current global market. At present, all major central banks want to injecting money into the real economy. And from the credit money to the real economy, the core and leading indicators are not CPI but inflation scissors.

When labor productivity in the United States is rising relative to other economies, it is necessary to raise interest rates from the US economic data. However, the increase in interest rate of the US dollar will inevitably lead to the appreciation of the US dollar. The scissors gap of other economies will continue to rise, and then spiral upward with the US dollar, and some economies will have a shortage of capital. This process is actually the process of shearing the inflation scissors in the global market.

In the middle of last year, American economy At the margin, it tends to be an internal and external equilibrium. The Federal Reserve recognised the increase in interest rates. Then, the global capital market bid farewell to the steady state structure, the capital concentrated in the US dollar market, and the energy and resources plummeted simultaneously. The EU, Japan and emerging market economies increased the scissors gap sharply. The Fed raised interest and rationality was questioned. In March, the G20 central bank governor and finance ministers' meeting was held in Shanghai. The global monetary policy was intervened in the medium term, and the rhythm of the Federal Reserve raising interest rate was disrupted.

At present, the scissors gap between Japan and the EU is at a historically high level. Emerging economies and resource countries are still rising. As long as this index is not peaked, the world is still at a premium. market risk It has not been completely relieved. From a systematic perspective, global market risks are all evolving from the risk of credit dollars. Therefore, in order to achieve this initial consensus, the US dollar must be relatively weak.

Since there was no interest conference in May, the Fed's April Conference on interest rates laid the groundwork for the continued low inflation scissors gap worldwide. However, the probability of increasing interest rates in September is not significant. In other words, the two or three quarter is a relative "security period".

Ideally, during this period, the world's main economic weight returned to the "re stimulation" channel, PPI rebounded, inflation scissors downward, capital flows back from the dollar market to resource and emerging markets, and global market risks were rebalanced. But it is not difficult to really achieve this. The problem of junk debt in developed economies, Emerging economies Debt problems, sovereign debt problems in the Middle East and partial political risks will trigger global credit risks.

Then, how long can the Federal Reserve last? From the statement of interest, the Fed has focused its attention on external credit risk back to the local economy. According to the latest data, the US economic fundamentals show a slight stagflation feature. If the US dollar continues to be low and exports are difficult to improve, the characteristics of stagflation will be more obvious. From this perspective, the US dollar needs to raise interest rates.

The problem is that, after second years of bull market in history, asset prices in the United States are soaring, and the Federal Reserve has become increasingly difficult to achieve the goal of injecting money into the real economy, which is a major pain in the monetary policy framework of the Federal Reserve. Therefore, on the one hand, from the perspective of external risks, on the other hand, from the perspective of the pain of monetary policy, the Fed will continue to maintain tension in the short term, so as to maintain the relative weakness of the US dollar.