CICC: Risk assets still have long-term potential, and the downward cycle of the US dollar is expected to continue.

CICC pointed out that under the impact of policies in the first half of the year, the US economy hit bottom in June and showed signs of improvement in July. The wave of debt issuances also began in July, gradually absorbing US dollar liquidity. Looking ahead, the impact of tariffs on inflation may gradually become apparent, coupled with the tightening of US dollar liquidity, which may not be favorable for the performance of US stocks in August and September. The 10-year US Treasury yield may also quickly hit bottom and gradually rise to around 4.8%. However, from an annual or longer-term perspective, as fiscal intervention in monetary policy becomes more evident, a resurgence of US dollar liquidity may become the trend. With fiscal support bolstering the fundamentals, we believe that risk assets still have potential in the long term, and the downward cycle of the US dollar will continue.