Hong Kong’s Loss of Autonomy Is a Sideshow for Financial Markets
- MSCI Hong Kong near overbought levels after eight-day gain
- Local dollar little changed, no rush to hedge with derivatives
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For investors, Hong Kong’s fading autonomy is becoming irrelevant.
The same day that pan-democratic legislators announced they would quit en masse in protest against new rules allowing disloyal lawmakers to be disqualified, the MSCI Hong Kong Index jumped to an almost nine-month high and the city’s currency was little moved. Unlike in May, traders aren’t betting on depreciation -- liquidity is so ample in the foreign-exchange market that Hong Kong dollar one-year forward points actually turned negative.