Recently, textile people are lamenting that it is getting harder and harder to sell some cloth. At first, you only need to pay attention to the price of cloth, and then you start to pay attention to the price of polyester. After that, you can’t do it without looking at PTA. Then you also have to look at the trend of crude oil. Recently, even the Federal Reserve has to raise interest rates. Attention. If you are a little careless, you may become a “big mistake”, and you may be “taken over” by a high position one day.
This week, the Federal Reserve may raise interest rates again.
The Federal Reserve’s plan will be announced in the early morning of July28 Beijing time7The monthly interest rate decision results have now entered a silent period, and there are no more signals to the market for the time being. However, in6monthCPIdata“ After the announcement of ““, the outside world believed that the probability of the Federal Reserve increasing interest rates to 100 basis points increased sharply. But then Fed officials “put out the fire” and voiced support for continuing to raise interest rates 75 basis points.
From the perspective of inflation indicators, the CPI data of the United States in June reached a new high, CPI A year-on-year increase of 9.1%, a record high in nearly 40 years. There is no short-term inflation ease.
If the Federal Reserve does raise interest rates this week, what kind of knock-on effects will it have?
Polyester raw materials “diving”
For the Federal Reserve to raise interest rates, the most intuitive impact it may have is the change in crude oil prices. After the last time the Federal Reserve raised interest rates by 75 basis points, international oil prices suddenly fell from 120 US dollars, reaching the lowest level of less than 120 US dollars. 95 US dollars, which also interrupted the rising trend of polyester raw material prices, and then the raw material prices began to fall.
Even if it is not the Federal Reserve, the euro raised interest rates last week, and crude oil prices also fell 5%.
This week, the Federal Reserve may raise interest rates again, and the maximum probability is 75 basis points, or even 100Basic point. If the rate of interest rate hike is really so large, international oil prices will continue to be suppressed, and the price of polyester raw materials is likely to “divide” again.
Exchange rate fluctuations
In addition to affecting raw material prices, the Fed’s interest rate hikes will inevitably affect the exchange rate. For textile companies engaged in foreign trade, exchange rate fluctuations are also a matter of great concern.
After the last time the Federal Reserve raised interest rates, a large amount of U.S. dollars flowed back into the United States, and the exchange rates of mainstream international currencies such as the Japanese yen, the euro, and the pound sterling plummeted. Since the beginning of this year, the exchange rates of the yen and the euro have both fallen by more than 20%. The size of China’s textile industry determines that it must face customers all over the world. Europe, Japan and South Korea are very important export markets for China. Their currency exchange rates have depreciated, but the RMB exchange rate has remained strong. This means that the price of textiles exported in the past has become more expensive, which means that the goods exported by China have become more expensive.20% will naturally affect exports.
If the Federal Reserve continues to raise interest rates this week, according to economic laws, the exchange rates of currencies such as the euro and the yen will inevitably fall further, thus affecting textile exports.
Economic collapse in some countries
Compared with the impact on the exchange rate, the more disastrous consequences of the Fed’s interest rate hikes may be the economic collapse of some less developed countries.
Some time ago, Sri Lanka’s domestic economy collapsed, and the president’s escape occupied media headlines around the world. Sri Lanka, as a country based on tourism and agricultureIn a well-known country, tourism revenue has shrunk significantly due to the COVID-19 epidemic. At the same time, problems have arisen in agricultural production due to some erroneous operations by the local government. As soon as the Federal Reserve raises interest rates, the U.S. dollar flows back, and its foreign exchange reserves cannot even repay the foreign debt it owes. get up.
Sri Lanka is just a microcosm of many small countries. Even India has been forced to introduce rupee settlement. First-class manufacturing powers such as Germany and Japan have also begun to run trade deficits and cannot protect themselves. Those who were originally on the verge of economic collapse due to the new crown epidemic Small countries are even worse off.
As I said before, China has produced so much cloth that it cannot wear it all. But when the market cannot afford it, domestic textile companies will only have a harder time than now.
Postscript
The possibility of the Fed raising interest rates is very high. In the short term, it may cause a sharp drop in raw material prices and changes in exchange rates; in the long term, the Fed raising interest rates means that the United States is harvesting the world, and the economies of many countries in the world are now It is already on the edge of the cliff. After being harvested by the United States, the impact on the global economy may be huge.
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