Group 1 - The Federal Reserve has maintained the federal funds rate at 3.5% to 3.75%, aligning with market expectations, while HSBC has kept its prime rate at 5%, indicating that other banks are likely to follow suit [1] - The current mortgage interest rate in Hong Kong is primarily at 3.25%, down from 4.125% before the interest rate cut cycle began in September 2024, providing significant relief for homeowners [2] - The average rental yield in the Hong Kong property market is currently at 3.5%, which is higher than the mortgage interest rate of 3.25%, suggesting potential for property price recovery and increased market activity [3] Group 2 - The expectation is that the U.S. will continue to lower interest rates this year, which could further reduce Hong Kong's interbank offered rate (HIBOR), benefiting banks by easing funding costs [1][2] - The current one-month HIBOR has decreased from an average of 3.5% in October last year to 2.65%, but it still needs to drop below 1.95% for further reductions in mortgage rates [2] - Positive factors such as stable stock market performance and increased demand for stable returns are expected to continue driving property market transactions in Hong Kong [3]

Core Viewpoint - The Mortgage Market Index (MMI) for December 2025 has dropped to 3.25%, marking a monthly decline of 6 basis points and a three-month consecutive decrease, reaching a five-month low [1] Group 1: Mortgage Rates - The majority of new mortgage owners are opting for H mortgage plans, with Hong Kong banks having lowered the best lending rate by a total of 0.25% in September and October last year [1] - The capped interest rate for new H mortgages has now fallen to 3.25%, leading to a corresponding decline in the MMI [1] Group 2: Economic Outlook - The U.S. labor market has not shown signs of accelerated deterioration, and it is expected that the Federal Reserve will maintain its current stance in the upcoming meeting [1] - The one-month HIBOR is currently at 2.79%, and its movement will depend on U.S. interest rates and capital flows [1] Group 3: Future Projections - It is anticipated that HIBOR will fluctuate between 2% and 3% in the first half of the year, with the actual interest rate for new H mortgages expected to remain at 3.25% [1] - Should there be an influx of capital into Hong Kong, HIBOR may challenge levels below 2%, potentially allowing H mortgage owners to secure loans at rates lower than the capped interest rate, which could lead to further adjustments in the MMI [1]

Core Viewpoint - The Hong Kong Monetary Authority (HKMA) has intervened for the seventh time to buy Hong Kong dollars as the currency continues to trigger the "weak side convertibility guarantee," leading to a decrease in the banking system's surplus to HKD 82.552 billion [1] Group 1: Monetary Policy and Interest Rates - The recent interventions by HKMA have caused the banking system's surplus to decline, resulting in fluctuations in the Hong Kong Interbank Offered Rate (HIBOR) [1] - HIBOR has been rising recently, with the one-month HIBOR reported at 1.03%, and it is expected to challenge the 1.5% level [1] - The Federal Reserve may lower interest rates for the first time in the fourth quarter, which could lead to capital inflows into the Hong Kong market, alleviating upward pressure on HIBOR [1] Group 2: Banking Strategies - Following the passage of the "Big and Beautiful" bill in the U.S., there is speculation that some funds may flow into the Asia-Pacific markets, prompting Hong Kong banks to potentially lower their prime rates based on their commercial strategies [1] - HSBC announced that it would maintain its prime rate unchanged, despite having lowered it three times last year at a pace and magnitude exceeding market expectations [1] - Currently, with HIBOR at 1%, the effective interest rate for housing loans calculated at "H+1.3%" results in a rate of 2.33%, which remains 1.17% below the capped interest rate of 3.5% [1]

Group 1 - The Mortgage Market Index (MMI) for May reported a significant drop to 2.8%, a decrease of 74 basis points, marking a 31-month low [1] - Over 95% of new mortgage clients opted for the H mortgage plan in May, influenced by the Hong Kong Monetary Authority's market interventions, which increased the banking system's surplus to HKD 174 billion [1] - The average one-month HIBOR fell sharply to 1.47% in May from 3.65% in April, contributing to the decline in MMI and easing the mortgage burden for property buyers in Hong Kong [1] Group 2 - The latest U.S. Consumer Price Index (CPI) for May was reported at 2.4%, slightly up from 2.3% in April, while the unemployment rate remained stable at 4.2% [2] - The impact of tariffs on inflation is still under observation, leading to expectations that the Federal Reserve will maintain its current interest rates for the time being [2] - There is a belief that if inflation remains manageable, there may be one opportunity for a rate cut in the second half of the year [2]