Barry Ritholtz… Why are rates so low?… Look at Hong Kong

Barry Ritholtz has a post showing that rates are very low in many countries.

He isn’t quite sure what is going on with such low yields on 10-year bonds, so he asks…

“What is up with Yields?”

Maybe we could say that there is lots of liquidity out there. Maybe we could say that there are expectations of very low inflation, since we see little inflation hedging in low rates.

Yet if you look closer, you will see that Hong Kong is rising, while most of the rest are falling. I wrote just 2 days ago that we need to keep our eyes on China at the moment. There are hints that the rich are pulling their money out of China and escaping to other parts of the world. Consumption of luxury goods has fallen recently in Hong Kong.

The yields of the other two countries on the list from Asia are rising too… Japan and Singapore.

The rising yield in Hong Kong could mean that money is fleeing from China as we speak. We need to be attentive to data about China at the moment.