Currency Short-TermStarplan Bond and foreign exchange market dynamics

1. Hong Kong bond market

10-year government bond tender

Scale: HK$2 billion (approximately US$256 million)

Interest rate: 3.17% (up 5 basis points from the last issuance)

Purpose: Mainly supports local infrastructure and green energy projects in Hong Kong, reflecting the government's stable long-term financing needs.

Exchange Fund Bill Tender Results (Yesterday)

3-month bills: average interest rate 0.99% (stable market demand, reflecting ample short-term liquidity)

6-month bills: average interest rate 1.79% (up 12 basis points from the previous month, indicating that the market's expectations for medium-term interest rates have slightly increased)

2. RMB exchange rate trend

Performance in the first half of the year: The RMB appreciated by 1.9% against the US dollar, mainly supported by the expansion of China's trade surplus and the continued inflow of foreign capital into the A-share market.

Recent stabilizing factors:

The People's Bank of China (PBOC) maintains reasonable liquidity through tools such as reverse repurchase.

The US dollar index (DXY) has recently fluctuated around 104, and the RMB exchange rate has become more flexible and has not fluctuated significantly.

3. Focus of global foreign exchange market

Federal Reserve policy expectations: The market is still betting on a 25 basis point rate cut in September, and the US dollar is under short-term pressure.

EUR/JPY fluctuations: The European Central Bank (ECB) may further ease, while the Bank of Japan (BOJ) maintains its YCC adjustment expectations, causing EUR/JPY to fall below 165.