Daily Brief Thematic (Sector/Industry): Deep Dive on Hong Kong Macroeconomics: The Hong Kong Dollar Peg and Its Significance on Hong Kong and more

In today’s briefing:

Deep Dive on Hong Kong Macroeconomics: The Hong Kong Dollar Peg and Its Significance on Hong Kong
Good Morning Japan |A Nothing Day as SPX up Small; NUGGET:BOJ to See 2% CPI in FY25=Easy for Longer
China TMT Update (Apr.18): XPEV/LKNCY/1211HK – Xpeng Unveils Next-Gen Technology Architecture

Deep Dive on Hong Kong Macroeconomics: The Hong Kong Dollar Peg and Its Significance on Hong Kong

HKD peg has been a financial cornerstone for HKSAR since 1983. The peg helps maintain financial stability, but it also ties Hong Kong’s monetary policy to the U.S. Federal Reserve.
HKMA maintains a narrow band of 7.75 – 7.85 HKD per USD. HKMA’s undertaking is to step in if the FX hits either strong or weak side of the band
While there are (continued) discussions if HK should change or break the peg, HKMA ex-chief Norman Chan mentioned there are “4 essential conditions” for such consideration to take place

OVERSEAS. Small Gains in Equities Industrials, Energy, Materials up on BTE China 1Q GDP Print; GS no so great as earnings miss; NVIDIA up on final Sell->Buy capitalation
JAPAN. NKY Futs flat vs Cash; USDJPY 134.1; BOJ may forecast 2% CPI in FY25; Tokyo Condo px hit new records; S&i to resist VALUEACT board change demands
NUGGET. BOJ to forecast 2% CPI in FY25. This is an interesting “leak” to the press. Clearly BOJ is in no rush to tighten monetary policy

XPEV: Xpeng unveils next – gen technology architecture ( + )
LKNCY: Hot weather supports new product sales, bodes well for 2Q23(+)
1211HK: Brazilian President Lula met with BYD CEO to promote opening of local EV plant (+)

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