Core Insights - The Hong Kong market liquidity index has rebounded to positive values after turning negative last month, supported by factors such as the narrowing SOFR-HIBOR spread, decreased volatility, and increased southbound capital flow [1] - In June, Hong Kong's foreign exchange reserves increased by USD 800 million to USD 431.9 billion, while the monetary base decreased by HKD 4.7 billion to HKD 2.12 trillion [1] - Capital inflows have returned to positive territory, with net inflows into Hong Kong stocks reaching HKD 231 billion in May, and southbound net inflows increasing from HKD 83.2 billion to HKD 92.8 billion [2] Market Performance - The Hong Kong market has continued a moderate upward trend, breaking through significant levels of 24,000 and 25,000 points, driven by improved US-China relations and better-than-expected economic data from China [4] - The average daily trading volume has expanded, reaching approximately HKD 239.1 billion, an increase of 8.4% month-on-month and 136.1% year-on-year [2] Monetary Supply and Loan Data - Total deposits in May grew by 10.7% year-on-year, with M3 growth also at 10.7%, marking the fifth consecutive month above 9% [3] - Loan growth turned positive for the first time since May 2022, with a year-on-year increase of 1.0% [3] Economic Indicators - The MSCI Emerging Markets Currency Index rose by 0.2%, while the MSCI Emerging Markets Index increased by 3.6% [2] - The iShares MSCI Hong Kong ETF recorded net inflows over the past month, although the Hang Seng Index underperformed compared to the emerging markets index, rising only 2.2% [2]

Core Viewpoint - The Indonesian Rupiah has strengthened due to capital inflows and the central bank's stabilization measures [1] Group 1 - The central bank of Indonesia has implemented measures that have contributed to the stability of the Rupiah [1] - Increased capital inflows have positively impacted the currency's strength [1]

Core Viewpoint - Deutsche Bank indicates that despite a recent recovery in the U.S. market, foreign investors are still "refusing to buy U.S. assets" [1] Group 1: Foreign Investment Trends - Deutsche Bank's foreign exchange strategist George Saravelos analyzed fund flows from overseas into U.S. stocks and bonds, revealing a "sharp stagnation" in purchases by foreign buyers over the past two months [1] - The report concludes that the current capital inflow into the U.S. is likely to slow down significantly, posing a challenge for the dollar, which is already facing dual deficit issues [1] Group 2: ETF and Fund Activity - Foreign ETF investors are simultaneously selling U.S. Treasuries and equities, with a notable shift in sentiment from bullish to bearish on the dollar since February [3] - The report highlights that European investors' holdings of U.S. assets have increased from approximately 5% in 2010 to 20% in 2024, while Japanese investors' holdings have doubled to 16% [3] - Saravelos has been tracking around 400 overseas-registered ETFs focused on the U.S. market, finding that investors are actively selling stocks and bonds, with a halt in new purchases of U.S. equities [3] Group 3: Dollar Forecast - Saravelos has revised down his expectations for the dollar, citing that Trump's policies are diminishing foreign investors' willingness to finance U.S. trade and budget deficits [4] - The strategist predicts that by 2027, the dollar-to-euro exchange rate will decline from approximately 1.14 to 1.30, and the dollar-to-yen rate will drop from 142 to 115 [4]