RMB Stronger, Indirect Positive A Shares

The Federal Reserve has announced that interest rates will remain unchanged, but economic growth will be reduced.

To raise the threshold for further rate hikes in the future, the US dollar index continued to tumbled, falling 16-17 in March and 1.1% over two days, the biggest two day decline since 2009.

In fact, in addition to the weakness of the US dollar, the recent strengthening of the renminbi is considered to be a response of the Chinese government to positive signals.

Zhou Xiaochuan, President of the central bank, said at the press conference of the two sessions that China's current balance of payments is in good condition, its international competitiveness is still strong, and cross-border capital flows are in the normal range.

In this regard, the chief economist of the Bank of communications, Lian Ping, said that from the market point of view, the external market has obviously changed the RMB devaluation expectations.

January

It is expected that after February, after the regulation of the market, including the regulation of the offshore and offshore RMB markets, the RMB exchange rate will gradually stabilize and the reasons for the acceleration of capital outflow are insufficient.

At present, we still maintain the judgement of the US dollar's phased peaked and the short term two-way fluctuation of the RMB.

Wang Ran, an economist at HSBC, said the possibility of a substantial devaluation of the renminbi was less likely.

From the perspective of policy willingness, the government has enough policy tools to protect growth. From the perspective of industry, there are signs of easing in infrastructure and real estate industries.

There is no need to rely on a significant depreciation of the currency to stimulate the economy.

At the same time, the prospect of global economic recovery is uncertain, and the effect of the devaluation of the currency on exports is not clear.

Securities analysts believe that in the context of the Fed's slowing pace of interest rate hikes and the release of dove policy signals, the renminbi will be for a long time in the future.

At present, the mainstream of the market is expected to be positive again.

At the same time, this will also help ease the market's worries about capital outflow, which indirectly helps to consolidate the underlying foundation and is good for the rebound of A shares.

In 2015, the total value of cash in the euro area exceeded 1 trillion euros, of which about 30% was 500 Euro denomination.

But as the largest currency in the euro, the 500 euro notes are mainly in the banking or related business areas.

Many Europeans did not see 500 euro banknotes, ATM basically did not provide 500 Euro denominated bills, many restaurants, shops and so on were rejected.

Consumers usually need to exchange small denominations before consumption.

Since the beginning of this year, the market value of European banking has evaporated nearly 1/4.

But Delagi said that compared to the 4 years ago when the banking crisis broke out in Europe, the banking sector can now better prevent the crisis, and the ability to resist risks is increasing both in banking and in the financial system as a whole.

The share prices of European banks, including Deutsche Bank and Societe Generale, fluctuated sharply last week.

Delagi said: "the sharp drop in bank shares reflects that this industry is highly sensitive to the weaker than expected economic outlook."

He also said investors were also worried that the banking sector could suffer from lower commodity prices, tighter regulation and lower interest rates.

However, Delagi said that the European banking industry now has a more powerful capital cushion than it was 4 years ago. "In the eurozone, the banking industry is in a very different position now than in 2012."

He said that the European Central Bank is ready to take action to consolidate the euro zone economy, "we will not hesitate to act."

Delagi suggested that the European Central Bank could adopt further monetary easing policy next month to cope with the high uncertainty of weak investment, slow growth of manufacturing industry, geopolitical risk and global economic environment.

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