The Central Bank of my country announced the launch of its own legal digital currency DC/EP on May 8, 2020, and it is conducting trials in many cities across the country. The European Central Bank (ECB) is expected to accelerate research on the digital euro in the next few months and launch the digital euro as soon as possible.

The EU takes the first step in the “digital euro”

The European Union has always been more cautious about digital currencies. This is due to the protection of the stability of the euro and European financial considerations. However, as some countries have successively launched the process of launching sovereign digital currencies, including some well-known companies have also launched digital currencies, the EU cannot turn a blind eye.

While cautious, the EU is also preparing for the advent of the digital currency era. In 2018, the European Union promulgated the “Fifth Edition of the Anti-Money Laundering Order”. In this decree, the EU classifies cryptocurrency business and banking, payment processing, gaming and other services into the same legal category, which in fact provides protection for cryptocurrency business.

According to the previous agreement reached by the EU finance ministers, when the risk of digital currency has not been completely eradicated, or the relevant legal and supervisory framework has not been established, the EU will eliminate the use of private digital currencies, and member states shall not include the introduction of encrypted currencies. Its laws and regulations. Although Europe is not as active as the United States and China in the era of digital economy, as a highly developed capital-intensive region, Europeans’ consumption, savings, and investment behaviors are becoming more and more digital, and the euro’s trust in the member states is also based on this. Starting point, the European Central Bank has drawn a rough blueprint for the future “digital euro”.

In October 2020, the European Central Bank officially issued a document introducing the European Union’s plan to develop digital currencies. The European Central Bank believes that no matter which technology the “digital euro” uses, it must be strictly distinguished from encrypted currencies. The EU’s vision for the “digital euro” is to be safe, efficient, convenient, and legally compliant, while at the same time building a high degree of trust among EU citizens.

The digital euro may suck up 8% of deposits in eurozone banks

According to previous news, the European Central Bank (ECB) will speed up the study of the digital euro in the next few months. Although there are still a few years before the final launch, it has not neglected the impact of the launch of the digital euro.

Whether the introduction of a digital sovereign currency will eat into the funds in the current commercial bank accounts is something that more than 90% of the world’s central banks that are studying digital currencies need to consider. For the European Union, the member states cannot be ignored.

Morgan Stanley analysts estimate that all euro zone citizens over 15 years old will transfer 3,000 euros ($3,637) to a “digital wallet” controlled by the European Central Bank. This estimate is based on a “bear market” scenario.

The digital euro may suck up 8% of customer deposits in euro zone banks, especially for small countries such as Estonia, Slovakia, Latvia, and Lithuania, which will be more than 8%. In theory, this could reduce total deposits in the Eurozone by 873 billion Euros (close to 8%).

Digital euro can provide better privacy protection

Although the European Central Bank has a lot of concerns about all kinds of digital currencies, in terms of protecting privacy, Fabio Panetta, a member of the ECB’s executive board, believes that the digital euro will play a positive role and can also protect the euro zone from the “threat” of cryptocurrencies. Officials of the European Central Bank believe that if the European Central Bank participates in digital payments, it will pay more attention to privacy protection than private companies. Compared with private companies that collect large amounts of data from users to satisfy their business interests, the European Central Bank will not store, manage, and user data. Involving commercial interests. It is reported that the European Central Bank has conducted a small offline payment experiment before. Transfers of tens of euros or even hundreds of euros can be completed through Bluetooth between devices. There will be no payment except in the wallets of the payer and the payee. data record. There is no doubt that payment privacy is one of the main concerns when people use digital currencies, and the European Central Bank is trying to show everyone that it has the ability to separate identity information from payment information. If everything goes smoothly, it is expected that the digital euro will circulate on a large scale in the euro area around 2025

The People’s Bank of China issued a press release on Monday stating that it has recently interviewed the Industrial and Commercial Bank of China, Agricultural Bank of China, Construction Bank, Postal Savings Bank of China, Industrial Bank, and Alipay (China) with limited internet technology regarding banks and payment institutions providing services for virtual currency trading Companies and other banks and payment institutions. This move is aimed at combating Bitcoin and other virtual currency trading hype and maintaining financial security and stability.

According to people familiar with the matter, Ya’an City in Sichuan Province has assured relevant provincial departments that all Bitcoin and Ether mining companies will be cleaned up within one year.

After the Fed’s policy stance turned to hawks last week, the market’s interest in risky assets has diminished. “If, as I expected, the global trend of buying everything this week cools down further, then Bitcoin will feel the cold wind,” Oanda Asia Pacific Pte. Said Jeffrey Halley, senior market analyst at.

Some commentators said that with increasingly strict regulations, China’s computing power-the computing power used for mining and processing blockchain transactions-is waning

The Shenzhen Stock Exchange requires Kelan Software to verify the reasons for the large increase in its stock price in the short term. In addition, the Shenzhen Stock Exchange requires Kelan Software to explain the digital currency business and the specific content and methods of cooperation with Huawei, as well as the revenue directly generated by related products or projects in 2020. And the amount and proportion of net profit.

On the day the attention letter was released, the concept of Huawei Hongmeng continued to rise sharply, Kelan Software soared 20%, and its share price hit a record high. The stock has reached its daily limit 5 times in the past year. As of press time, Kelan Software has risen to 49.4 yuan, nearly 8.23 ​​yuan higher than the opening price of the day, with a turnover of 901,900 lots, a turnover of 4.257 billion yuan, a turnover rate of 37.56%, a price-earnings ratio of 200.64, and a total market value of 15.363 billion yuan.

According to the official website of Kelan Software, it was officially established in December 1999 and registered in the Beijing Economic and Technological Development Zone. It is a company formed by Wall Street financial practitioners and Silicon Valley technicians returning to China, specializing in financial software product application development and consulting services. enterprise. The company has more than 5,000 employees and has branches, R&D centers or joint ventures in Beijing, Shanghai, Zhejiang, Chengdu, Shenzhen, Hong Kong and other places.

