Hong Kong, with a stressed housing market with staggeringly high prices, just saw a surge in interest rates.
Liquidity moves markets!Follow the money. Find the profits!
“It’s a warning shot” to Hong Kong’s overpriced assets, said Cliff Tan, Hong Kong-based East Asia head of global markets research at MUFG Bank Ltd. “I expect interbank liquidity to be even tighter and bank funding needs to be more pressing, hence higher money market rates and higher mortgage rates.”
Here are four charts to show Hong Kong dollar’s funding costs are spiking:
One-month interbank borrowing costs, known as Hibor, surged the most in nearly a decade Monday, as liquidity tightened amid bets local banks will increase the prime rate for the first time since 2006. That came as the Hong Kong Economic Times reported eight of the city’s lenders including HSBC Holdings Plc and China CITIC Bank International Ltd. raised time deposit rates last week.
And then we have the tanking USDHKD.
Rising rates could help collapse China’s housing market.
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