The direction of global capital markets has changed!
In the past few years, the world has experienced a feast of 'flood irrigation.' The Federal Reserve has been easing, Japan has been easing, Europe has been easing, and China has also been easing.
This is like having five or six huge faucets open at the same time around the world, and asset prices naturally rise as the water level does.
However, standing at the tail end of 2025, we must be clearly aware that the rules of easing have changed.
The valves of global liquidity are being turned off one by one — the Bank of Japan has raised interest rates, and the European Central Bank is not so generous anymore.
In 2026, there are only two remaining 'super faucets' that are truly still pouring water out: the United States and China.
This is a redistribution of 'money'. Understanding liquidity means understanding the core logic of the market in 2026.
Today, Bianian will deeply analyze this 'great change' regarding global liquidity.
1. From 'full-scale irrigation' to 'point release'.
First, we need to elevate our perspective to a global dimension.
In the past, major global central banks often resonated in sync. But by 2026, we will witness a rare 'great divergence in monetary policy'.
First, let's talk about Japan.
For the past twenty years, the Bank of Japan has been playing the role of the global 'wholesale provider of cheap funds'.
Due to long-term zero interest rates or even negative interest rates, Wall Street capitalists have discovered a perfect arbitrage model: borrow cheap yen, convert it to dollars, and buy globally. This is called 'carry trade'.
However, a major event occurred last week: the Bank of Japan raised interest rates.
Although this interest rate hike is not large, and the statements from Governor Ueda are very 'dovish', it releases an extremely clear signal: the Bank of Japan's faucet is being tightened.
This means that for the global market, in the first half of next year, those funds relying on yen leverage will become hesitant or even retreat.
The era of 'borrowing money casually' is gradually coming to an end.
Now looking at Europe.
Many people expect the European Central Bank to significantly lower interest rates next year. But Bianian believes that the faucet in Europe is likely to be 'half open and half closed' next year.
Why? Because inflation pressure in Europe is still very high, and prices are absurdly expensive.
The main tone in Europe next year will be 'fiscal easing'. They need to invest in infrastructure and re-industrialization, which requires the government to issue bonds to spend money, benefiting the real economy, but with relatively small direct spillover effects on financial markets.
Therefore, Europe next year will be 'spending existing money' to accomplish big tasks, rather than 'printing new money' to speculate on assets.
Finally, there is the United States.
When both Japan and Europe retreat to the second line, the pressure of global liquidity is entirely on the Federal Reserve.
Fortunately, at present, the Federal Reserve's faucet is still open.
This is why US stocks have recently shown no signs of falling. As long as there is a continuous release of dollars into the market, asset prices will have support.
There is a key time window here: the first half of next year.
Currently, the market generally expects the Federal Reserve to continue lowering interest rates in the first half of next year.
This is what Bianian refers to as the 'honeymoon period'.
In the first half of next year, the Federal Reserve will still be in the interest rate cut cycle, and liquidity will be abundant. This provides a very valuable 'window period' for the global market.
However, the risk lies here.
There used to be five or six faucets; now that one is broken, there are still others to support. Now there is only this one left. Once we reach the second half of next year, if the wind changes, the global market will face the risk of losing control.
Therefore, for overseas markets: seize the certainty of the first half of the year, and be wary of the uncertainties in the second half.
2. How is the domestic situation?
After discussing overseas, let's turn our attention back to the domestic situation.
This is the part that Bianian wants to deeply analyze with everyone today.
Recently, everyone has been very pessimistic, feeling that the economic data is poor and the stock market definitely has no hope.
Wrong.
If you are a long-time fan of Bianian, you should know the counterintuitive logic I repeatedly emphasize during live broadcasts: poor economy ≠ falling stock market.
Why? Because one of the core driving forces behind stock market fluctuations is liquidity.
Even if the fundamentals are average, as long as there is enough money and no other place for it to go, it will buy up asset prices.
So, where will the money for A-shares come from next year?
There are two huge forces converging into a potential 'liquidity bonus'.
The first force comes from the central bank as the 'visible faucet'.
I wonder if everyone has carefully studied the central economic work meeting transcript from last week.
There is a sentence in there that is not many words but is extremely weighty: 'Flexibly use diverse monetary policies such as reserve requirement ratio cuts and interest rate reductions.'
Everyone note, this is the exact wording written in the document.
