Core Viewpoint - The current Hong Kong dollar deposit rates are significantly lower than the US dollar time deposit rates, with most banks offering over 3% for USD deposits compared to around 1% for HKD deposits [1][19]. Group 1: Interest Rate Trends - As of June 17-18, the 1-month HIBOR has further decreased to around 0.5%, and the HKD exchange rate has approached the 7.85 "weak side guarantee" level without intervention from the Hong Kong Monetary Authority (HKMA) [3][15]. - The HKMA has released a substantial amount of liquidity, leading to a continuous decline in HIBOR and consequently pushing down HKD deposit rates significantly [6][19]. - The HKD time deposit rates at major banks have dropped to as low as 1%, while USD time deposit rates remain above 3% [19][20]. Group 2: Currency Exchange Dynamics - The HKD has depreciated against the USD due to a widening interest rate differential, with the 3-month interbank rates showing a spread of over 300 basis points [5][12]. - The HKD liquidity has become very ample following the HKMA's actions, which has led to a decrease in short-term interest rates and a widening gap between HKD and USD rates [12][13]. - The HKD exchange rate has moved from 7.75 to 7.85, indicating a shift towards the weak side of the peg [14][17]. Group 3: Economic Implications - Lower interest rates are seen as beneficial for the overall economic environment in Hong Kong from a macroeconomic perspective [21]. - The current low interest rate environment may not be sustainable due to various factors affecting the supply and demand for HKD, which could lead to potential increases in rates in the future [22].

Core Viewpoint - The Hong Kong stock market has experienced fluctuations due to the impact of "reciprocal tariffs," with the Hang Seng Index dropping below the emotional low point from the previous trade friction, but stabilizing around the support level of 20,500 points before rebounding. Recent optimism in U.S.-China tariff negotiations and the performance of sectors like new consumption and innovative pharmaceuticals have contributed to a new round of market increases, although the index has struggled to break through the 23,000-24,000 range [1][2][4]. Group 1 - Since the implementation of reciprocal tariffs on April 2, the Hong Kong stock market has underperformed compared to global markets, with increasing concentration and crowding in sectors such as new consumption, innovative pharmaceuticals, essential retail, and banking, while sectors like discretionary retail and consumer services lagged behind [1][2][4]. - The sharp decline in Hong Kong Interbank Offered Rate (Hibor) since early May, with the 1-month Hibor dropping from 4.1% to 0.6%, indicates a significant increase in short-term liquidity, which has positively influenced market trends, particularly for growth stocks concentrated in new consumption and innovative pharmaceuticals [8][9][25]. - The decline in Hibor is attributed to the automatic operations of the currency board system under the linked exchange rate regime, with the Hong Kong Monetary Authority (HKMA) injecting substantial liquidity to maintain the currency peg, resulting in a significant drop in Hibor rates [11][14][17]. Group 2 - The HKMA's liquidity injection was notably larger than historical norms, with a total of 1,294 billion HKD injected in just four days, leading to a rapid decline in the 1-month Hibor to 0.5% and a swift depreciation of the Hong Kong dollar towards the weak end of the peg [18][20][34]. - The influx of liquidity, combined with a weaker U.S. dollar and positive signals from U.S.-China negotiations, has supported the overall performance of the Hong Kong stock market, particularly benefiting crowded trades in growth sectors [26][30][41]. - The current market environment is characterized by an excess of liquidity ("funding boom") and limited returns ("asset scarcity"), leading to concentrated trading in sectors like new consumption and innovative pharmaceuticals, with trading volumes reaching historical highs [27][28][49]. Group 3 - The outlook for Hibor suggests that it is unlikely to decrease further, with potential tightening of liquidity expected as the HKMA may need to intervene to maintain the weak end of the peg, especially as the Hong Kong dollar approaches the 7.85 threshold [38][41]. - The market may face challenges due to the potential for liquidity tightening, the impact of ongoing U.S.-China tariff negotiations, and the pressure from a high number of IPOs and placements, which could increase supply and affect stock performance [41][42][46]. - Investors are advised to consider adjusting their positions, potentially shifting towards dividend-paying stocks or waiting for opportunities to acquire quality assets at lower costs, particularly in light of the current market volatility [50].

