China International Capital Co says markets have entered a corrective phase
since June: the dollar index broke above its one-year upper range while
AI-driven global equity benchmarks and liquidity-sensitive indices have pulled
back; US equities show a defensive-style bias. The report attributes the moves
mainly to rising rate-hike expectations and marginal tightening in dollar
liquidity. It reiterates the view that the Fed will be nominally hawkish but
effectively dovish this year; policy implementation this year is more likely to
focus on easing bank regulation to support the investment cycle and buy time for
AI-driven productivity gains. After this round of adjustment markets may rotate
into lagged-curve trades; the dollar index could revert to a weaker trading
range. Real assets, industrials and technology retain expansion potential, and
investors should watch banking deregulation for its potential to lift
traditional cyclicals.
