On Thursday, July 13th, against the backdrop of a larger-than-expected cooling of inflation in the United States and a weakened US dollar, Chinese assets rebounded across the board.
Chinese concept stocks soared in overnight trading. The Chinese concept index has been leading the way for three consecutive days, with the ETF KWEB rising by over 4%, CQQQ rising by over 3%, and the Nasdaq Golden Dragon China Index (HXC) rising by 3.4%. It broke through the 7,000-point mark for the first time since June 16th. Before the US stock market opened on Thursday, Chinese concept stocks remained strong, and popular stocks rose across the board.
With the weakness of the US dollar, the offshore renminbi has been surging. The overnight US dollar index (DXY) fell by 1.2% and broke below the 101 level, hitting a three-month intraday low since April 17th after five consecutive days of decline. The Bloomberg Dollar Index hit a 14-month low. The offshore renminbi approached 7.16 yuan, rising nearly 520 points from the previous day's closing price, reaching the highest level since June 20th. In the past week, both onshore and offshore renminbi exchange rates have rebounded strongly by nearly a thousand points, with gains exceeding 1%.
<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/173bf221-0225-4816-aee2-c9cd3c6a28d9.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="Image" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/173bf221-0225-4816-aee2-c9cd3c6a28d9.png"/>
Hong Kong stocks opened higher in the morning and continued to rise throughout the day. The Hang Seng Index and the H-share index both rose by 2.6%, while the Hang Seng Tech Index rose by 3.8%, wiping out the previous month's decline. The total turnover of the market exceeded HKD 100 billion.
In the A-share market, all three major indexes rose by more than 1%, with a turnover of nearly CNY 1 trillion and over 3,700 stocks rising. In terms of trading volume, as of the close of A-shares, northbound funds had a net purchase of nearly CNY 13.6 billion, reaching a new high since January 30th.
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The US CPI for June, released last night, was lower than Wall Street's expectations. The year-on-year CPI for June fell from 4.0% to 3.0%, lower than Bloomberg's consensus expectation of 3.1%, reaching a new low since April 2021. The core CPI fell by 0.5 percentage points to 4.8% compared to the previous month, lower than Bloomberg's consensus expectation of 5.0%. The month-on-month CPI rose from 0.1% in May to 0.2%, lower than Bloomberg's consensus expectation of 0.3%, and the core CPI fell by 0.2 percentage points to 0.2%, also lower than the expectation of 0.3%.
Analysis indicates that the decline in the month-on-month CPI is mainly due to the sub-items of used cars, housing, and post-pandemic seasonal decline in travel, while the significant year-on-year decline in CPI is mainly affected by the high base.
The cooling data also indicates that the Fed's interest rate hikes are nearing an end.
Huatai Securities believes that the inflation trend in the United States is lower than expected domestically, and the expectation of Fed interest rate hikes may be marginally revised downward, reducing the pressure for the appreciation of the US dollar. The domestic economy is also showing cyclical characteristics, and changes in the underlying trend will trigger countercyclical adjustments. The improvement in growth expectations will also provide support for the renminbi exchange rate. This round of downward fluctuations in the renminbi exchange rate may be nearing its end.
In addition, the recently held platform enterprise symposium has injected a strong stimulant into the private economy. Premier Li Keqiang of the State Council pointed out that the platform economy has emerged in the tide of era development, providing new space for expanding demand, a new engine for innovative development, a new channel for employment and entrepreneurship, and new support for public services. Its position and role in the overall development are increasingly prominent. In the new journey of building a socialist modernized country in an all-round way, the platform economy has great potential.
Experts believe that the symposium is essentially an encouragement and boost to the platform economy and the private economy. Subsequently, it is believed that more attention will be paid to issues related to the development of the platform economy.

00HSI

US inflation cools more than expected, as the US dollar weakens, the renminbi rebounds, and Chinese assets such as A-shares, Hong Kong stocks, and Chinese concept stocks all rebound. Northbound funds see the largest single-day net inflow in nearly 5 months.

China's assets rebounded strongly!