Since the second half of 1999, Kelan has implemented the first online banking system. According to the official website, its customers cover banks such as Bank of China, Agricultural Bank, Construction Bank, Postal Savings Bank, Export-Import Bank and so on. Kelan has cases in various applications such as online banking (corporate, personal), mobile (mobile phone, PAD) banking, electronic payment, third-party payment, foreign exchange precious metal trading platform, bank-enterprise communication, financial portal content management, etc.; in banks The market share of electronic channel construction exceeds 60%.

According to the official website, on June 3, Huawei held the Smart Finance Summit, and Kelan Software was invited to attend as a core partner of Huawei’s ISV. At the meeting, Kelan Software and Huawei released compatible tools and solutions for Hongmeng Mobile Finance. At present, Kelan Software has become the only supplier in the industry capable of providing full-stack credit creation solutions for Internet finance.

In terms of digital currency, on June 11, Kelan Software issued an announcement of abnormal stock trading fluctuations, stating that in recent years, Kelan Software has implemented actual digital currency projects. However, the digital currency-related business is the company’s innovative business, and the revenue from the digital currency-related business of Kelan Software accounts for a relatively small proportion of the company’s operating income.

In the 2020 annual report of Kelan Software, Kelan Software stated that its “distribution side” in the central bank’s digital currency industry chain can provide banks with a full range of Internet financial products; on the “user side” it has a “wallet” that supports digital currency and Rich cases of its application scenario construction; On the “server” based on digital authentication, Kelan Software holds a license through its holding subsidiary Continental Cloud Shield and provides mobile digital authentication services.

Kelan Software is currently actively cooperating with operating banks, clearing transfer service institutions and other entities, and is gradually implementing the development and construction of related operating systems for bank customers including digital renminbi, digital bank cards, etc., and assisting bank customers to achieve digital financial service upgrades. During the reporting period, Kelan Software and Suzhou Xiangcheng District Finance Bureau actively explored more feasible application pilot programs. The digital renminbi application scenario that Kelan Software cooperated with a major state-owned bank was launched in the second half of 2020 and will be delivered in the second quarter of this year as planned.

As for the proportion of digital currency-related business revenue in the specific revenue of Kelan Software, it is not separately listed in the annual report.

According to the first quarter report of Kelan Software, the total revenue of Kelan Software in Q1 was 210 million yuan, a year-on-year increase of 35.68%; net profit was 5.691 million yuan, a year-on-year increase of 155%; total assets were 2.294 billion yuan, a year-on-year increase of 55.72%; total liabilities It was 1.152 billion yuan, a year-on-year increase of 59.41%; investment cash flow was -178 million yuan, a year-on-year decrease of 388.33%; financing cash flow was 10.3555 million yuan, a year-on-year decrease of 66.46%

The People’s Bank of China issued a press release on Monday stating that it has recently interviewed the Industrial and Commercial Bank of China, Agricultural Bank of China, Construction Bank, Postal Savings Bank of China, Industrial Bank, and Alipay (China) with limited internet technology regarding banks and payment institutions providing services for virtual currency trading Companies and other banks and payment institutions. This move is aimed at combating Bitcoin and other virtual currency trading hype and maintaining financial security and stability.

According to people familiar with the matter, Ya’an City in Sichuan Province has assured relevant provincial departments that all Bitcoin and Ether mining companies will be cleaned up within one year.

After the Fed’s policy stance turned to hawks last week, the market’s interest in risky assets has diminished. “If, as I expected, the global trend of buying everything this week cools down further, then Bitcoin will feel the cold wind,” Oanda Asia Pacific Pte. Said Jeffrey Halley, senior market analyst at.

Some commentators said that with increasingly strict regulations, China’s computing power-the computing power used for mining and processing blockchain transactions-is waning

The A-share “NASDAQ” is coming!

The first batch of Double Entrepreneurship 50 ETF was launched, and the Wells Fargo CSI Technology Innovation and Entrepreneurship 50 ETF was approved for release. This means that investors can deploy high-quality leaders on the Sci-tech Innovation Board and ChiNext, because the Double Innovation 50 Index is from the Sci-tech Innovation Board and ChiNext Select 50 listed companies in emerging industries with larger market capitalizations as index samples, including constituent stocks of CATL, Yiwei Lithium Energy, Cambrian, and CICC.

In terms of major events, this week is about to usher in the Super Central Bank Week, including the Federal Reserve, the Bank of Japan, the Swiss National Bank, etc. will announce interest rate resolutions; of course, the market is most concerned about the monetary policy signals released by the Federal Reserve!

At 2 o’clock on June 17th, Beijing time, the Federal Reserve will announce the interest rate decision. Prudent investment friends can wait for their boots to land before making a choice.

Let’s talk about the other conditions of the disk:

The index has stepped back, and there is a tendency to go down. If the volume can barely reach one trillion yuan and the transaction volume can be maintained, the market is fine. The market sentiment after the holiday was suppressed, and the link height was compressed to 2 links. The bad news affects foreign investment.

In terms of subject matter, the liquor concept, semiconductor and component sectors were active. The optical and optoelectronics sector was the top gainer. The Hongmeng concept was weaker and led the decline. The pork and three-child concepts were weaker throughout the day, and resource stocks were making up for losses.

Disassemble the subject matter of the lower board and share the opportunity to adjust the board:

By the way here: Everyone knows the recent market quotations. Not to mention that the bull market is coming, but the bull stock market is definitely coming. Therefore, the author combines the current situation and the hotspot direction,

Through various screenings, several short-term high-quality stocks were obtained. In late June, these stocks will surely be able to bring 60%-90% upside. And the sprint phase will also be around mid to late June.can

In order to say that there are not many opportunities, you can eat meat if you grasp it! The first one can be deployed in the near future. The ticket belongs to the third-generation semiconductor + SMIC + 5G + charging pile + photoresist + automotive electronics concept;

Science and technology revitalize the country, suitable for lurking investors. It is now in the early stage of the rise. Stepping back on the 5-day line is the point of opening a position. Just wait patiently for the wind to come. The focus is lurking.

