USDHKD is a proxy for monetary "stuff" going on in China. China can stimulate when this peg is not being hit as most of their dollar funding seems to be running through Hong Kong. When the peg gets hit however, we see noticeable problems and effects around the world. We are now about to see the peg get re-hit once again, which will likely kick off another wave of unexpected monetary issues around the world similar to what we saw last April.
We will likely see more emerging market underperformance once again relative to US equities if this is in fact indicative of what is going on in the shadows.
We will likely see more emerging market underperformance once again relative to US equities if this is in fact indicative of what is going on in the shadows.