RRR Cut Watch as HSBC Hikes HKD Deposit Rates 10,000pc

The Standard: HSBC raises US dollar deposit rate
The Hongkong and Shanghai Banking Corporation said it will lift its US dollar deposit interest rate from 0.001 percent to 0.1 percent, the first adjustment since May 21, 2009.

iFeng: 投资者请系好安全带:利率全球普涨的时代正在来临 (Investors should fasten their seat belts: The era of worldwide rising interest rates approaches)
As a matter of fact, HSBC also announced on May 2 that it would raise the Hong Kong dollar fixed deposit rate. The new fund with more than 10,000 yuan will hold a deposit interest rate of 1.35% for 6 months, and the deposit rate for a 12-month deposit will reach 1.6%, but it only applies to specified funds. Integrated financial account, promotion period until the end of June.

Market participants said that they believe that other banks will follow HSBC to raise interest rates. It is expected that the Hong Kong dollar's one-year deposit will be as high as 2% in the future.
Third, the stronger US dollar caused investors to worry that bond issuers will be able to repay debt-denominated bonds. According to EPFR Global, which tracks the trends of funds, investors have withdrawn from emerging market bond funds as of the week of May 2. The billion U.S. dollars in funds was the largest withdrawal scale since the global market sold in early February of this year. It was also the first time in 16 months that a net outflow of funds has occurred for the first time in two weeks.

In the recent three weeks, the US dollar pointed out that the external market has undergone major changes. In addition to the rising interest rates and currency devaluations in the aforementioned countries and regions, emerging markets, stock markets and bond markets are also facing a sell-off.

A Morgan Stanley research report released on May 2 pointed out that the rise of Asian emerging market stocks may have lost its momentum and its profit forecast is overly optimistic.

For China, the increasing linkage of the global financial market has made it difficult for them to remain alone. Many analyses pointed out that in order to cope with the pressure of capital outflow caused by the strengthening of the U.S. dollar and the continued interest rate hike by the Fed, there will be room for China's central bank to use RRR cuts or target downward adjustments. The market interest rate will continue to rise, and the trend of the stock market will become even less bright.

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