Economic Update
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.
2016/09/13The Meaning of an Established Stabilising Trend
The Chinese National Bureau of Statistics released a set of data today, suggesting that the economy is continuing to stabilise in the second half of the year. Looking into the data and the rhetoric of a key official, we believe there is increasing evidence that the Central Government’s monetary stance will become less aggressive going forward.
2016/09/08The Search for Cues from the G20 Summit
While many observers might have expected the G20 Summit to be just another gathering featuring top policymakers from around the world, in his opening speech, President Xi Jinping urged the participating dignitaries to avoid "empty talk" and called for actions to stimulate the global economy. Indeed, several notable developments occurred over the past week which we will cover in the following paragraphs.
2016/08/05Turning around? More like deteriorating at a slower pace
While Hong Kong’s economic activities remained downbeat in the second quarter, the year-on-year declines in some high frequency data points, including those of trade, retail sales, and visitor arrivals, moderated.
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