Recently, the global financial market has begun to re-emerge. The market is expecting a sharp rise in the US dollar and the euro to raise interest rates again this month. In addition, after the strengthening of domestic real estate regulation, the central bank may adopt a tightening monetary policy to curb overheated investment in fixed assets and prevent inflation. . Changes in the international and domestic financial environment have led to a significant increase in the pressure on recent commodity corrections.
On May 31st, European Central Bank’s chief economist Essien, who is widely regarded as the “father of the European Central Bankâ€, officially retired, and now ECB President Jean-Claude Trichet will begin to fully control the overall situation of the European Central Bank, given that Trichet is fighting against inflation. With respect to the consistent hard-line position, the market generally expects that the European Central Bank may start raising interest rates continuously from June 8. The current basic interest rate of the Euro is 2.5%, which is far below the US dollar.
The U.S. Federal Reserve Board (FED) announced the minutes of the May monetary policy meeting a few days ago, emphasizing that inflationary pressures have risen, and traders expect that the Fed will continue to raise interest rates. In addition, an unexpectedly strong US manufacturing index in the central and western regions also increased the possibility of the Fed raising rates in June. The expectation that the US dollar will continue to raise interest rates also led to the rise of long-term interest rates in the United States. On Wednesday, the benchmark 10-year government bond fell 12/32 to yield 5.13%, which was 5 basis points higher than Tuesday's close.
The rise in European and American interest rates will lead to a significant rise in the cost of funds and other speculative commodities, and the fund’s long and short divergence will increase. Some funds may consider temporarily reducing their long positions. Affected by this, the CRB index on behalf of 17 commodities fell by 1.21%% on the 31st and fell sharply on June 1.
At the same time, domestic macro-control efforts have increased, and copper and aluminum gains have been blocked. In recent days, the state has issued specific policies for real estate regulation and control such as the "Six Nationalities" and "Fifth Rules." Investment in fixed assets such as real estate in the latter period may cool down. On 1 June, the Central Bank announced the implementation of the monetary policy report for the first quarter of this year. The report clearly shows the risk of inflation. The possibility of the central bank further tightening monetary policy is increasing. Market information shows that apart from continuing to strengthen macroeconomic controls on electrolytic aluminum, steel, and real estate, the country may also regulate other industries such as automobiles and copper.
Although the macro-control measures mentioned above will not fundamentally change the pattern of China’s economic growth and the increase in the consumption of metals and energy resources, it will undoubtedly affect the momentum of overheated consumption growth.
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