On October 21, the onshore RMB / US dollar exchange rate rose above the 6.65 level, while the offshore RMB / US dollar exchange rate once rose above the 6.63 level, with a one-day appreciation of more than 300 BP, both of which reached a new high since July 2018.
International oil price falls sharply
International oil prices fell sharply on Wednesday after the second outbreak of overseas epidemic triggered market concerns. As of the end of Wednesday, the December contract of NYMEX WTI crude oil futures closed at US $40.03/barrel, a decrease of 4%, while ice Brent crude oil futures for December contract closed at $41.73/barrel, a decrease of 3.31%.
For the trend of crude oil market, Li WANYING, senior energy and chemical analyst of East China Sea Futures Research Institute, believes that the current market is still waiting for the direction selection signal.
According to the 23rd Meeting of the ministerial Joint Monitoring Committee (jmmc) of OPEC and its allies for production reduction held on October 19, 2020, the overall implementation rate of production reduction of OPEC and its allies reached 102%, the highest level since May 2020 (excluding the voluntary excess production reduction made by Saudi Arabia, Kuwait and UAE in June 2020).
Under such circumstances, she believes that it is not very possible for OPEC to completely change its production reduction thinking in the fourth quarter. However, under the premise of overall shrinking demand, it is doubtful whether some countries with high fiscal dependence on crude oil export can fully implement the contract in the future, and the effective boost of production reduction on market prices will decrease marginally.
In fact, the recent spread of the epidemic in the United States and Europe, many countries have introduced more stringent social closure measures, such as curfews. Under such circumstances, the CFTC position reflects that the long funds are more cautious.
Under the background of post epidemic situation, it may take more time to restore the crude oil price differential structure to the backwardation structure. On the low level, the price gap between supply and demand is still not optimistic. In the United States, the number of wells drilled in Baker Hughes has increased in recent weeks, reflecting that the current oil price can cover the production cost of some wells in the Permian production area. Under such circumstances, Li WANYING said that the oil price in the fourth quarter remained neutral.
In fact, in her opinion, there are many macro events in the fourth quarter, but Im afraid it will be difficult for the oil price to break through and maintain a wide range of oscillation without the extremely good news.
Referring to the recent rise in copper prices at home and abroad, Wang Yingying, a non-ferrous researcher in the commodity Department of Galaxy futures, believes that it is mainly affected by the unprecedented release of water by the global central bank this year.
Under the background of loose global liquidity and the steady recovery of global economy, all of these provide a relatively good condition for copper prices to rise. South China Futures metal analyst Wang still Jian explained.
Wang still agrees with this. In his view, in the future period of time, in the case of tight supply and steady recovery of demand, the Shanghai copper rate will maintain an upward trend. In particular, the United States is about to launch a new stimulus package in the later period, and liquidity easing is expected to continue further. In addition, Chinas economy recovered rapidly after the outbreak, and the domestic new crown vaccine has entered the vaccination stage, which is a favorable guarantee for the stable recovery of the economy in the later period.
However, he also acknowledged that there are still some risk points in the copper market in the future, especially the US election and the second outbreak of the new crown epidemic, which will have a certain impact on copper prices.
Both onshore and offshore RMB hit new highs in more than two years
Ma Yan, macro foreign exchange analyst of South China futures, believes that this round of RMB exchange rate rise is mainly affected by the progress of US fiscal stimulus negotiations, Chinas leading global epidemic prevention and control, and the relative relaxation of Sino US relations.
It is understood that, with the recent progress in the US fiscal stimulus negotiations, the markets hope for the progress of follow-up negotiations and reaching an agreement before the election has revived, which has improved the risk appetite, superimposed on the hawkish signals released by the European Central Bank, which directly led to the weakening of the dollar index to around 93.10. In addition, China leads the world in epidemic prevention and control. At present, the growth rate of overseas economy is still sluggish. Chinas GDP growth rate in the third quarter has recovered to 4.9%, and the economic structure is obviously improved compared with that in the second quarter. Moreover, the current European epidemic situation continues to worsen, and the US epidemic situation also shows signs of rising for the third time. Chinas economic growth advantage continues to exist, and the marginal growth gap is expected to expand. These are all strong supports for the RMB. Ma Yan said.
In addition, she believes that the recent relative relaxation of Sino US relations is also the reason for the sharp appreciation of the RMB. After all, the RMB is more affected by the domestic economy and the US dollar index. In the case of easing Sino US friction, if the domestic economy and the US dollar index form a resonance, it will lead to a substantial appreciation of the RMB.
However, in view of the recent uncertainties, Ma believes that although the RMB exchange rate is generally strong, it will not continue to rise significantly in the future.
She said that at present, there is great uncertainty in the results of the US general election, and the positive effects of the US fiscal stimulus bill negotiations have been reflected in the market ahead of time. Under such circumstances, if the outcome of the stimulus bill negotiation does not meet market expectations, it may lead to a rebound in the US dollar index. At the same time, considering the current relative recovery of the European and American economies, it does not support the continued strength of the euro, and the fall of the US dollar index does not have fundamental support in the short term. In addition, the purpose of the central banks recent reduction of foreign exchange risk reserve ratio is to stabilize the RMB exchange rate and guide the two-way fluctuation of the exchange rate. If there is obvious herd behavior and pro cyclical behavior in the RMB exchange rate, it is not ruled out that the central bank can guide the short-term exchange rate expectation by suspending the counter cyclical factor.
