economic recovery, dollar depreciation pushing inflation expectations higher

Graphics/Wang Jianhua Hudong Lin Click here to view all financial news pictures The recent rise in inflation expectations and the sharp rise in commodity prices, such as international crude oil and non-ferrous metals, have been affected by the upturn in economic data in major economies and the weakening of the dollar.　　In the inflationary environment, oil, coal, metals and other resource sectors benefited the most, real estate, banking, insurance and other industries will usher in a good opportunity. Signs of economic recovery are even more apparent. Recent economic data in some developed countries have improved, and signs of a steady recovery are further evident. Meanwhile, America's quantitative easing led to a weakening of the dollar.　　With this double impact, inflation expectations are starting to rise. As the fiscal and monetary policy stimulus began to show, the recent major developed countries to improve economic data, market confidence in the economic recovery. Australia's GDP grew by 0.4% in the first quarter, while market forecasts will fall by 0.2%. The UK's consumer confidence index rose to 53 in May, the highest level since November 2008. The U.S. April Housing Sales index rose 6.7% to 90.3 on a month-on-month basis, the biggest monthly increase in nearly seven years; auto sales in May also hit the best level since the year. Japan's industrial output in April grew 5.2% from March, exceeding market expectations.　　Retail sales rose by 0.5% in April, after a natural-day and seasonal adjustment, while the average market expected the figure to fall 0.1%. For the Chinese economy, the May PMI index fell much better than the market forecast and remained above 50%, reflecting the economic upturn.　　It is worth mentioning that the new export order index has rebounded to above 50% for the first time since last November, reflecting a marked deterioration in China's exports that may be stabilizing and showing signs of improvement. In addition, the recent BDI index rose significantly, from May 27 to 3,164 points to June 2 4,291 points, a sharp rise of 1000多 points.　　This also shows that the economic situation in countries is warming up and international trade is getting hotter. The weakening of the dollar helped push inflation expectations in addition to a steady recovery in the economy, the recent continued depreciation of the dollar is another important factor in boosting inflationary expectations. The dollar index fell from 82.83 on May 13 to 79.50 in June 3.　　As a effect, the yield on the 5-year Treasury note rose from 1.98% in May 13 to 2.43% in June 3. The quantitative easing of U.S. money-buying debt is no doubt a direct cause of the dollar's downward pressure and a global loosening of monetary policy, leading to a flood of liquidity.　　At the same time, emerging markets such as China and India have fallen significantly below developed economies in the current crisis, and a sharp interest rate cut in developed countries has led to bigger spreads in emerging markets, tilting global liquidity into emerging markets and exacerbating the dollar's depreciation. Everbright Securities analysts pointed out that, as the economy stabilized, international capital flows will start again, the U.S. economic recovery, the depreciation of the dollar is inevitable. At the same time, developed countries have issued large quantities of goodsCurrency to save the economy, will inevitably bring inflationary expectations. The depreciation of the dollar and inflationary expectations underpin commodity prices such as crude oil and gold. International crude oil prices from May 22 to 61.67 U.S. dollars/barrel rose 7 consecutive days to June 2 of 68.55 U.S. dollars/Barrels, June 3 appeared down, but still stood at 66 USD/barrel above.　　Comex gold prices also rose from May 19 to $926.70/ounce from June 2 to $983.2/oz, down from June 3 to $964.5. Pay attention to the inflation expectation beneficiary plate in the inflation environment, the top of the industrial chain of oil, coal, non-ferrous metals, gold and other resource sectors will be the industry's most beneficial groups. The recent trend of these plates is also significantly stronger than the market, becoming the main leading force.　　According to wind information statistics, from May 18 to June 4, according to the total market capitalisation weighted average method, the non-ferrous metal index rose 16.98%, in the Shenwan level of the industry index in the lead, followed by the mining index, the interval rose to 7.86%. However, after the early strong rise, the resources sector has accumulated a large increase.　　In such cases, the real estate, banking and insurance sectors, which also benefit from inflationary expectations, are beginning to receive financial attention. Analysts point out that real estate has investment-type asset attributes, rising inflationary expectations and a financial environment created by low credit rates, which will unleash more investment demand. The release of investment demand will hedge against the decline in rigid demand, real estate stocks, especially the large number of real estate reserves are expected to usher in a good opportunity.　　In fact, the May key city turnover in addition to a small drop in Beijing, the rest continue to rebound. In addition, as an early-cycle industry, finance will benefit directly from future economic recovery expectations. For banks, in the context of inflation, the flood of liquidity is bound to push up credit capital, and bank interest income will increase. At the same time, life insurance companies will benefit from inflationary expectations. CICC analysts point out that the cost of life insurance policy has fallen sharply in the final stages of the interest rate cut, while the real economy has rebounded and inflation expectations have begun to be reflected in bond prices, and bond yields are likely to have bottomed out and some rebound. At the same time, the outlook of the stock market makes it likely to rebound before the real economy, which makes the investment income level of life insurance company increase obviously.