HONG KONG WEEKLY LIQUIDITY MONITOR:Upbeat signs yet more easing expected

Summary of global fund flows.

    From 28 May to 3 June, Chinese equity funds1 recorded inflows for the third consecutive week, at US$2.0b (with 93.4% to ETF funds). Flows into Hong Kong equity funds also accelerated to US$433m, versus US$91m the week before.

    Fund inflows to Developed Market equities surged to US$4.5b on the return of inflows to US equity funds. The latter saw inflows of US$1.04b, versus outflows of US$2.76b on average during the past four weeks. Meanwhile, flows into US bond funds also soared. Earlier this week, the IMF downgraded its US GDP forecast for 2015 by 60bp to 2.5%, citing its concern over “the future resilience of economic growth”. The IMF also announced that it expects no Fed rate hike until the first half of 2016.