Will Overseas Liquidity Become a Problem?

CICC believes that current overseas dollar liquidity has not tightened significantly and expects it to remain range-bound, avoiding major contractions. Among the three core factors: pressure from Fed rate hikes has eased; supply disruptions from U.S. Treasuries in Q3 are limited; and a repeat of the yen carry trade reversal storm is unlikely under static conditions, though close watch on the yen exchange rate is warranted. September is a key juncture; if market pullbacks occur due to liquidity issues, it could present a better buying opportunity.