In China, policy language is very rigorous. Since it has been written that 'reserve requirement ratio cuts and interest rate reductions' will take place, it is not a question of 'whether to do it' but 'when to do it'.
Bianian dares to make a bold judgment here: in the first half of next year, even as early as January, a reserve requirement ratio cut and interest rate reduction may be implemented.
When the central bank releases easing signals, it is the strongest indication of marginal improvement in liquidity. It tells the market: the state is supporting, funding costs are decreasing, and the money in banks needs to be released quickly.
The second force, which is largely overlooked by most people, is called 'corporate foreign exchange settlement'.
This is the potential 'bullet' for A-shares next year, larger than residents' deposits.
Let's turn the clock back two or three years.
At that time, the renminbi faced depreciation pressure, depreciating from 6.3 all the way to 7.3. Meanwhile, the dollar deposit rate reached 3.5%, while domestic rates were only 1.5%.
If you are an exporting boss, what would you do?
If you earn dollars, you certainly don’t want to settle foreign exchange.
You will keep the dollars in your account, enjoying high interest while also reaping benefits from exchange rate appreciation.
But now, the situation has changed. The renminbi has entered an appreciation channel.
Since April or May this year, expectations of renminbi appreciation against the dollar have formed.
Especially if the Federal Reserve lowers interest rates next year, the dollar index falls, and the renminbi exchange rate rises from 7.2 to 7.0, or even breaks 7, what will happen?
This is like the price of gold rising. When gold was at 900, you thought it was expensive, but when it rises to 1000 and continues to rise, you panic and buy in a rush.
The exchange rate is the same.
Once the trend of renminbi appreciation is established, especially if it really breaks 7, those business owners holding large amounts of dollars will be unable to sit still.
"If I don’t settle foreign exchange soon, the money I have will shrink every day. The interest rate spread is no longer profitable, and the exchange rate will depreciate!"
Therefore, we will see a 'foreign exchange settlement tide', where dollars will be sold off and exchanged for renminbi, flowing back domestically.
So where will the cash flow of the renminbi go after it returns?
This is the most critical question.
Bosses have a few places to go with the money:
Expand reproduction? In the current environment, most bosses are rational. They won't blindly make heavy asset investments (like building factories) before demand shows a clear recovery.
Save in the bank? Domestic interest rates are so low (around 1%), it's possible to save, but the appeal is not strong enough.
Buy a house? The logic of the property market has changed.
The remaining path is actually quite limited and clear, which is the capital market.
This is not just a relocation of ordinary people's savings; this is a 'mass relocation of corporate deposits'.
When they hold a large amount of cash and find it hard to operate in the real sector, the property market is poor, and deposits yield no interest, the core assets and high-dividend assets in the capital market become the most attractive 'treats' in their eyes.
3. What should ordinary people do in 2026?
After clarifying the logic of global and domestic liquidity, what should ordinary people do?
In the first half of next year, we need to keep a close eye on two signals, referred to as 'breaking the cup as a signal':
The first signal: the Federal Reserve's interest rate meeting in January. As long as they don't suddenly turn hawkish, overseas liquidity will remain stable.
The second signal: the renminbi exchange rate. Once it approaches or breaks the key point of 7.0, attention should be paid to the asset revaluation opportunities brought by the 'foreign exchange settlement tide'.
Since domestic liquidity is likely to be loosened, and the economic fundamentals are bottoming out, the assets driven by 'liquidity' are the first choice.
The first thing to focus on is core assets, which are industry leaders.
When the economy is under pressure, some industry leaders can actually capture market share and increase market share. Once liquidity returns, they will be the first to benefit.
The second type is dividend assets, that is, high-dividend assets.
The money returned from corporate foreign exchange settlements is often the 'lifeline' of the bosses. They are not seeking to double their investments but to pursue stability. High-dividend assets remain their 'favorite'.
Finally, Bianian wants to say that 2026 is destined to be an extraordinary year.
The global faucets are closing one by one, leaving only the two super engines of China and the United States still open.
This means that market volatility will increase, and differentiation will intensify.
But for us investors, 'water' is still there, and opportunities are present. Don't let short-term economic data blind you; learn to see through phenomena to essence.
When the central bank openly signals easing, when companies are forced to settle foreign exchange, and when trillions in funds are seeking an outlet, the logic of 'asset scarcity' still holds.