The yen has continued to depreciate recently.
Chen Zhengluo, senior investment strategist at Citibank's wealth management business, estimates that the yen will fall to 138 against the dollar in the next three months, hitting a more than 20-year low, mainly because the Bank of Japan still insists on maintaining the loose monetary policy at this month's interest rate meeting. ; In contrast, the aggressive interest rate hikes in the United States have widened the interest rate gap between the United States and Japan.
The bank expects the U.S. to hike interest rates by a total of 2% for the rest of the year.
However, if measured in the next 6 to 12 months, it is believed that the yen against the US dollar is expected to rise to the 130 level, mainly because the US dollar index has a chance to peak, and it is estimated that the probability of a recession in the United States next year will reach 40%.
The market expects the Fed to turn around and cut interest rates in the middle of next year
Regarding the U.S. economy, Liao Jiahao, head of Citibank’s investment strategy and global wealth planning department, said that in the short term, U.S. inflation is high, and it is expected that inflation will still be above 6.5% by the end of the year. Therefore, the Federal Reserve will focus on the priority of economic growth and inflation In order to suppress inflation, it is expected that the United States will increase interest rates by 75 basis points in July, and raise interest rates by half a percentage point in September and November respectively.
However, looking forward to next year, the bank expects that the risk of recession in the United States will increase to 40%. Now the market has begun to estimate that the Fed will have the opportunity to turn around and cut interest rates in the middle of next year. Therefore, it is expected that the dollar index will peak after rising to 107.31 in the next three months. ; The trend is consistent with the US long-term bond interest rate is expected to peak.
The three major sectors capture the bottoming out of the mainland economy
In other foreign exchange markets, Citi expects the RMB to depreciate to 6.95 against the U.S. dollar in the next 6 to 12 months, as the mainland will continue to cut interest rates to stimulate the economy. idea.
In terms of economic growth, the bank estimated that the second quarter was the worst case for the mainland, with growth rebounding to 4.8% and 5.5% in the third and fourth quarters.
Full-year growth is expected to be 3.9%.
Therefore, I am optimistic about the performance of Chinese stocks. It is expected that the three major sectors of automobile stocks, industrial stocks and consumer stocks can benefit from the bottoming out of the mainland economy.