25-04-2018, 03:21 PM
US 10 Treasury yield just went up above 3%, about 20 minutes ago. Looks like a stronger move than the brief venture above 3% yesterday. A couple of months ago, some analysts were taking about 3% being significant for equity markets. However, having, after a long pause, finally got there, are markets going to shrug it off as something that they have been expecting?
One place that the gradually rising US rates have had an obvious impact is Hong Kong, where the Monetary Authority has been buying a lot of HK$ to defend the US$ peg. The higher interest rates available on US$ than on HK$ has been causing quite a carry trade, and putting downward pressure on the HK$. It will be interesting to see if interest rates moving up towards US rates starts to cool the red hot property market.
One place that the gradually rising US rates have had an obvious impact is Hong Kong, where the Monetary Authority has been buying a lot of HK$ to defend the US$ peg. The higher interest rates available on US$ than on HK$ has been causing quite a carry trade, and putting downward pressure on the HK$. It will be interesting to see if interest rates moving up towards US rates starts to cool the red hot property market.