Core Viewpoint - The Hong Kong dollar (HKD) has recently experienced significant fluctuations against the US dollar, triggering both the "strong-side convertibility guarantee" and the "weak-side convertibility guarantee" due to changes in liquidity and interest rates [1][2]. Group 1: Currency Exchange and Monetary Policy - On April 30, the HKD/USD exchange rate hit 7.75, activating the "strong-side convertibility guarantee" [2]. - From May 3 to 6, the Hong Kong Monetary Authority (HKMA) injected a total of 129.4 billion HKD into the market, leading to an expansion of HKD liquidity [2]. - The injection of HKD significantly lowered the HIBOR rates, with the 1-month HIBOR dropping from 3.65% in April to 0.67%, and overnight rates approaching 0% [2]. Group 2: Market Reactions and Expectations - The widening of the HKD-USD interest rate differential (HIBOR-SOFR) has prompted carry trades, resulting in a depreciation of the HKD, which is now approaching the "weak-side convertibility guarantee" at 7.85 [2]. - The HKMA is expected to tighten liquidity in the short term, which may alleviate the depreciation pressure on the HKD as HIBOR rates rise again [2]. - Historically, the HKD has touched the "weak-side convertibility guarantee" four times since 2017, leading to pressure on the Hang Seng Index and Hang Seng Tech Index during those periods [2].

Group 1: Core Views - Hong Kong will strengthen the HKD-CNY dual counter trading, allowing investors to purchase RMB-denominated stocks listed in Hong Kong using offshore RMB [1][8] - The Hong Kong government maintains the Linked Exchange Rate System (LERS) despite geopolitical tensions, asserting it as a fundamental factor for Hong Kong's economic success [1][3] - The financial system in Hong Kong is not entirely dependent on the LERS, with plans to enhance its role as a global offshore RMB business center [1][6] Group 2: Economic Context - The LERS has been in place for over 40 years and has proven effective in maintaining stability during various economic cycles and crises [1][2] - The stability of the HKD against the USD reduces exchange rate risks for international investors and traders, which is crucial for Hong Kong's status as an international financial center [4][6] - High interest rates in the US have led to increased borrowing costs in Hong Kong, impacting sectors sensitive to interest rates, such as real estate and banking [3][5] Group 3: Future Developments - There is a growing need for Hong Kong to develop an offshore RMB capital market to support its increasing asset base, especially as the USD's stability is questioned [6][7] - The Hong Kong Monetary Authority (HKMA) has reported that RMB deposits reached 1,030.9 billion HKD, indicating a significant liquidity pool independent of the USD [7] - The implementation of mechanisms like "Bond Connect" and "Wealth Management Connect" enhances Hong Kong's role as a bridge between mainland China and global capital markets [7][8]

