Source: Bloomberg

Author: SANGMI CHA, Iris Ouyang

Investors who have become accustomed to the Sino -US trade dispute over the years seem to be willing to risk the increase in tariffs after the US election.They favor Chinese assets and bet on the government will introduce more stimulus measures.

Whether Trump and Harris become the new leaders of the United States, global fund managers are expected to upgrade China's hostility.However, they did not completely avoid Chinese assets. Instead, the policy hoped that Beijing would continue to support the stock market, especially those stocks listed in the Mainland.

Pigeon central bank is also regarded as the gospel of local government bonds.But when it comes to renminbi, the market sentiment is not so optimistic. The currency easing policy adopted to offset the unfavorable factors after the US election may weaken the RMB exchange rate.

The mainstream point of view believes that if Trump's victory over 60%tariffs on all Chinese goods is advocated, it will generally have a greater impact on China than Harris.Nevertheless, people are not so worried that there will be market impacts like the Republican Party's victory in 2016.

Investors are also very clear that the MSCI China index has almost doubled in Trump's tenure, but it fell more than 40%during the presidential Presidential President, highlighting the other factors including China's supervision rectification.The impact of market performance.

"In my opinion, policy stimulus is more important for the Chinese economy and stock market than the US election," Jian Shi Cortesi, the investment group manager of the GAM Investment Management in Zurich, said, "The Chinese government has prepared more policies and measures to deal withTrump's potential trade measures under the victory. "

There are still less than two weeks before the US election, Trump and Harris are evenly matched, which makes it difficult for the fund to deploy positions for the expected results. This is why they pay more attention to the signal of Chinese policy signals.

Buy opportunities

Since the introduction of a series of stimulus measures in September, the Chinese stock market has rebounded sharply, and the CSI 300 index has risen by more than 20%from the previous month.Jefferies and MG Investments and other institutions believe that the selling of election -driven will be a good opportunity to increase holding Chinese stocks.

MG is responsible for stocks, multi -assets and sustainable global chief investment officers, Fabiana Fedeli, saying, "If Trump is elected, it will fluctuate, especially around the Chinese stock market." HoweverInfluence."If some declines appear, we may use it as a chance to buy."

Many investors said that it is easier to enter and exit in Hong Kong or the United States -foreign investment and exit, and stocks listed in the Mainland can better resist the impact of election fluctuations.

"China's policy driving force is very strong, and the US election should not affect many companies, especially those high -quality state -owned enterprises and high dividend enterprises," said Jon with the special situation of AsianAGEMENT in Asset MANAGEMENT.

Tariff Threat

A analysis of Bloomberg's economic research shows that compared with Trump's tweets about trade and tariffs from 2018-2019, this correlation is much lower.

At that time, "the world is integrating, so the US tariffs and policies not only have a certain impact on investors, but also have a certain impact on companies in the region."Boyo said in an interview."Now the whole world understands that we live in a different geopolitical pattern."

It is certain that when China has slowed in domestic demand, exports are a rare highlight, which means that trade tensions may become a greater economic resistance than in the past.TS Lombard believes that compared with 2018, China is more vulnerable to tariffs. If Trump's victory may postpone China's stimulus plan because it may be motionless before the US policy.

The information revealed by Harris's campaign shows that although she will not be merciful to China, it is also believed that it is not good to expand the cracks of the two largest economies in the world.She criticized Trump to provoke a trade war and compare tariffs to "Trump sales tax".

Manulife Investment Management believes that domestic government bonds and US dollar notes issued by state -owned enterprises are attractive, and the central bank is expected to maintain a pigeon position.

Kiyong Seong, chief Asian macroeconomic strategist in the French Industrial Bank, pointed out that if Trump wins and levies higher tariffs, China may depreciate the RMB to a certain extent to reduce the negative impact on exports."In turn, it will create a larger interest rate cut and allow China's interest rate to decrease -this is good for Chinese bonds."

short RMB

In the situation where Trump wins, most foreign exchange traders have fallen RMB, and RMB is expected to go up when Harris wins.With the upgrading of the trade war, in August 2019, the RMB fell to a decade low, but at the end of Trump's term of office, it rose about 6%than he was at the beginning.

Due to the possibility of Trump's victory, the beta on inflation and US debt yields has risen, the US dollar is raised this month.

"The rise in risk premiums brought by the uncertainty of tariffs should promote the strengthening of the US dollar, and the impact of offshore RMB may be the greatest," said Chidu Narayanan, a macro -strategy director of the Asia -Pacific region of Wells Fargo Securities Singapore.He added that since late September, the company's position has always tended to strengthen the dollar against the RMB, and see the volatility of the exchange rate.