Hong Kong: Convergence Trade
(2 min read)
Hong Kong’s economy is in its deepest recession since 2008. Real GDP contracted by 2.9% YoY in Q4. Q1 is on track for a sub -5% YoY print.
And yet, spot USDHKD has fallen close to the strong side of its 7.85/7.75 trading band. And 3m HIBOR continues to fix stubbornly 50bps above 3m LIBOR – a symptom of tight liquidity.
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