Hong Kong SAR
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Even the groups that are least sympathetic to the protesters – political moderates, the elderly, low-income groups, and the least educated – are more or less divided over the controversial extradition bill that prompted the unrest. This…
Are Hong Kong Dollars Fully Backed By FX Reserves? (Part 2…
Are Hong Kong Dollars Fully Backed By FX Reserves? (Part 1…
Highlights Like in any currency board, Hong Kong dollar money supply is not fully backed by foreign currency (FX) reserves. Yet, the Hong Kong authorities have large FX reserves to defend the currency peg for now. Regardless, mounting capital outflows and the ensuing currency defense will lead…
Hong Kong: A New Front In The U.S.-China Struggle (Part 2…
Hong Kong: A New Front In The U.S.-China Struggle (Part 1…
Highlights The March data brought the first signs of a stabilization in China’s “hard” economic data, albeit from a weak level. The April PMIs disappointed, but they remained in expansionary territory; this is in addition to a continued significant improvement in the trade-related subcomponents…
Please note that a Special Alert titled "Brazil: A Regime Shift?" discussing investment implications of the weekend elections was published on Tuesday. Highlights The combination of rising U.S. bond yields and slumping growth in EM/China heralds further downside in EM risk assets and…
Feature Valuations, whether for currencies, equities or bonds, are always at the top of the list of the determinants of any asset's long-term performance. This means that after large FX moves like those experienced so far this year, it is always useful to pause and reflect on where currency…
Highlights Hong Kong's leverage burden is a corporate sector rather than a household sector problem. But this corporate sector debt is highly concentrated in the finance and real estate industries, meaning that investors should be legitimately concerned over Hong Kong's extremely elevated debt…