Interested fans can find “ghy9496” to prepare: Fox, that’s it, everyone should remember that it is a commonly used chat software, get it! In 2021, we will turn the world together!

1. The concept of Hongmeng, benign differences, cut highs and lows, there must be a compensatory rise in the back. But then the operation is more difficult, and the general rise time has passed. Runhe software is the leader of this wave, there must be repeated, appropriate T, low-suction arbitrage, should be able to eat meat.

   Chips, technology stocks continue to ferment and spread. Recently, it has continued to strengthen, and some funds have increased their holdings, and many stocks have been on the rise. Rockchip, the strongest trend in the sector, accelerated its listing today. If you do the same with the trend, you can buy low if you disagree, and there is no sign of ending.

   

   You can also go to the relatively low level by yourself. You can look at Sai Microelectronics, which is relatively low and low in price, and it is 20CM, which is in line with the speculation direction of the disk, and there are expectations behind it.

2. There are also organizations in Masukura that are expected to be the main source of the military industry’s abnormal changes. In the direction of 20CM, Morning Air and Xinyu Guoke both rebounded oversold. In terms of shape, Xinyu Guoke went more smoothly and the recognition of Morning Air was stronger.

   In addition, lithium batteries continue to intensify differences, Yongtai Technology has made up for the decline, Tianqi Lithium once fell to the limit, China Baoan is still rising, 20CM National Technology. Participation is very difficult, and the consideration in the car gradually retreats; those who do not get in the car evade. The liquor sector has also been repaired, so I am willing to make the wine industry on the board and pay attention to the continuity of tomorrow.

   It is a low tide market now, and there is a high probability that it will be adjusted for a few days, so it should not be radical. Control your position, shrink and grow!

   

   Hot topics in the market outlook

   ① Huawei AR/VR

   According to the news, Huawei will hold the 5G+AR Global Online+Offline Summit on June 17, uniting global operators, regulatory agencies, partners, media, analysts, etc., to promote the prosperity of the 5G+AR ecosystem.

   From the disk perspective, virtual reality concept stocks are active against the trend today. The number of daily limit stocks is more than 5, and the number of stocks rising by more than 5% is more than 10. You must know the general decline in the market today. As for who the leading stock is, the market has already selected it, and the stock has gone out of two 20cm in a row.

   

   According to IDC, a consulting agency, in 2021, global VR virtual reality products are predicted to grow by about 46.2% year-on-year, and it is predicted to maintain rapid growth in the next few years. The average annual compound growth rate from 2020 to 2024 is about 48%.

   In addition, the agency believes that the inflection point of VR/AR has emerged after 5 years of technology precipitation. 10 million is an important singularity for the product to enter a new stage, and it will attract more ecological enterprises to enter to jointly enrich the ecological improvement and enrich the content, which is the beginning of the product climbing period. In the second half of 2021, global sales may reach 10 million units, which is the beginning of this singularity.

   Today is strong: Jiachuang Video, GQY Video, Lante Optics, Crystal Optoelectronics, Runjian Co., Ltd., Fortune Technology, Rockchip, etc.

   ② Semiconductor

   From the perspective of the disk, the semiconductor sector is active against the trend. Among them, the semiconductor equipment leader North China Chuang set a record high in the disk. Of course, North China Chuang can also be regarded as the leading stock in this round of semiconductor cycle. In addition to North China Chuang, today there are still many semiconductor concept stocks that have risen by more than 5%.

   The semiconductor industry has entered a historic boom. Driven by digital economy smart applications such as automobiles, servers, Internet of Things, and 5G, the semiconductor market is expected to enter a three-year-old super boom cycle since 2019.

   my country’s integrated circuit industry is developing healthily, and its independent strength is constantly improving. From January to April 2021, my country’s integrated circuit output exceeded 110 billion pieces, a sharp increase of 51.7% year-on-year to a new high. Looking back over the past five years, although my country’s integrated circuit imports still far exceed the export value, the average export growth rate (11%) has exceeded the import (8.8%), and the independent strength has been continuously improved.

   Today is strong: Changchuan Technology, North Huachuang, Anji Technology, Guokewei, Beijing Junzheng, Rockchip, Jingce Electronics, etc.

   ③ Military industry

   In the early trading, the military industry stocks changed. Some time ago, Aviation Power announced that it would carry out cash management of 11.7 billion yuan. In the first quarter, the company only had 4.4 billion currency funds. This gave the market some room for imagination, and the order money may have arrived. In addition, this year’s major aviation OEMs have raised their deposit limits with their respective group finance companies, indicating that the overall funding of the industry is improving.

   July is almost the time to speculate on the interim report, and performance stocks will once again become the darling of the market. For companies with better performance, it is a big plus. The style of the venue will again be dominated by institutions. After all, institutions have an absolute advantage of information asymmetry. What industry has performed well, but it has not risen sharply. This is the strength of the organization and will enter the market early. The institutional model is actually very simple. In June, the institutions went in first, and then the sellers began to blow their votes, the market was concerned, and retail investors poured in. The routine is the same. Feng Shui turns around.

   From the perspective of the disk, the most powerful stocks in the recent military industry sector are the small market capitalization stocks on the Growth Enterprise Market. This can be seen from my stock pool. 40% of the stocks are in line with this point. The current market funds prefer to speculate on low-value stocks on the ChiNext. Of course, the military industry sector is no exception. For example, Dawn Aviation and Tianhe Defense have once again set new highs. Today Dawn Airlines has achieved a 20cm daily limit.

   Leading gains today: Dawn Airlines, Tianhe Defense, Zongheng Stock, Xinyu Guoke, Andaville, Jianglong Boats, Guanglian Airlines, etc.

