Forex News Stanchart expects HKD rates to consolidate today, without much direction from USD rates market; notes Monday's gain in EFN yields, IRS rates, by 12-14bps across 2-10-year sector yesterday, as short-term money squeezed by upcoming IPO, higher U.S. Treasury yields. Says, stronger-than-expected CPI inflation (6.1% in June vs 5.8% consensus) not expected to have any material impact on HKD rates market. Longer term, overall flush liquidity situation would drive IRS rates down, leading to some narrowing of bond/swap spreads.
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