Since the beginning of the year, overseas assets have experienced a "frenzy"
Gold, US dollar, and Bitcoin are soaring, and historical patterns are being broken
In the long run, there is a certain degree of negative correlation between the prices of the US dollar and gold, which means that the appreciation of one asset is usually accompanied by the depreciation of another asset. But since the beginning of this year, there has been a divergence in the correlation between gold and the US dollar, and in the process, Bitcoin, as a risky asset, has also seen a significant rise. The historical pattern seems to have been abandoned by the market.
If the economy is strong, the US dollar will rise; it is gold that betrays the US dollar
Since March, economic data has exceeded expectations, and global manufacturing recovery expectations have been on the rise, leading to disagreements in the market regarding the timing of the first interest rate cut. In this context, the logic behind the rise of the US dollar index is clear. However, in contrast, gold prices, Bitcoin, and others still hit historic highs, which is not in line with the law of asset rotation in history. From the strong economic data, it appears that gold has betrayed the US dollar.
The credit crisis drives the demand for hedging, and Bitcoin has been speculated into "gold"
Of course, the rise in gold is driven by multiple factors. First, the market is worried about the "credit crisis" of the US dollar and US bonds when the interest rate of US bonds is high, treasury bond is issued continuously, and the total debt continues to exceed the ceiling. Secondly, geopolitical and current global turmoil have also driven the demand for safe haven allocation of gold. Thirdly, the buying and selling behavior of global central banks has also driven the medium to long-term upward trend of gold prices. In the end, the demand for hedging overflowed to Bitcoin, and risky assets were also speculated into "gold".
Real interest rates remain the core of medium - and long-term asset pricing
Real interest rate=nominal interest rate - inflation rate, which is the borrower's true cost of funds and the lender's true returns received, and is a determining factor that influences economic entities in making investment decisions. At the current inflation level, the sustained upward trend of various assets needs to be based on the premise of a decline in US bond interest rates, otherwise it will be suppressed by tight currency and high interest rates in turn. The direction of mid-term US interest rate cuts may be certain, but the process is not a smooth one. At present, assets may not have risen incorrectly, but there has been a clear race.
In 2024, domestic asset pricing hit a "critical point"
Pricing hits a "critical point" and domestic assets are "rapidly changing"
With the release of A-share risks in the past two years and the accumulation of "debt bulls" in the past three years, domestic assets have reached a critical point of cost-effectiveness, with the cost-effectiveness of stocks and bonds and the comprehensive net price index of Chinese bonds continuously breaking historical extremes. Although it is difficult to determine whether a turning point has arrived at present, changes may come at any time.
The fluctuation of long and short interest rates is the result of extreme trading
The "limit down" change of a single treasury bond has little impact on the market, but it reflects the current vulnerability of the bond market. On the one hand, after the previous decline in interest rates reaches a historical peak, the volatility of the bond market will gradually increase; On the other hand, in the process of pursuing returns, under the extreme trading behavior of "prolonging periods and adding leverage", any slight changes in the bond market are prone to causing anomalies in the bond market. How to avoid the occurrence of negative feedback is the core proposition in the second half of the "debt bull".
The short end has a "cost-effectiveness" and is a warm "harbor" in the current bond market
An excessively flattened curve often ends in two forms. One is to complete the adjustment of the long end relative to the short end; The second is to complete the downlink of the short end relative to the long end. Regardless of the form in which the curve is steepened in the future, the short end is undoubtedly the relatively stable "destination" of the bond market.
The core of domestic asset pricing depends on confidence and the degree of economic recovery
Short term uncertainty is stirring the hearts of investors; The medium to long term "cost-effectiveness" is the "poetry and distance" that should be sought in investment. The core focus of current domestic asset pricing is mainly on two changes: first, whether the pessimistic expectations of the medium and long-term economy can be reversed, especially the restoration of confidence; Secondly, economic data is constantly being validated to determine whether continuous improvement can be achieved. With the intensification of policies and the rebound of inventory cycles, a weak economic recovery may be on the way in the future.
(Source: Fuguo Fund)