Core Viewpoint - Recent sudden easing of Hong Kong dollar liquidity has led to a sharp decline in Hong Kong dollar interest rates, resulting in active interest rate arbitrage activities and a significant rebound of the US dollar against the Hong Kong dollar [1][2]. Group 1: Currency Fluctuations and Market Dynamics - The US dollar to Hong Kong dollar exchange rate has experienced fluctuations within a range, which is considered normal under the linked exchange rate system [2]. - In early May, strong demand for the Hong Kong dollar due to stock market activities and concerns over "de-dollarization" led the currency pair to drop to 7.75 [2]. - The Hong Kong Monetary Authority (HKMA) bought 17 billion USD and sold 1,294 billion HKD, increasing the balance from 44.6 billion HKD to 174 billion HKD, the highest level since July 2022 [2]. - The sudden easing of Hong Kong dollar liquidity has caused the overnight Hong Kong Interbank Offered Rate (HIBOR) to approach zero, with the interest rate spread between short-term secured overnight financing rate (SOFR) and HIBOR widening to unprecedented levels [2][3]. Group 2: Factors Influencing Currency Movements - The speed of the rebound in the US dollar against the Hong Kong dollar has exceeded expectations, driven by temporary demand for the Hong Kong dollar related to upcoming IPOs and dividend payments [3]. - There has been a notable slowdown in capital inflows through the Stock Connect program from mainland China, dropping to 5.8 billion USD in May compared to an average of 20 billion USD per month from January to April [3]. - Existing issues of weak credit demand in the Hong Kong economy have been exacerbated, with the loan-to-deposit ratio for the Hong Kong dollar reaching a decades-low of 72.3% in April [3]. Group 3: Future Projections and Considerations - The ability of the US dollar to Hong Kong dollar exchange rate to significantly drop below 7.85 will depend on the reduction of the balance, which previously fell to 54 billion HKD in 2019 and 45 billion HKD in 2023 [4][5]. - Factors such as the acceleration of stock fund inflows, demand related to the current dividend season and IPOs, and the potential for Hong Kong residents to engage in "de-dollarization" transactions will be critical [5][7]. - Market expectations for a Federal Reserve rate cut, with approximately 60 basis points anticipated starting in September, could influence the US dollar to Hong Kong dollar exchange rate [7]. Group 4: Sustainability of the Linked Exchange Rate System - The sustainability of the linked exchange rate system hinges on the HKMA's sufficient foreign exchange reserves, which are currently at nearly 200% of the monetary base, exceeding the theoretical requirement of 100% [13]. - Historical patterns indicate that when the Federal Reserve significantly cuts rates, the US dollar to Hong Kong dollar exchange rate has previously dropped to 7.75, suggesting that various factors influence currency fluctuations beyond just interest rate cycles [12][13].

Group 1 - Hong Kong will maintain the peg of the Hong Kong dollar to the US dollar, while enhancing its position as a global offshore RMB business center, with plans to introduce more RMB products for overseas investors [1] - The US Senate plans to propose significant revisions to Trump's $3 trillion economic plan, aiming for enactment before July 4, despite criticisms from figures like Elon Musk [1] - The New York Fed's survey indicates a decline in US consumer inflation expectations for May, with the one-year expectation dropping from 3.6% to 3.2%, marking the first decline since 2024 [2] Group 2 - Japan's Cabinet Office revised the first quarter GDP contraction to a 0.2% annual rate, better than the initial estimate of 0.7%, which may support the Bank of Japan's cautious stance [2] - The Japanese government is considering repurchasing previously issued ultra-long bonds at low interest rates, in response to rising yields [3] - Japanese investors sold a record ¥1.48 trillion in German sovereign bonds in April, the largest monthly reduction since 2014, and also sold ¥1.07 trillion in US sovereign bonds, the largest reduction since October of the previous year [3] Group 3 - US stock indices closed mixed, with the Dow Jones remaining flat at 42,761.76 points, the S&P 500 rising by 0.09% to 6,005.88 points, and the Nasdaq increasing by 0.31% to 19,591.24 points [4] - US Treasury yields fell across the board, with the 2-year yield down 4.15 basis points to 3.993%, and the 10-year yield down 3.18 basis points to 4.474% [4] Group 4 - International oil prices strengthened, with US crude oil main contract rising by 1.24% to $65.38 per barrel, and Brent crude oil main contract increasing by 0.96% to $67.11 per barrel [5] - The US dollar index fell by 0.19% to 99.01, while non-US currencies generally appreciated against the dollar [5]

Group 1 - The influx of hot money into Hong Kong has led to a rise in the Hong Kong dollar (HKD) exchange rate to 7.75, but it has recently dropped to a low of 7.84, marking the weakest level since September 2023 [1][2] - Factors such as increased IPO activity, southbound capital inflows, low deposit rates in mainland China, and capital returning from the US are driving liquidity into Hong Kong [1][2] - The Hong Kong Monetary Authority (HKMA) may intervene further in the market due to the negative interest rate differential between the US dollar and the HKD [2] Group 2 - The HIBOR (Hong Kong Interbank Offered Rate) is expected to rise in the coming months due to dividend distributions, quarter-end funding demands, and the absorption of liquidity from bond and stock issuances [1][2] - The current loan-to-deposit ratio in Hong Kong is 20 percentage points lower than in 2019, indicating low credit demand despite a liquidity-rich environment [2] - The HKMA's currency peg system has remained intact since 1983, despite historical foreign exchange crises [2]

