In addition to hot money, A shares of incremental funding there are two important channels: activation of savings funds into the market and property funds moved to the stock market. The interest rate increase is small, the current five-year time deposit interest rate than the inflation rate of more than, other time deposit interest rates still at the level of real negative interest rates, deposit in general, not appealing to residents, is expected to continue to promote savings activation CICC that although the current round of interest rate increase may be due to accidental fluctuations in the market to increase, but overall will continue to rise for promoting the broader market factors. Overall, the RMB will not change the depreciation of the dollar interest rate trends, short-term trend of sustained inflow of hot money will not be reversed.

The rate hike will strengthen the expectation of RMB appreciation, leading to accelerated inflow of hot money to say, the gold company's research report, U.S. interest rate actually has not been the main factor to attract hot money inflows, and asset prices, especially real estate prices will very likely the dollar will reverse the trend. Despite the expected interest rate than the market, but will not change the momentum of hot money inflows, the activation trend in savings and investment funds to stimulate the market may be fought in the stock market, A shares of liquidity, "the tap" has not been tightened.

Liquidity "tap" is not tightened

"Accident" rate hike will not press the A shares "Tau"? However, from the long-term trend in terms of the RMB exchange rate is rising. First of all, speaking from the economic side, to pass the rate hike, "the government confidence in future economic growth strong" signal. This makes the rate hike fears could lead to dollar exchange rate reversed, leading to hot money out of China. Secondly, look at the past performance of China's stock market, especially the first few interest rate hike is not only the original operation will not change the market trend, but to promote the original run trend. In addition, due to the appreciation and interest rates are all tightening interest rates in the context of already, the RMB appreciation might slow down.

China rate hike by the U.S. dollar index effects of spikes, the U.S. dollar against RMB exchange rate 20 basis points in nearly 200 pick-up. However, Orient Securities believes that the medium term appreciation and there is also the possibility of raising interest rates relatively low; the dollar's recent weakness reflects the political demands for more, after the midterm elections in November to pay attention to a point in time, A recent rise in shares of the mobility of the logic is pushed off the valuation of repair, and interest rates will not be reversed this logic, therefore, the short term, the stock market "currency Feast" will continue to move forward.

"Currency Feast" to interpret depth

In addition to the appreciation of income, the asset price inflation is even more important to win the return of hot money. Moment, to promote medium-term trend of A shares a key driver of rising still missing, is still not optimistic about the future macroeconomic trends, coupled with the tightening cycle has come to the A shares of medium-term prospects must be careful.

Taking into account the long term real estate control policies are difficult to relax, CICC does not have a substantial inflow of hot money that basis. In fact, the dollar rebounded sharply is due to the tightening in China triggered a global decline in demand for commodities is expected, money out of the recent large increases in the commodity market, the temporary return of U.S. dollars. In essence, the dollar is rising risk aversion with the emergence of short-term technical rebound rebound. trend in the past and the hot money has a closer relationship. Again, the surface stresses from the capital, this small negative interest rate hike did not completely change the situation, capital and liquidity of the investment will be virtually impossible to raise interest rates immediately impacts. 20, the Shanghai and Shenzhen exchanges opened lower after the shock higher, closed at a high of six months. The interest rate with the early introduction of the real estate control policies, the property market may force the transfer of funds to accelerate the stock market, and from that point of view, raising interest rates further relax the A shares instead of the faucet.

. Now, several stock market liquidity "tap" will not raise interest rates by slightly tightening the hand of this policy, A-cap stocks although it can be repeated, but "money Feast" has been turned off.
。 " closure_uid_pw218r="75">In addition, interest rates will also increase the market for foreign capital to accelerate into the domestic market is expected to further increase the confidence of domestic capital investment.

Rate hike cycle in the early allocation of funds but the stock will likely rise further, the configuration of fixed income products will decline substantially, so boosting the stock market inflows. In theory, interest rates will lead to liquidity tensions. China's short-term interest rates will not change the U.S. economic recovery process, it will not affect U.S. policy of quantitative easing, it would not fundamentally change the dollar decline.

Although being suppressed by the real estate market, but were suppressed in the absence of hot money, the overall valuation of A shares at a reasonable level has great room for maneuvers.