How do foreigners view the latest developments? Dollar, tariffs, interest rate cuts, Fed Chairman, China.

Based on a survey of global and Asian investment managers by Bank of America Merrill Lynch in July (July 15th) Key Points: For the global market: 1. 34% of investors believe that shorting the US dollar is the most crowded trade, increasing from June, and it is the first time this situation has occurred; next is long positions in the "Tech Seven Sisters" and gold. 2. Cash levels have dropped to a historic low, reaching 3.9% in July. 3. Nearly half of the respondents expect the Fed to cut interest rates twice this year; a quarter expect Powell to become the next Fed chair. 4. The market expects the US's final tariff level on other markets to be 14%, slightly higher than June's 12%. 5. Global investors are at record levels of overweighting the Euro and European stocks. For the Chinese market: 1. The percentage of investors who believe that China's growth is under pressure remains the same as in June, but the percentage who believe that it is still in a long-term downward valuation trend has increased. 2. Compared to June, more investors are willing to look for investment opportunities in markets outside of China. 3. Within the Asia-Pacific region, investors still have the most positive outlook on Japan (dropping from 45% to 32%), followed by South Korea (rising from 5% to 16%), and India (dropping from 17% to 10%); China dropped further from -5% to -13%. 4. In the Chinese market, foreign investors are most bullish on AI, dividends (rising to second place), internet (rising to third place), and pharmaceuticals, but still not on consumption. Global Investment Manager Survey 1. Global investor sentiment has recovered to a new high since February 2025, with 59% of investors believing that the global economy will not enter a recession in the next year, the most optimistic level in five months. 2. Cash levels have dropped to a low level, reaching 3.9% in July. 3. 47% of respondents expect the Fed to cut interest rates twice this year (unchanged from last month); 26% expect Powell to become the next Fed chair, followed by Brainard (17%) and Waller (14%). 4. The market expects the US's final tariff level on other markets to be 14%, slightly higher than June's 12%. 5. 34% of respondents believe that shorting the US dollar is the most crowded trade, increasing from June, and it is the first time this situation has occurred, followed by long positions in the "Tech Seven Sisters" and gold. 6. Global investors are at record levels of overweighting the Euro and European stocks. In July, investors increased their allocation to technology, US stocks, materials, and decreased their allocation to cash, essential consumption, banks, and emerging markets. Asian Investment Manager Survey 1. The percentage of investors who believe that China's economy will weaken in the next 12 months is unchanged from June, at 10%. However, investors do not see a significant improvement in the long-term structural outlook, with 58% of investors believing that it is in a structural valuation decline, higher than June's 50%. 2. Compared to June, more investors are willing to seek investment opportunities in markets outside of China. 3. Investors are more optimistic about the Japanese economy, with more investors expecting it to improve compared to June. 4. In the Asia-Pacific region, investors still have the most positive outlook on Japan (dropping from 45% to 32%), followed by South Korea (rising from 5% to 16%), and India (dropping from 17% to 10%); but China dropped further from -5% to -13%. 5. In the Chinese market, the sectors that investors are most bullish on are still AI, dividends (rising to second place), and internet (rising to third place), with no change in the sentiment towards consumption. Source: WeChat public account "Kevin Strategy Research", GMTEight editor: Wang Qiujia.