CICC Morning Call

English summary

260727 — Macro — [Why imports are surging] Breaking down by source, product mix, volume and price, we find the import surge is driven mainly by a few commodities such as AI and precious metals; re-import ratio also rose, with price contribution higher than volume. — FX — [How does fiscal risk enter exchange rate pricing?] In the base case, sterling may be the most sensitive among the three to joint fiscal news shocks; stabilization requires fiscal credibility or issuance structure improvement. The traditional JGB yield support for the yen is weakening; direction depends on BoJ absorption willingness and fiscal path. — Strategy — [Is de-dollarization over?] The short-term stabilization of the dollar's reserve share does not change the long-term de-dollarization trend. US equities cannot replace Treasuries as reserve assets; AI may not necessarily strengthen the dollar's status, and rising US government debt continues to erode the consensus on Treasuries as "safe assets". ...