Core Viewpoint - The Hong Kong Monetary Authority (HKMA) indicates that the Hong Kong dollar (HKD) interbank rates are approaching US dollar rates due to market supply and demand, with current conditions showing an oversupply of HKD funds. Future fluctuations in the HKD exchange rate and interest rates are anticipated, and citizens are advised to consider potential risks in their financial decisions [1][4]. Group 1: Market Conditions - The HKD has recently strengthened due to increased capital market activities, particularly from the southbound stock connect, with the Hang Seng Index rising approximately 10% year-to-date and the technology index up 14% [2]. - In early May, the HKMA intervened in the market, buying a total of $16.7 billion USD and selling 129.4 billion HKD, as the HKD exchange rate approached the strong-side convertibility guarantee level of 7.75 HKD to 1 USD [2][3]. Group 2: Interest Rate Dynamics - Following the HKMA's market intervention, the HKD liquidity surged nearly fourfold, increasing from approximately 45 billion HKD to about 174 billion HKD, leading to a significant drop in interbank rates, with the one-month interbank rate falling from an average of 3.65% in April to 0.96% [3]. - The overnight rate also decreased from an average of 3.41% in April to 0.03%, reflecting normal market behavior under the linked exchange rate system [3]. Group 3: Future Outlook - The future trajectory of the HKD exchange rate and interest rates remains uncertain, influenced by factors such as seasonal demand for funds from new stock offerings and dividend distributions, as well as external factors like US Federal Reserve policies and global financial market conditions [4]. - If the oversupply of HKD persists, the market forces from carry trades may weaken the HKD exchange rate, potentially leading to a rise in HKD interbank rates, which could approach US dollar rates [4].

中国香港关键的银行间拆借利率大幅走低，此前中国香港采取外汇干预措施，引发了市场对港元的看跌 押注。香港1个月期银行间同业拆借利率(Hibor)扩大跌幅，周二跌破1%，为2022年以来首次。港元5月 以来已下跌近1%，势创1983年联系汇率制度实施以来最大单月跌幅。5月初，中国香港金管局介入，通 过大量抛售本币以抑制其升势。此项操作提升了市场流动性、降低了借贷成本，因而缓解了港元升值压 力。（彭博） ...

（本文作者王树西，对外经济贸易大学信息学院讲师） 金管局表示将持续监察市场，未来若有波动可能进一步行动。此次干预反映市场对美联储政策的预期 ——美元走弱、资金流向新兴市场。 综上，港元强势与金管局干预增强了国际投资者对香港金融市场的信心，吸引资本流入。预计以下港股 板块或受益：科技成长股、高股息蓝筹股、银行板块、消费复苏板块、新能源与ESG主题板块、房地产 板块。 此次干预背景复杂。据金管局发言人表示，近期港元偏强主因股票投资相关的港元需求增加：全球经济 不确定性上升，国际资金流入香港，港股持续上涨推升港元需求；叠加美元走弱，投资者对美元避险地 位存疑，资金流出美元资产加剧港元升值压力。 金管局干预既是维护汇率稳定，也是确保金融市场有序运作。香港超4000亿美元的外汇储备足以支撑此 类干预、稳固市场信心。投资者需密切关注港元走势，及时调整策略应对波动。 对经济和市场有何影响？ 一方面，购买美元意味着向市场注入港元，扩大货币基础、增加供应，银行体系结余上升可能短期压低 香港利率，刺激经济活动或资产价格；另一方面，港元与美元挂钩，香港利率长期跟随美国，干预对利 率整体影响有限。 干预的核心意义在于稳定汇率，保障进 ...