Prices rise by five percent Highest US inflation since 2008

Status: 10.06.2021 5:44 p.m.

In the USA, consumer prices have risen as sharply as they did almost 13 years ago – which is felt above all by car buyers. The European Central Bank also expects higher inflation in the euro countries. Is it just a short-term phenomenon or is inflation now making its big comeback? In the USA there is a growing fear of ever higher prices. Some are already pulling Parallels to the 1970s when President Jimmy Carter failed to get a grip on high inflation and job misery. Although the USA is still a long way from the double-digit inflation rates of that time, the price jumps are getting bigger from month to month. After inflation had risen above four percent in April, it has now climbed to 5.0 percent in May. That is the highest rate since August 2008. Experts had only expected an increase in the cost of living of 4.7 percent. “The dreaded five has become a reality,” said market observer Thomas Altmann from investment management company QC Partners.

Federal Reserve under pressure

The strong growth impressively proves that the price surge in April was not a slip-up, said LBBW analyst Dirk Chlench. “The US Federal Reserve is coming under increasing pressure to reconsider its view that the recent price hikes are only of a temporary nature.” As in April, the prices for used cars turned out to be the biggest inflation driver. They rose again strongly – and, according to the US Department of Labor, accounted for around a third of the monthly price increase.

Core inflation at its highest level since 1992

Particularly alarming is core inflation, which excludes volatile components such as energy and food. It climbed 3.8 percent in May. The last time there was such a sharp increase was in 1992. In April, the core inflation rate was 3.0 percent. The end of the corona lockdowns and the trillion dollar cash injections by the US government have been driving inflation in the US for months. Prominent economists like Larry Summers, Olivier Blanchard and Mohamed El-Erian warn against underestimating the danger. According to Blanchard, the high government spending under US President Joe Biden could overheat the economy.

Just a passing trend?

Most economists are still looking at the trend with serenity, however. In their opinion, the development is mainly based on temporary factors. The US service sector is back in normal mode in many places. Prices for air travel and hotel accommodation are picking up again and are well above the previous year’s level, says chief economist Thomas Gitzel from VP Bank. “So there are so-called base effects at work once more.” At the same time, the shortage of semiconductors is now at least indirectly affecting consumer prices. If there are no new cars due to a lack of semiconductors, customers switched to used cars. These would have become significantly more expensive. Gitzel predicts that the price level will slowly drop from a high level in the summer months. The US Federal Reserve (Fed) claims that inflation will only pick up temporarily. Because compared to the previous year, the economic downturn in the Corona year 2020 resulted in high rates of price increase. That is why the central bank has not yet seen itself under pressure.

Little movement on Wall Street

Wall Street barely reacted to the renewed surge in inflation. The Dow Jones rose by 0.6 percent, the S&P 500 even jumped to a record high. The US dollar gained against the euro. So investors do not anticipate a tightening of monetary policy in the US for the time being. In the eurozone, too, the money locks are still strongly open. The European Central Bank (ECB) is sticking to its trillion-dollar anti-corona crisis program (PEPP) and plans to expand bond purchases in the next quarter compared to the first three months of the year. In doing so, the central bank wants to avoid tightening the financing conditions for companies, states and private households.

ECB raises inflation forecast

The rising inflation hardly worries the euro watchdogs . The higher euro will dampen inflation, said ECB President Christine Lagarde. Nonetheless, the ECB raised its inflation forecast. According to the central bank, inflation should be 1.9 percent in 2021. In March, the ECB was still assuming an increase of 1.5 percent. For 2022, the monetary authorities expect an annual price increase of 1.5 percent and for the following year unchanged at 1.4 percent. According to the ECB, inflation that is too high can lead to a price spiral. Higher prices mean consumers get less goods for their money. So they demand higher wages in order to be able to maintain their standard of living. In turn, in order to pay the higher wages, companies continue to raise the prices of their products. On the other hand, permanently low prices are seen as a risk for the economy: companies and consumers could then postpone investments – in the hope that it will soon become even cheaper. In the medium term, the ECB is aiming for an annual inflation rate of just under two percent. In Germany, the inflation rate is already above this level. In May the Consumer prices compared to the same month last year by 2.5 percent , the highest value since September 2011.

Despite rising inflation Why the ECB is not raising interest rates

Status: 10.06.2021 8:28 a.m.

Inflation is increasing in many European countries. Nevertheless, the European Central Bank wants to stick to its loose monetary policy. How long can she keep this course? By Klaus-Rainer Jackisch, MR The circular saw is still running. But the little wood that is left is not enough at the front and back. The large warehouse in the North Hessian Baunatal is usually well filled. But wood has been in short supply for weeks. “There has never been anything like it,” says Zimmermann and company owner Peter Hellmuth. The specialist fears further bottlenecks in the summer. Although demand is booming, there could even be short-time working. Because in Corona times there is more handicraft, building and tinkering, but also because the USA and China are buying empty the world market, there is currently too little wood . In April prices were almost 30 percent higher than in the same month last year, and the trend is still increasing, according to the Federal Statistical Office. Also at other raw materials are skyrocketing : Iron, steel and aluminum scrap rose by more than 60 percent, pig iron costs almost a quarter more, and the prices of electronic circuits rose by around 14 percent.

Above all, energy is more expensive

But energy prices climbed the hardest. Imported electricity, which is becoming more and more important because the amount of energy generated from sun, wind and water fluctuates sharply, even rose by 200 percent. People also had to dig deeper into their wallets for electronics and food. Inflation is back. It is coming with great strides. It is currently 2.5 percent in Germany . For the autumn, the Bundesbank and many economists expect inflation rates in this country of over four percent. Such values ​​have not existed for almost three decades. The last time the prices climbed above the four percent mark in 1993. At that time, inflation was 4.5 percent, according to statisticians. The price surge is particularly noticeable in Germany: the return of VAT to the old values ​​and the massive CO2 pricing since the beginning of the year are making themselves felt. The upturn in the economy does the rest: Through successes in vaccinations and easing, the demand for goods and services of all kinds is increasing, while at the same time supply is scarce – all of this is causing prices to go up.

