Economic Update
DateTitle
2017/03/01An Early Stage of Turnaround in the Mainland’s Credit Environment
After going through years of eruption, the growth of non-performing loans (NPLs) in Mainland commercial banks is showing signs of winding down (see Chart 1). In the fourth quarter of 2016, NPLs only grew 18.7% YoY, the slowest growth rate since 3Q2013. The slower growth of NPL could be attributable to an observably higher comparable base and the improving economic environment.
2017/02/27Faster Pace of Rate Hikes in the Pipeline?
In the Semi-annual Monetary Policy Report submitted to Congress and the U.S. House of Representatives, Federal Reserve (Fed) Chairman Janet Yellen hinted that “several” interest rate hikes would be increasingly likely in 2017.
2017/02/01Warm Winter Weather Melting Businesses
The news that a few of my favourite restaurants will be going out of business soon made me disheartened. Afterwards, when I took a stroll in some key commercial districts on the Island and saw sparse customer traffic in popular stores despite the deep discounts on offer, our conservative forecast about the Hong Kong economy seems to be turning out to be true.
2017/01/13Less Expansionary Monetary Policy Expected In the Mainland
After ending a streak of year-on-year (YoY) declines in September 2016 (see Chart 1), produce prices continued to pick up at an accelerated pace in December 2016 in the Mainland. Producer Price Index (PPI) jumped 5.5% YoY in December, compared to 3.3% in November and the 1.5% average over the past three months. During the period, prices of materials (e.g. steel, rubber, copper) all saw double-digit YoY increases (see Chart 2), explaining the notable up-swing of the PPI.
2016/12/23Cautious Outlook Despite Improving Economic Data
The recent set of data released by the Census and Statistics Department showed that both the employment market and inflation have remained stable.
2016/12/15Faster Pace of Rate Hike May Strengthen HKD
Overnight, the Federal Open Market Committee (FOMC) announced it would raise the target range for the Federal Funds Rate to 0.5-0.75%. In addition, members of the FOMC indicated a tendency to raise interest rates at a faster pace compared to three months ago (see Table 1). We have taken this opportunity to elaborate our view of the economy and how it may be impacted by the rate hike.
2016/11/30The Recalibration of Interest Rates in the U.S.
Uncertainty has remained high in the post-U.S. election era, both in Hong Kong and abroad. At the same time, with the stable job market performance in the US, it is becoming clearer that interest rates will be moving upwards in the near term and onwards. Let’s look at how Hong Kong might be affected.
2016/10/20Chinese Domestic Economy Continued to Stabilise
The Chinese economy continued to show stabilised growth in the third quarter as real GDP grew 6.7% year-on-year (YoY), in line with the pattern in the first half.
2016/10/17What is in Store for This Winter?
Hong Kong retailers have been under some pressure this year but as we approach the holiday season, will things be looking upwards for them? Recent data does not seem to be too supportive.
Apathetic Inbound Tourism Continued to Hurt Retailers
After seeing a slight moderation in July, the headwinds returned and shattered hopes of retail sales stabilising as visitor arrivals dropped markedly in August (see Chart 1).
2016/09/23A Busy Week for Central Bankers
Leaders of the Bank of Japan (BoJ) and the Federal Reserve, separately, discussed their interest rate policies in the last couple of days. While the benchmark interest rates of these central banks have been kept on hold for now, we would like to highlight some elements that may be attention-worthy.
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