Chinese Yuan to Strengthen, Says Julius Baer’s Matthews

The video discusses the inclusion of CNY in portfolios and the rising yields in emerging market (EM) local currency debt. It highlights the Chinese renminbi bond market as a rare opportunity with a good risk-adjusted yield. The discussion covers China's economic recovery, the rally in the Chinese yuan, and the shift in China's policy from the Belt Road initiative to focusing on the domestic economy. The video also examines the impact of a stronger dollar on the renminbi and the potential for further yuan appreciation.

What is a key reason for being selective in emerging market debt investments?

• High inflation rates

• Currency devaluation

• Quality of balance sheets

• Political instability

Why is the Chinese renminbi bond market considered favorable?

• It offers a good risk-adjusted yield

• It has a low yield compared to other markets

• It is highly volatile

• It is supported by the US government

What recent policy shift has China made regarding its economic focus?

• Strengthening military presence

• Focusing on domestic economy

• Increasing exports

• Reducing foreign investments

How has the Chinese yuan performed against the US dollar recently?

• It has strengthened

• It has been volatile

• It has remained stable

• It has weakened significantly

What global event could potentially impact the strength of the US dollar?

• Decrease in interest rates

• Return to lockdowns

• Increase in oil prices

• Rise in gold prices