Hardly any compensation through higher wages

Also in Europe: There the inflation rate rose to 2.0 percent in May. In addition to Germany, people in Austria (3.0 percent), Estonia (3.1 percent) and Luxembourg (4.0 percent) in particular have to pay more. All of that hurts, because because of Corona there are rather poor results in the wage rounds and therefore hardly any compensation. This makes price increases even more noticeable. But none of this makes much impression on the European Central Bank (ECB). It is expected that the company’s own forecasts, which will be updated this week, are well above the old estimates. It is also becoming apparent that inflation will by no means abate in the second half of the year as originally expected, but rather, on the contrary, reach new highs. But the monetary authorities in Frankfurt’s Eurotower see no reason to act. For weeks now, the members of the ECB’s Executive Board have repeatedly emphasized that the economy is recovering well, but currently still needs the support of an ultra-loose monetary policy. A repayment of the controversial bond purchases or even a turnaround in interest rates is not even hinted at.

Worried look at the financial markets

Instead, the ECB continues to pump billions from its Corona aid program PEPP into the markets at great speed – currently it is around 80 billion euros per month. This is intended to offer sufficient capital on favorable terms and to keep interest rates low. “The ECB has committed itself to ensuring favorable financing conditions during this phase,” said ECB President Christine Lagarde in Paris last week. This promise will also be kept. In fact, the ECB is not that unhappy about the price surge. The self-imposed inflation target of almost two percent has not been achieved for about ten years because one crisis chases the next. If this is different this year, it could be sold as a great success in your own monetary policy – even if the pendulum swings beyond your own target. In addition, one looks at the financial markets with concern: there share prices, also and precisely because of the ultra-loose monetary policy, have reached a level that has long been decoupled from the real economy in many areas. The central bankers fear that a change in monetary policy could lead to violent reactions and shake the fragile house of cards.

Debt rose sharply

And then there are also the debts: In southern Europe in particular, they have risen again to astronomical heights due to the collapse of tourism in the wake of the coronavirus crisis: Greece, for example, currently has a gross domestic product debt of around 205 percent. This is the highest level in the euro zone and more than during the Greek crisis. Italy, too, is groaning under excessive debts and ailing banks. An increase in the interest rate would not be right. Italy’s central bank chief Ignazio Visco is therefore particularly busy when it comes to sticking to the current monetary policy: “Large and sustained increases in interest rates are not justified by the current economic outlook and will be countered,” he said at the annual meeting of the Banca d´Italia in Rome. In fact, a new debt crisis in the euro zone, triggered by rising interest rates, would be the last thing the monetary union could use now. The central bank governors from Germany and the Netherlands, for example, cannot do much against all of these arguments. They have been calling for an exit from the ultra-loose monetary policy for a long time, but they are in the minority.

Criticism of the policy of the US Federal Reserve

So there are many reasons why the majority of monetary watchdogs prefer to keep their feet still and save themselves over the summer. A change in monetary policy at the council meeting this week is not expected, not even with a hint that it might be imminent. Only the pace of bond purchases could perhaps be slowed down a bit. But that too is unsafe. How long the ECB can continue on its course, however, also depends on the world around it. In the USA, for example, where the inflation rate is now 4.5 percent and the economy because of the two trillion corona aid program of the Biden government is slowly starting to overheat , criticism of the Federal Reserve’s loose monetary policy is growing louder. Economists such as the former IMF chief economist Olivier Blanchard or the leading economic advisor of Allianz, Mohamed Aly El-Erian, fear that the corona crisis could have changed the structure of the economy. It is therefore not at all clear that inflation will recede again quickly. If the central banks act too late and then abruptly, this could lead to upheavals in the financial markets and a recession. The next few months are therefore likely to be uncomfortable for the European monetary authorities. And also for the people in the euro zone. Because one thing is clear: it will be even more expensive.

Poland’s high inflation With price jumps from the pandemic

Status: 08.06.2021 8:12 a.m.

The Polish inflation rate is well above the German rate – now more than five percent. In many ways, this is a consequence of the pandemic, experts say. But when will the central bank react? From Martin Adam, ARD studio Warsaw The pandemic is not over yet when another topic is pushing the front pages of Polish newspapers. “Why so expensive?” Asks the “Gazeta Wyborcza”. The “Rzeczpospolita” replies: “We pay for growth with inflation.” In fact, what is happening in Poland is what financial experts in Germany are warning of: the inflation rate is rising – currently to a ten-year high of well over five percent, according to the standardized European calculation. That is one of the highest values ​​in the European Union. For comparison: In Germany, the inflation rate was 2.5 percent in May .

Devaluation clearly noticeable

The devaluation of the Polish zloty is clearly noticeable, explains financial market expert Pawel Majtkowski. “Compared to last year, wages have risen by ten percent, but the prices of fruit and vegetables by 20 percent. So we are already feeling the price increases,” he says. “In addition, there are higher production costs, transport costs and the costs of higher wages.” All of this is reflected in prices. Inflation is most evident in the case of fuels. According to the national statistics office, gasoline and diesel for private cars have become more than 30 percent more expensive within a month.

“Polish economy is doing well”

But don’t panic, it’s all normal and a consequence of the corona pandemic, explains economic advisor Lidia Adamska. “Inflation in Poland reflects processes that we see in the post-Covid landscape around the world. But the Polish economy is doing well,” she says. “The gross domestic product is growing, the employment and unemployment figures are also optimistic.” There are various factors that are currently weighing on the Polish currency, only some actually have to do with the corona pandemic: The low interest rates, which are supposed to stabilize the economy, make money cheap. It is available in large quantities, which always carries the risk of being devalued. After the rapid slump last year, crude oil prices are also picking up again, making gasoline and diesel more expensive. In addition, there are higher food prices because Polish agriculture has not recovered from the past two years of drought. A bad harvest means high prices. With restaurants and hotels that are slowly reopening in Poland, demand is also increasing.

