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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.
HKD
USD/HKD sits just near 7.8245, well within recent ranges. The pair hasn't spent much time above 7.8250 since mid-October though (with the 50-day EMA at 7.8255). The 200-day remains near 7.8290. On the downside, late October dips below 7.8200 were supported.
- This fits with a broadly stable US-HK short end yield differential backdrop over this period (see the chart below). The 3 month differential sits at +23bps as we head into the Fed meeting later. 1 month Hibor has drifted a touch lower, last fixed at 4.875%. The 3 month is steadier though, near 5.23% today.
- The 1 month risk reversal has drifted higher in recent sessions, last near -0.37, but is sub Sep highs.
- Hong Kong stock connect inflows were positive in October, but down compared to the Aug & Sep pace (see this BBG link). Also note September visitor arrivals were down 32% in m/m terms, with a -37% dip coming from China (see this BBG link).
- On the data front later we get Sep retrial sales. The market looks for +13.8% y/y, similar to August. Note Q3 GDP was weaker than expected yesterday, with growth barely positive at 0.1% q/q (+1.5% forecast). Headlines have crossed from BBG that BoFA has cut its Hong Kong 2023 and 2024 growth forecasts.
Fig 1: USD/HKD Versus US-HK 3 month Rate Differential
Source: 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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