Deutsche Bank: China's central bank after the devaluation of the RMB is facing four major challenges

Night network, network nightlife Wall Street FRANCISCO 12 pm news, Deutsche Bank (Deutsche Bank) pointed out on Tuesday a one-time devaluation of RMB to China's central bank [microblogging] bring four major challenges; the same time, China as a major consumer of commodities If the formation of the renminbi devaluation trend, the commodity will cause big bad 4。  Deutsche Bank economists pointed out that China's central bank to devalue action may bring four major challenges: 1) to encourage rather than reduce market speculation against the dollar; 2) to promote the yuan further unwinding carry trades; 3) to a wide range of trading partners depreciation pressure, thus promoting the further depreciation of the RMB; 4) will inhibit capital flows, foreign exchange reserves, consumption, resulting in tightening of domestic monetary and financial environment。  Deutsche Bank also said the devaluation constitute bearish for commodities。  Deutsche Bank wrote in the report, although the yuan depreciation of 2% on its own rather limited, but if this trend continues, it will constitute four major commodities bad: First, China's share of global demand for metals 45- 50%, so the devaluation will lead to rising commodity import prices。Its initial impact is arbitrage between domestic and imported commodities narrowed, thereby inhibiting imports of commodities such as coking coal and zinc。  Secondly, most of the commodities are in excess of the balance of supply and demand or supply status, the price is determined by the marginal cost of production, so the producers exchange rate depreciation will result in cost reduction, thus causing commodity prices, Deutsche Bank report said the case。  Third, China is exporting its excess capacity, especially aluminum, steel, stainless steel and other metal, devaluation will increase China's export competitiveness。  Finally, Deutsche Bank noted that tightening of monetary and financial environment could affect China's demand recovery。(Shofu compilation)