Raising the minimum wage is having an effect

The political decision at the beginning of the year to increase the gross minimum wage to 18.30 zloty per hour, the equivalent of around 4.10 euros, also has an impact. This is supposed to distribute the Polish economic boom more fairly. However, the service industry in particular, which has been shaken by the corona lockdown, is passing the higher wage costs through to customers. The bottom line is that everything will be expensive. But it will certainly be countered soon, suspects the economics expert Ignacy Morawski. “In a sense, inflation is the price of low unemployment,” he says. “I suspect the central bank will soon raise interest rates to control inflation.” When exactly this will happen and how far inflation will rise, hardly anyone in Poland has yet wanted to make a forecast.

“Red envelopes”, referring to the traditional cash prize distribution, will be distributed to 200,000 winners and they will have to download an app to use the prize for purchases at designated locations. in the city. Those who want to buy lottery tickets can register from 6/6. The winner will be announced a few days later and will have to spend the prize money by June 20. China is a promising player in the global race for central bank digital currencies (CBDCs) and has conducted trials in several major cities such as Shenzhen and Shanghai. The trial in Shenzhen in January awarded a reward of 20 million yuan. The People’s Bank of China (PboC) aims to be the first major central bank to issue an eCNY, part of an effort to internationalize the yuan and reduce its dependence on the global banking system without USD prevails. eCNY may also weaken Ant Group’s Alipay and Tencent’s WeChat Pay in payment systems.

China has big ambitions for the digital yuan – Photo: CGTN As China moves towards issuing the world’s first government digital currency, the debate about it is getting hotter than ever. Historian Niall Ferguson describes China’s e-yuan as a “dangerous challenge” to the US financial hegemony over decades. Meanwhile, Michael Hasenstab, chairman of investment firm Franklin Templeton, said e-CNY could undermine the role of the dollar as the reserve currency of the world. However, according to Bloomberg, when talking to people already using the digital yuan in China, the response was not very positive. APPEARANCE OF DOMESTIC USERS In Shenzhen – the tech hub is experimenting with using the digital yuan – most Bloomberg survey participants showed little interest in switching from popular mobile payment systems. currently such as Alipay of Ant Group or WeChat Pay of Tencent. Ant Group and Tencent are dominating the digital payment market in China with WeChat Pay and Alipay apps – Source: iResearch / Bloomberg Some are concerned that the digital yuan could be a tool for the authorities to access their financial data in real time. “I am not interested at all,” said Patricia Chen, 36, who works in the telecommunications industry, Chen is one of more than 500,000 people in Shenzhen eligible to test the yuan. While none of the Bloomberg survey participants had in-depth knowledge of the role of the digital yuan in the global foreign exchange market, their indifferent response showed the challenges faced by the administration. Chinese President Xi Jinping faces when he applies this currency at home and abroad. “I’m not interested at all” … “I’m afraid the authorities can track all my transactions” … E-CNY users According to Bloomberg, even if the Chinese authorities persuade or force citizens to accept the digital yuan, it will take a long time to do the same with international consumers and businesses. they have been wary of Beijing’s capital controls so far. With Vera Lin, 25, working for a finance company in Shenzhen, using the digital currency is not too difficult. However, Lin argues that users like her need a greater incentive to switch to the digital yuan altogether, because existing digital payment options are so reliable and work seamlessly within the platforms. other services, from social networks to e-commerce. Even a 10% discount on RMB purchases was not enough to lure Lin. The 25-year-old says platforms run by companies like Ant regularly offer discounts on everything from ride hailing to food delivery. Meanwhile, Jan Chen, a 33-year-old civil servant, is concerned about privacy issues. “I’m afraid the authorities can track all my transactions,” Chen said. China is testing the digital yuan in several provinces, including the largest scale in Shenzhen city, Guangdong province – Photo: Xinhua In a country where tax compliance is not as strict as China, many entrepreneurs are wary if information about their transactions is fed directly into government databases. Some fear that data from digital yuan transactions could be collected in real-time to monitor political disagreements or international businesses. competition with Chinese state-owned enterprises. Launched in 2014, the digital yuan project was promoted by then PBOC Governor Zhou Xiaochuan, who has long advocated the creation of a new international data currency to replace the dollar. . Zhou sees the e-CNY as a tool to counter potential threats from cryptocurrencies like Bitcoin or Facebook’s Diem (formerly known as Libra). THE COUNTRY IS HARD, IT’S ALTERNATIVE The PBOC has tried to quell these concerns by freeing the use of the digital yuan to retailers (they currently have to pay a 0.6% fee for transactions on Alipay and WePay), and pledged to that most of their transactions will be anonymous. In March, Mu Changchun, director of the PBOC’s Digital Money Research Institute, said the central bank would not directly grasp the user’s identity, but that they could get this information from financial institutions. in the event of a crime. Zennon Kapron, CEO of consulting firm Kapronasia, said that if the digital yuan is not gaining traction in the long term, the Chinese government may turn to coercive use. Beijing has begun to take moves to gain control over the data collected by technology and financial companies like Ant and Tencent. According to Francis Chan, a senior analyst with Bloomberg Intelligence, even if Chinese lawmakers do not go that far, they can ask for more co-workers from the vendors and operators of the Internet platform. digital yuan on your own payment options. “The e-CNY only partially solves the problem, which is the payment infrastructure part. However, just solving this problem does not help solve the whole problem “… Michael Ho, Director of Financial Services, Oliver Wyman Recently, the platforms MYbank (invested by Ant) and WeBank (invested by Tencent) have been added as options on the e-CNY application, although not yet available. Chan as well as Bloomberg Intelligence analyst Sharnie Wong forecasts that the digital yuan could be put into use across China before the 2022 Beijing Olympics and take 10% of the market share in electronic payments in the country by year. 2025. This is not a small number but still cannot compete with the dominant positions of Alipay and WePay – two e-wallets with total market share of over 90%. In the country it is difficult, to persuade international users to use the digital yuan is much more difficult. “The e-CNY only partially solves the problem, which is the payment infrastructure part. However, simply solving this problem does not help solve the whole problem, “said Michael Ho, director of financial services at Oliver Wyman, commented. Many people are skeptical of the ability to fulfill China’s ambitions to internationalize the yuan – Photo: Getty Images According to Zennon Kapron, on the international arena, despite its great ambitions, the digital version of the yuan is unlikely to boost the share of the Chinese currency’s global payments by one percentage point, from below. 3% current. Many analysts are also skeptical of the yuan’s international application ambitions in Xi Jinping’s plan to reduce dependence on the US-led financial system.

