CITIC Securities: Overexposure to assets reliant on excessive liquidity easing should be avoided

Golden Ten Data reported on May 22 that a research report from CITIC Securities indicates that the shift in the macroeconomic cycle determines the direction of asset allocation. The decline in macro liquidity, along with the rise in the inflation and earnings cycles, will become the main lines for allocating major asset classes in the second half of the year. From the perspective of mapping the macro cycle to asset classes, allocations should avoid assets that excessively bet on liquidity easing and instead focus on those with high certainty driven by profitability and inflation. Base metals, crude oil, and equity assets in China and the US may become more certain directions in the second half of the year. The Chinese bond market also offers allocation opportunities, but the proportion of bond investments will depend on investors’ risk preferences and expected returns. US Treasuries, however, are expected to come under pressure in an environment of high inflation and limited Fed easing.