Under such circumstances, Ma suggested that foreign exchange investors should focus on the US election, the US fiscal stimulus bill, the brexit negotiations, the development of the epidemic situation in the United States and Europe, as well as the progress of vaccine research and development.
In the U. After all, recent polls show that Bidens campaign advantage over trump has narrowed further. This uncertainty will intensify risk appetite volatility in the short term, driving severe fluctuations in global financial markets, and may affect the U.S. economy and monetary policy in the long run, Ma told reporters.
As for the US fiscal stimulus bill, she believes that it is a short-term risk point, which mainly affects the US economic expectations and inflation expectations. At the same time, the negotiation progress of the stimulus bill will also lead to the volatility of risk preference, which will affect the trend of RMB exchange rate.
A-share short-term wait-and-see
On October 21, the A-share market continued to oscillate downward. By the end of the day, the Shanghai Composite Index closed at 3325.02 points, down 0.09%; the Shenzhen composite index closed at 13467.97 points, down 1%; the gem index closed at 2700.53 points, down 1.46%. The net outflow of northward funds was 6.922 billion yuan.
With the obvious differentiation trend of A-share market, the trend of the three major periods also appeared differentiation. Shanghai and Shenzhen 300 stock index futures main if2011 contract and Shanghai Stock Exchange 50 stock index futures main ih2011 contract closed up 0.24% and 0.63% respectively. As for the main ic2011 contract of CSI 500 stock index futures, it closed down 0.78%.
Mao Lei, a researcher at Guotai Junan Futures Financial Derivatives Research Institute, believes that the excessive rebound after the National Day Festival is one of the reasons for the recent A-share downturn. Before the fundamentals did not appear to a greater extent of substantial benefit, but a shares still appeared after the festival a substantial upward. The current decline belongs to the short-term overdraft after the rise in the market Chonggao fall.
However, after the U.S. election boots landed, the market risk appetite is expected to pick up, and the probability rate will improve the enthusiasm of investors to enter the market. In addition, the Politburo meeting and the central economic work conference will set the tone for next years policy. In Mao Leis view, once the policy level continues to be mild and loose, it will have a more obvious supporting effect on the stock market. Of course, if the policy turns to deleveraging, preventing and resolving financial risks, and monetary policy tends to tighten, it will further undermine the stock market. Mao Lei said.
In the view of Zhao Xiaoxia, chief researcher of green Dahua futures financial futures, the A-share market is likely to strengthen within the year. After all, at present, the economy has not completely returned to normal state. Therefore, monetary policy is expected to continue to exert force in the future for a period of time. In addition, the RMB exchange rate is relatively strong in the near future. Under such circumstances, the attraction of a shares is relatively strong. She said.
However, Zhao Xiaoxia also admitted that there are still certain risk factors in the A-share market for some time to come. For example, monetary policy may tighten more than expected, and the US election will further suppress risk appetite. Mr. Mao suggested that investors should wait and see in the short term. After all, the trading volume of the two markets continues to fall. Before the final boot landing, it is expected that the futures index will hardly have a more obvious trend, and the rate will mainly fluctuate in a wide range. On the upper edge of the interval, it is more difficult to rebound, and it is easy to fall but difficult to rise; at the lower edge of the interval, there is still support from warmer policies and economic recovery. In view of this, he told the futures daily that in the later stage, according to the change of fundamentals, after the uncertain event falls, he can choose the opportunity to follow the formation of the trend and participate in a round of market quotation. As for the futures index, Zhao Xiaoxia suggested that investors should focus on the long-term. At present, stock index futures are still in a discount state, and there will be excess returns by replacing ETF with futures index. Investors can take low-frequency, low position way to do long-term investment. Source: futures daily editor: Yang Bin_ NF4368
However, Zhao Xiaoxia also admitted that there are still certain risk factors in the A-share market for some time to come. For example, monetary policy may tighten more than expected, and the US election will further suppress risk appetite.
Mr. Mao suggested that investors should wait and see in the short term. After all, the trading volume of the two markets continues to fall. Before the final boot landing, it is expected that the futures index will hardly have a more obvious trend, and the rate will mainly fluctuate in a wide range. On the upper edge of the interval, it is more difficult to rebound, and it is easy to fall but difficult to rise; at the lower edge of the interval, there is still support from warmer policies and economic recovery. In view of this, he told the futures daily that in the later stage, according to the change of fundamentals, after the uncertain event falls, he can choose the opportunity to follow the formation of the trend and participate in a round of market quotation.
As for the futures index, Zhao Xiaoxia suggested that investors should focus on the long-term. At present, stock index futures are still in a discount state, and there will be excess returns by replacing ETF with futures index. Investors can take low-frequency, low position way to do long-term investment.