From Angela Göpfert, tagesschau.de The next lira crisis is here. On Thursday, the Turkish currency fell to $ 0.1204 – a drop of 1.4 percent. The day before, the lira had lost 1.0 percent against the dollar. The losses against the euro are similarly high. These are truly extreme movements for the foreign exchange market, where fluctuations usually take place in the per mille range. The sharp fall in the lira follows an economic policy on the part of the Turkish president that is perceived as extreme on the financial markets. Once again, Recep Tayyip Erdogan unsettled the financial markets with drastic statements: Turkey is in a fight against a “triad of evil” consisting of inflation, interest rates and exchange rates, according to the head of state.

The Turkish lira is clearly on a downward trend against the US dollar.

Not the first Fed chairman to be laid off

It was only in March that Erdogan had the governor of the CBT central bank, Naci Agbal, dismissed by presidential decree after he raised the key rate from 17 to 19 percent. Less than three months earlier, Erdogan had promised to accept the “bitter pill” of high interest rates to curb the rapidly galloping consumer prices. Erdogan seems to have changed his mind. Because Agbal’s successor is Sahap Kavcioglu, a former AKP MP and proponent of low interest rates.

Monetary policy credibility ruined

Due to several changes in personnel at the top of the central bank, the lira had already lost considerable ground in recent months. However, experts doubt that a weakening of the central bank’s credibility is the right answer – and they also choose drastic words. Erdogan is risking “seeing another lira crisis,” warns Tatha Ghose, Commerzbank’s London-based foreign exchange market expert. With his “de facto ban on sustained high interest rates” he ruined the credibility of monetary policy.

Capital controls as a last resort?

Against this background, Turkey does not really have anything to counter the rapidly rising inflation. In March, the Turkish inflation rate was 16.2 percent. Erdogan then announced the goal of an inflation rate in the single-digit percentage range.

Consumer prices are a long way from Erdogan’s target of a single-digit inflation rate. Some experts are now counting on the introduction of capital controls as a last resort to stop the unchecked outflow of capital from Turkey. Comprehensive controls are unlikely to be expected, however, as Turkey is simply too dependent on foreign capital for that. In addition, a ban on the free movement of capital would completely ruin the confidence of the financial markets in Turkey. Support purchases of the lira on the foreign exchange markets are also likely to miss their target in view of Turkey’s extremely thin cushion of foreign exchange reserves.

Experts warn of a downward spiral

The weak Turkish lira poses immense dangers for the Turkish economy: “Devaluations of the lira are always important because the currency-related spill-over effect contributes significantly to the high Turkish inflation,” emphasizes foreign exchange expert Ghose. “Any movement, however inconspicuous, can trigger a new market spiral and complicate the situation.” As early as 2018, Nobel laureate in economics Paul Krugman warned of a “death spiral” for the Turkish economy. At the time, he also explicitly named domestic events as possible triggers, such as repeated attacks on the independence of the domestic central bank.

Paul Krugman warns of the risks of a decline in the lira. Image: dpa

First the financial markets, then the real economy

The direct consequence would be: The domestic currency rushes into the depths. This increases inflation, as many goods for expensive money have to be imported from abroad, which in turn increases the cost of business and the cost of living for many Turks. The decline in the lira is also making it more difficult to repay debts in foreign currencies. Many Turkish corporate bonds and loans are denominated in foreign currencies such as dollars or euros. There is the next downward step: Turkish companies go bankrupt. Then unemployment rises, domestic consumption falls – the crisis has a full impact on the real economy. The logical consequence: investor confidence continues to decline. This in turn puts the Turkish currency under greater pressure – and the downward spiral begins again.

Lira expiry without end?

Krugman’s warning is as relevant today as it was in 2018: then, as now, it was the “unconventional” monetary policy worldview of the Turkish president that created the expectation among market participants that sustained high interest rates would not be enforceable in Turkey. It is these expectations that weigh heavily on the lira. An end to the lira downward spiral – apart from short-term recovery phases – does not seem in sight for the time being. Experts such as foreign exchange market analyst Ghose expect the Turkish currency to decline further. According to his forecast, investors will have to spend ten lira for one US dollar in December 2021. However, this is more of a “symbolic” forecast as Turkey is currently venturing into uncharted monetary policy territory. This makes a rational exchange rate forecast virtually impossible.

IMF regime as a way out?

The fact is: the lira is currently trading at $ 8.26. The further “symbolic” downside potential for the lira by the end of the year is therefore a proud 20 percent. According to experts, the only possible way out to prevent such a scenario would be a rescue package from the International Monetary Fund (IMF). This could help restore the credibility of important institutions such as the Turkish central bank in the market. Erdogan has so far rejected such an IMF program because it would undermine his personal power.

Karin Senz, ARD studio Istanbul There’s a lot going on in the large square in front of Istanbul’s Bazaar district, but not nearly as much as before the pandemic: a few Arab tourists and locals stock up on their fasts or just sit in the sun. Ali stands at his little oil press and waits in vain for customers. He usually works seven days a week and gets around 3,000 lira, that’s a little more than 300 euros. With that he can just make ends meet. But now it’s lockdown on the weekend. “That’s why I only work five days a week and get 100 lira a day, which makes about 2000 lira a month,” says Ali. “That’s not enough to support my family. But what should I do? We have all got used to these circumstances.”

