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]