How will the market react to a divergence between the monetary policies of China and the U.S.?

How will the market react to a divergence between the monetary policies of China and the U.S.?

In his latest CGTN report, Chief Strategist, Jimmy Zhu, discussed the following:

✅ Investors will be paying close attention to the policy differences between the two central banks towards Q4.

✅ China's Consumer Price Index rose by 2.1%, compared to U.S.'s 8.3%, due to the Russia-Ukraine conflict.

✅ China is expected to introduce more stimulus measures to boost domestic demands, with infrastructure construction being one of the most important tools.

✅ In contrast, the Fed is committed to bringing inflation down, even if tightening policies could harm the U.S. economic growth.

✅ China's interest rate swap dropped this year, reflecting investors' views on the future rate and liquidity outlook.

✅ As the Fed starts to aggressively drain liquidity from June, traders will continue to access the recession that is driven by Fed's tightening.

✅Yuan is likely to stay soft versus the dollar until the end of Q3, bringing a positive impact on the overall economy.

Read the full report here: https://news.cgtn.com/news/2022-05-30/How-will-market-react-to-diverging-monetary-policy-of-China-U-S--1asiqUqnlSM/index.html