No protection from state social security

He does not get compensation from the state, which ordered the lockdown. “In Turkey it is very common that you do not work in small companies, for example in restaurants, small hotels or workshops,” says Istanbul economist Baris Soydan. An estimated 30 percent of workers are not registered – and thus without social and unemployment insurance, like Ali. The Turkish media reported that around 2.5 million permanent workers were sent on unpaid leave by their bosses. The state pays them around 1000 lira a month, a good 100 euros. Mücke is sitting a few doors down behind the counter in her little shop. It’s full of Turkish sweets – but not a single customer can be seen. “Before the pandemic, we had two shops, one more straight down the street,” she says. “We had to close it, the shutters are down. At the moment we’re trying to stay afloat with this shop.”

Terminations despite the ban

The 40-year-old could have applied for a rent subsidy, around 100 euros. But that wouldn’t matter with the high rent she has to pay here in the tourist district, she says. That is why she did not even apply for the grant: “We get state support for the insurance contributions of the employees. And there are reductions and deferrals for income tax. But that’s it.” Mücke has five employees. She has not cut their salaries, she says – although the working hours are significantly shorter from the early evening due to the weekend lockdown and curfews. “We were able to claim short-time work allowance for two months. It was said that it would be extended to June. But then they ended it. That is over.” Actually, the state has banned firing workers during the pandemic. According to the Turkish statistical office, around 250,000 people lost their jobs in February alone.

No rate cut

Turkey only went into a complete lockdown a year ago, which then lasted almost three months. Since then, the shops have remained largely open. Restaurants, cafes and bars are closed from time to time, as they are now during Ramadan. “Last year, in 2020, the economy in Turkey grew by 1.8 percent. In Germany, for example, it shrank,” says economic expert Soydan. “From a purely macroeconomic perspective, things went okay here, but not for the population.” Inflation is currently over 16 percent. That is also why many Turks looked to the decision of the new head of the central bank, Sahap Kavcioglou, on Thursday. The central bank did not comply with President Erdogan’s request to lower the key interest rate. Expert Soydan warns of another sticking point: the upcoming holiday season. “It could be that this year there are not many tourists from Germany or Russia,” he says. “If that were the case, significantly fewer foreign currencies – that is, euros and dollars – would enter Turkey.” And this is what the country needs – especially now in the pandemic. And the waiters, maids, bartenders, and entertainment staff need the jobs. At the moment, however, Turkey is struggling with record levels of around 60,000 new infections per day. Many people find it difficult to think of a successful holiday season.

Many macro factors will support the market’s growth trend in the whole year 2021. Photo: Duy Dung. The probability of VN-Index falling is not high According to BVSC’s report, compared with the movements of the VN-Index in the past, the current P / E of the VN-Index is already higher than the 5-year average. However, according to BVSC’s observation, at the current P / E, the probability of a market decline is not high. In addition, with the recovery of the economy, according to BVSC’s forecasts, profits of listed businesses will grow by 27.3% by 2021 (compared to 2020). With the profit growth of listed companies, the P / E of the VN-Index is likely to drop to 15 times – lower than the 5-year moving average (16.41 times) of the VN- Index; therefore, the 2021 P / E level of the market is still attractive. BVSC’s experts believe that the Vietnamese market is attractive compared to other markets in the region, but it is very important to the ability to attract foreign capital, connect with the flow of investment capital in the world. equals the valuation of Vietnamese stocks in terms of general ground. Up to now, the market liquidity and the ETFs participating in the market have also contributed to help the Vietnamese market’s valuation ground closer to other markets in the world. As of April 9, 2021, compared to the sample of 12 markets observed by BVSC, including countries in frontier, emerging and developed markets, the P / E of the VN-Index is currently at 19.11 times. – 4th low out of 13 markets followed and just above P / E of Shanghai Index (17.61 times) of China, Hang Seng (14.86 times) of Hong Kong and KOSPI (12.99 times) of Korea. These are also 3 markets with a sharp decrease of more than 10%, in February and March. Meanwhile, “the rate of return on equity of the companies listed on the HSX stock exchange is at the highest level among the markets we monitor. This shows that, in general, with high return on equity, stocks in the VN-Index basket are being traded at very attractive price ranges when compared with other markets. other securities in the region and internationally ”- said BVSC’s expert. The market still maintained an uptrend throughout the year According to experts from BVSC, despite facing an interest rate hike in 2022, the stock market can normally recover and then rebound after early monetary tightening. first. The reason for this is that central banks in many countries often practice monetary tightening since the economy is still in the growth phase, when businesses still have positive business results and do. reduce the impact of increasing operating rates. Therefore, BVSC believes that the world stock market is not too concerned when central banks of countries implement interest rate hikes or monetary tightening for the first time. In the past, markets often reversed and fell into a downward phase at the third rate hike by central banks. For Vietnam, according to BVSC’s experts, with the context that GDP growth is accelerating again and can grow impressively in the second quarter; Other macro indicators are operating stably, supporting business activities; listed companies will have good growth in 2021, especially many industries with high growth in the first quarter such as banking, steel …; and beyond, foreign capital will continue to flow into Vietnam market thanks to its ability to be upgraded and the attractiveness of a dynamic and rapidly growing economy. “These are factors supporting the market’s growth trend in 2021” – stressed BVSC expert. However, BVSC also notes some potential short-term risks. Accordingly, when the positive information has been reflected in the price, the new cash flows into the market cannot keep up with the price increase, the cash flow is withdrawn from major shareholders – or companies that sell stocks. Fund … Besides, when the opportunities to gain from pure stocks derive from cash flow factors, lack of support in the core positive change of the business, will create potential risks. on the ability of the market to correct in the short term./.