The interest rate difference is the result of a reduction in the overall situation of Hong Kong after the slowdown next year
Towards the end of the year, a large line of forecasts came one after another, as the next pulse. The main reason is that in the past few years, the views are dull and dull. In the premise of no ups and downs and a generally steady direction, the noise is minute by minute than the signal, and the prediction is of little significance. This time? As we all know, spread forecasting is better than anybody (it is hard to tell whether it will lose to AI in the future). Since the interest rate spread narrows to “endangered”, it is worried that there is a reason. However, only 3 weeks ago said that “the spread is still a good indicator that the recession is disturbing”. Europe and the United States are not scared but should startle themselves rather than shock.
Can we use the interest rate difference to predict the economy in Hong Kong? Under the joint exchange, the difference between the length of interest rates in Hong Kong and the United States is the difference between the length of the United States, at least since the end of 1983. As can be seen from the diagram, the relationship between the two is indeed strengthened after being linked. The time difference is 10 seasons (or shorter), that is, the difference in interest rates can predict the economy of Hong Kong as far as two and a half years later [Figure 1]. As expected, there is a risk of recession in Hong Kong, but it looks like there will be more in 2019 than next year. However, the decline, the situation seems more like the two GDP contraction in the 1980s, is mild.
In the next two years, the economic test (Figure 1 shows the growth slowing down to zero gradually), what about the stock market? Calculations show that Hong Kong stocks lead Hong Kong’s economy only for one season. In other words, interest rates should be ahead of Hong Kong stocks. Judging from the above economic slowdown, it is not hard to infer the prospects of the former according to the relationship between the stock market and the economy. As can be seen from the figure, when economic growth points to zero in the coming years, the HSI may point to a 20% decrease on the previous year. However, the HSI may slow down only by the year-on-year rate on the next year.
The same token, the stock market is measurable, property prices can also be measured, but the premise is related to the economy. As we can see from the diagram, property prices are not as dislocated as economic ones. At least the cycle of growth and decline is still high and synchronized. This means that when economic growth slows down as indicated in Figure 1, property prices will inevitably slow down simultaneously. Of course, property prices have dropped by 10% to 20% respectively from the early round. It is likely that the fastest year-to-year contraction will be in the second half of the year.
Property prices slowed down simultaneously
Does the economy have such a magical ability to measure stocks, the property market? As far as the stock market is concerned, we can see from Figure 2 that in addition to extreme greed and panic, in the past 30 years, apart from the first four years of the financial tsunami and the year after the tsunami, the rest of the stock markets are very economical. As for the property market, we can see that the property market underperformed the economy a few years before the tsunami (the blue line was lower than the red line), whereas in the early years the opposite was true. The relationship was not as good as the stock market and the economy. Therefore, the economic building should be able to trend in the trend, but the ups and downs may not be accurate.
In the premise of growth in property prices will be back, we can further predict inflation. In the United States, inflation depends very much on the property market, accounting for 40% of the total. However, in fact, the impact of property prices on inflation is very clear – as we can see, after 1997, property prices fluctuate in a 7-1 ratio, And the leading 3 season [Figure 4]. Since the rise and fall of property prices fluctuated from rising to falling, inflation will fall slightly after a slight rise next year as property prices and price rises and falls (Di Yu Di Qi) will eventually see deflation.
The three most significant variables in the macroeconomy talked about two, and the remaining one is, of course, employed. Unemployment rates have been rampant for many years and have never been seen before. It is estimated that under the “benefit from” global easing policy, the jobless rate will not drop for more than 6 years before the 3% rampancy. This is likely to result in full employment and the economy of Hong Kong is unnecessarily Overheated, which can be seen from the property market performance . The consequences of overheating are familiar, as long as the external impact reversal occurs at any time. According to Figure 3, the relationship between the economy and the property market has been inferred. Property prices fluctuated from 1 to 20% and the estimated unemployment rate had the opportunity to rise above 6%, higher than the peak of the financial tsunami. Please do not be surprised if the unemployment rate rises sharply, as the pattern of the jobless rate has always been skyrocketing but slumping.
From the interest rate differential, we speculate on the economic growth, price growth, stocks and property prices in Hong Kong. As mentioned earlier, property prices should not be overvalued, but the testability of the stock market volatility is higher. We would like to know if the “Hang Seng Index” of the HSI of the above is “indexed” by itself to the index itself. As can be seen, the Hang Seng Index is likely to still surpass the previous high of 32000 points (data are averaged quarter-on-quarter, so the average high of 30,000 points last season was not even reached in 2007) Thirty thousand points of the big frame line; Although the drop rate is already a bear market, but the pattern is still up and down, or can be said that the secular bear (secular bear). To graph theory, long bear as early as 10 years ago has begun.
Long Bears started more than 10 years ago
This article shows that in the coming year, the growth of Hong Kong’s economy and stock markets will be weaker. However, most of the year has not contracted at least for the first half of the year, only a slowdown in growth. This is a direct indication of a narrower interest rate gap. Believe it or not, just over 10 years ago, Benin did not believe it and the results were obvious to all. Anyway, the cycle of expansion has been ten years and eight years, and Mo speaks of a significant slowdown, not surprisingly, even if the recession is over. It is not certain that pediatrics will not be reversed without the “funeral” between Europe and the United States. In 1997, this was a counterexample.
In fact, the situation in Hong Kong is not unique. In fact, the entire Asia Pacific and emerging markets have in the past few years benefited from the easing policy of Europe and the United States and unnecessarily overheated. There will be a bubble overheating, there will be a bubble burst sooner or later, these waves we have seen many times.