13 Jul 2018

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In the first half of 2018, 10-year Treasury yield fell from 3.92% to 3.52%, and CSI 300 Index fell about 13% compared with beginning of the year, partially due to the investors' concern about the economic downturn caused by changes in Sino-US trade policy. In the case of economic data, the economic growth is still stable with low inflation.
In the second half, although economic growth will be weaker due to changes in trade policy, inflation will still has an upward risk. Higher oil and food prices put some upward pressure on headline inflation. CPI inflation will likely pick up to 2.5% YoY in 2018, with the potential “high points” in third quarter. Therefore, we expect nominal interest rates to rise, with 10-year Treasury yield will fluctuate between 3.5% and 4.0%.
Otherwise, a stronger dollar would affect emerging market growth and lead to perhaps premature tightening on PBoC and other developed market central banks. The pressure on CNY depreciation will constrain loose monetary policy space.
does this sound natural?

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