The Chinese yuan is soaring, just one step away from breaking the 7 barrier?

On Friday, the three major A-share indexes all rose sharply, is the golden era of yuan assets here?

If the US dollar cuts interest rates, it would be logical for yuan assets to rise, so how will the stock market and property market rise?

Don't oversimplify this matter.

The yuan exchange rate continues to rise.

As of 22:30 on August 30th, Beijing time, the offshore yuan against the US dollar broke through the 7.08 level, reporting 7.0796, and the onshore yuan against the US dollar reported 7.0863.

When was the last time the yuan exchange rate was at this high point?

In the second half of 2022, of course, before that, it was in the 6 range.

At that time, our exports were skyrocketing, with exports to the United States reaching as high as 536.8 billion US dollars that year, and the world was optimistic about the strong recovery of the Chinese economy.

Why is the yuan exchange rate soaring this time?

There are two fundamental reasons.

First, the stable growth of China's economy has supported the basic plate of the exchange rate.

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Don't think this is useless, in fact, this is where the most fundamental confidence in the exchange rate lies.

If the economy is weak or even declining, would people have confidence in your currency?

Will they believe in your future purchasing power?

More importantly, the US dollar is going to cut interest rates.

Or no matter whether the US dollar will cut interest rates in September, at least the market generally believes it will cut interest rates.

Yesterday, a report from Goldman Sachs said that the Federal Reserve is expected to cut interest rates by 25 basis points in September, November, and December, and if the August employment report to be released next week shows a weak job market, it may cut interest rates by 50 basis points in September.

Declare that we still believe that the US dollar will not cut interest rates in September.

As for why, please refer to our previous content, and we will not repeat it today.

However, our view certainly cannot stop the enthusiasm of the market.

So, US dollar capital has increased its holdings of yuan bonds in advance, buying 20 billion US dollars in July alone.

What is this for?

This is to sneak in advance, waiting for the opportunity to act, and to bottom out yuan assets.

Regardless of whether there is an opportunity to bottom out, things should be done this way.

The bigger thing is that Chinese enterprises have started to settle foreign exchange and return funds in advance.

How large is the scale of these two funds?

Can it impact the rise of yuan assets?

Goldman Sachs said that the current scale of unsettled foreign exchange is 30 billion US dollars, and British economist Stephen King said that Chinese enterprises have 200 billion US dollars of overseas investments, and it is estimated that 100 billion US dollars will return.

Regardless of how much US dollar capital wants to come in, and regardless of how much capital Chinese enterprises have to settle foreign exchange and return, although the specific amount is hard to estimate, the overall trend is always correct.

The overall trend is that regardless of whether the US dollar cuts interest rates in September or November, capital will flow back to China.

Americans will definitely try to block it, including prohibiting investment in some of our technology fields.

Some people say they will create friction around us or even launch proxy wars to intimidate capital from coming in.

Are these methods useful?

They are definitely useful.

Can they block the capital from flowing back to China?

Perhaps they can block some, but they cannot stop the overall trend, so some capital will definitely come in.

This time, the US dollar interest rate hike, the US has accumulated a terrifying amount of US dollars.

Once the US dollar cuts interest rates, there will be a large-scale capital flowing to the world.

Can Americans block it?

So, how much capital will come in?

Let's not talk about the specific numbers, as soon as we mentioned specific numbers before, the platform gave a warning.

Economists can talk nonsense, but ordinary people have no right to guess.

Many people care about is that when the US dollar cuts interest rates, how will our stock market and property market rise?

First of all, the most basic logic is that a large amount of capital has come in or returned, and the rise of yuan assets is inevitable, because there is more money, and the goods seem less, which will lead to inflation.

As yuan assets rise, will the core assets of the stock market and property market not rise?

They will all rise, and the key is how they will rise.

The stock market's response is definitely the fastest because the threshold of the stock market is the lowest, and it is easy to enter; the sensitivity of the stock market is also the highest.

So everyone has seen that the stock market has already risen on Friday.

By the end of this year, at the latest by the beginning of next year, there is likely to be a bull market.

The property market is not easy to say.

The response of the property market is usually several beats slower because real estate has a threshold, and many places cannot be bought casually.

In addition, the current situation is that foreign capital will not buy houses, and funds returning will not buy houses.

So, when will the real estate market wait?

Now the real estate market is already flooded, and there are very few people buying houses.

It is too difficult for this market to pick up.

So, the real estate market will have to wait until all the capital in China is full, full to the point of overflowing and nowhere to go, and naturally some will flow into the real estate market.

This is the reason why the real estate market is several beats slower.

We estimate that the real estate market will have to wait at least three to four quarters before it will slowly rise.

Note that it is a slow rise.

In the past few years, it has been too injured, and the body has been damaged, and there is no physical strength to run fast.

Speaking of this, many people may not believe it, and there is a reason not to believe it.

In fact, there is another key factor, that is, whether the Chinese economy can rise.

If the Chinese economy is still in the current state in the next one or two years, it is estimated that the response of the property market will be even slower.

The economy is the basic plate of the stock market and the confidence plate of the property market.

In short, when the US dollar cuts interest rates, China will be better off than the previous two years, which is certain.