This so-called "own goal" incident ultimately aroused concerns in the market, because people believe that there is no smoke without fire, especially when combined with the news that the U.S. dollar is going to raise interest rates, it seems to be mixed into a strong medicine.
The RMB still fell today and began to enter a downward trend.
Lu Ming was very good at bargain hunting. He didn't know and didn't care who was short selling in the offshore market. Anyway, it was just one action: mindlessly scanning goods and mindlessly going long!
What is certain is that the international hot money short sellers are the main force, and it cannot be ruled out that some domestic capital that has escaped in an attempt to get a share of the RMB depreciation will also follow suit.
But they definitely didn't realize the seriousness of the problem, and the fate they were waiting for was to be harvested by Lu Ming.
…
December 12th.
A blockbuster news caused an uproar in the global capital market. The Federal Reserve is expected to raise interest rates again in 2017.
The emergence of this news made the expectations of U.S. dollar interest rate hikes, which were originally thought to have been digested by major capital markets around the world, strengthened unprecedentedly that day, and the market suffered another heavy setback.
In response, the domestic stock market plunged, plummeting -2.47% today. There were already rumors that the management was going to unleverage, which was already a major negative for the market, and another big negative for the external market.
Big A just lay down and didn’t want to beep for you.
This news means that the U.S. dollar index continues to rise. On the contrary, the RMB continues to fall, and once again broke through 6.9, approaching the key integer mark of 7.
Today, Lu Ming took action again and directly issued an order to Qiwei to spend US$8 billion in liquidity to go long RMB in the offshore market.
It still has US$40.5 billion in liquidity on hand.
A fierce offensive and defensive battle broke out between the long and short sides at the water level around 6.95.
…
December 28th.
New Year's Day is approaching, and there are still three days of vacation.
Throughout December, the general public in China was eating melon, following dramas, and watching gossip news in the entertainment industry. Stock investors continued to criticize Big A on a daily basis because Big A returned to 3,000 points from 3,300 points.
But what most people don’t know is that just at the end of this month, the RMB offshore market was engaged in a protracted long-short battle, the core of which was a fierce attack and defense around the exchange rate breaking 7.
Although both sides of the battle could not see their opponents, their moves were unambiguous. Both sides invested huge amounts of real money, in units of hundreds of millions of dollars.
As of yesterday, Lu Ming had taken over more than 300 billion yuan of short-selling funds in the offshore market, and the competition between the two parties seemed to be reaching a fever pitch.
Yesterday's offshore RMB exchange rate fell to a new low, falling as low as 6.9632, and breaking 7 is almost around the corner.
The general public and ordinary retail investors cannot feel this fierce currency war, and all domestic and foreign funds are paying close attention, especially hot money and speculative capital, but they have long realized that the foreign exchange market is in a turbulent moment.
Some are worried about this, and some are maliciously gloating about it.
This invisible currency war has started with the first shots fired by both sides. It has been fiercely fought for nearly two months. Onlookers from all walks of life can't help but hold their breath.
Yang Ma has urgently mobilized the "preparatory troops" offshore and is prepared for the worst, that is, when all the offshore liquidity on Lu Ming's side is exhausted, he can be able to top it up. This time Yang Ma directly used 300
The foreign exchange reserves of 100 million US dollars are always ready.
Lu Ming still has 37.95 billion US dollars of liquidity in his hands, having already spent 43.05 billion US dollars on it.
The scale of international hot money and speculative capital is equally huge. They are not short of US dollars, even several times Lu Ming's disposable liquidity. What they are short of is RMB. If there are not enough RMB in the offshore market, short selling will be limited.
There is no way to talk about it.
On this point, the central government has already figured out the key points from the last battle. Therefore, at the same time, the relevant domestic departments further strictly control the major channels for capital outflows and lock in all aspects of liquidity. The key to this battle is not to have
How many bullets, but depends on the liquidity.
…
At around 13:55 this afternoon, the US media Bloomberg published a news report saying that data showed that the RMB exchange rate against the US dollar broke through the integer mark of 7, reaching the lowest level of 7.0121.
The news was like a bolt of lightning piercing the winter sky.
Big A dived in response, and the offshore exchange rate of the RMB also rapidly depreciated further from 6.9632. It once fell to the level of 6.9796 during the session, and was in danger of breaking 7. While it continued to fall, Tiansheng Capital's offshore funds entered the market in large quantities and consumed the flow crazily.
After investing US$8.7 billion in liquidity, US$29.25 billion of liquidity was left.
The offshore exchange rate has not reached a new low since it dropped to 6.9796. If it hadn't started to rise, Bureau Wang would have called Lu Ming's office.
At the same time, as the offshore exchange rate did not continue to hit new lows during the session, Big A also stopped falling and rebounded. It is obvious that some domestic profit-seeking funds are really ready to push the button at any time and prepare to run away.
On that day, the offshore exchange rate returned to the water level of 6.9709, once again holding the integer mark of 7, and it has not broken 7 so far!
Today, news from Bloomberg caused panic again, but the news soon turned out to be another own incident.
Two own incidents occurred one after another within a month, which forced various funds to have more ideas, but at the same time, various international short-selling funds also had a difficult time.
They have been dragged on this battlefield for too long.
…
Located in a star hotel in Singapore.
Several middle-aged men with Western white faces gathered in a room, and it turned out that they were one of the short-sellers who directly participated in the short-selling of the RMB. At this moment, their expressions were quite solemn.
"Damn it! There is no way to go on like this. It has been more than 55 trading days, and it has not yet broken through the integer digit of 7."
"Adversaries have used strong intervention in the financial capital market to curb capital outflows, leading to signs of RMB shortage in the market. Singapore's 150 billion yuan in deposits have been borrowed, and we cannot borrow more RMB. The situation seems to be happening again.
The last short squeeze, God, it was a horror story!”
"The rising momentum of the U.S. dollar index is also showing signs of slowing down. Everyone, the situation is not good!"
"I have a vague feeling that I will make the same mistake again this time... Damn it!"
At this time, all kinds of international hot money are actually miserable. If it were not for the remote support of the Federal Reserve, this group of profit-seeking and selfish capital would have fled long ago.
It’s very difficult now, it’s really been delayed for too long.
The long-awaited breakthrough of 7 integer figures has not yet been achieved, and even the hot money speculative capital that originally wanted to flow out of the country to join them has been strangled.
The sharp drop in capital outflows, coupled with the fact that Lu Ming, who was mistakenly thought to be a "regular army of the Central Government", took over the offshore market, the renminbi has always been firmly nailed to a water level below 7.
But I'm really not willing to just retreat like this. I'm just one step away from breaking 7, just one step away!
Therefore, with the long-range support of the Federal Reserve, the short army decided to give it a final try!
