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MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
CHINA
Hong Kong equities are higher, led by travel related stocks, on reports hotel quarantine restrictions around Covid will be lifted for the city. Still, it may be too early for market optimism around easing restrictions in mainland China to lift meaningfully.
- The chart below plots the Oxford Stringency indices for Hong Kong and China. See CGRTSHKD <Index> on Bloomberg for more details on how this index is created and what it measures. Essentially though, higher readings mean tighter restrictions to control the spread of Covid.
- Since the start of the pandemic both measures have remained elevated, particularly for China. Other major economies have much lower readings for their stringency readings currently (US is sub 30, while the UK is at 11.1 for example).
- Today’s announcement by the Hong Kong authorities is the latest in a series of measures designed to make international travel to the city easier.
- The rough sell-side consensus though is that mainland China Covid restrictions won't be dramatically eased before early 2023. Indeed, the recent success of the Chengdu lockdown (at least relative to the Shangahi lockdown earlier in 2022), which only lasted a few weeks, may leave the authorities comfortable with the current strategy.
- In any case, the market will be on the watch for shifts in China policy around Covid as this is one key factor driving growth expectations.
Fig 1: China & Hong Kong Oxford Stringency Indices
Source: Oxford/MNI - Market News/Bloomberg
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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