Quantitative easing (QE) refers to large-scale asset purchases by the US Federal Reserve to inject liquidity in the world’s biggest economy after the onset of the global financial crisis in late 2008. In September 2012, stubbornly high US unemployment and faltering economic growth prompted it to launch the third phase of this stimulus (QE3), under which it planned to buy US$40 billion worth of bonds per month, with no set end date. As of late 2012, it had bought some US$2.3 trillion in long-term securities. In December 2012 it announced it was increasing its QE3 purchases to US$85 billion a month.

Xi Jinping's security commission to also tackle financial industry

Chinese President Xi Jinping

Beijing will create a ministerial-level division dedicated to financial industry security within the new National Security Commission to be chaired by President Xi Jinping.

Tuesday, 28 January, 2014, 8:57am 1 comment

Time to taper? Not if you look at bank loans

Roughly two-thirds of the money the Fed pumped into the banking system to ease a credit crunch has never been lent out, but stayed with the banks. Photo: AFP

The US Federal Reserve decided to hold off on scaling back its bond-buying program on Wednesday, and at least one reason for its choice may have been a stubbornly weak economic indicator: bank lending.

19 Sep 2013 - 10:51am

Fed surprises markets, sticking with stimulus as growth outlook falls

Chairman of US Federal Reserve Ben Bernanke.

The US Federal Reserve said it would continue buying bonds at a US$85 billion monthly pace for now, surprising financial markets that were braced for a reduction in the central bank's economic stimulus.

19 Sep 2013 - 10:51am 1 comment

Quantitative easing does little to boost gold prices

Mint flavoured

Gold is at a strange juncture. In sharp contrast to the previous two rounds of quantitative easing by the US Federal Reserve, gold prices are trending down, not up (see graph).

Quantitative easing is inflationary. Gold offers protection on inflation. Investors should be buying gold now to guard against QE3-fuelled inflation, but this is not the case.

28 Jan 2013 - 4:39am

Anticipation of bigger US Fed bond buys drives Hong Kong stocks up

Federal Reserve chairman Ben Bernanke. Photo: AFP

Hong Kong stocks rose to a 16-month high on speculation the US central bank may decide to more than double the size of its monthly bond purchases, which could draw more hot money into the city's equity market.

The Hang Seng Index added 179.41 points, or 0.8 per cent, to finish at 22,503.35 yesterday, the highest since August last year.

13 Dec 2012 - 4:49am

Strong yuan and exports pull in more capital

The yuan exchange rate closed at a record of 6.2252 against the US dollar on Wednesday.

There were net capital inflows to the mainland for a second month in October. But it is unlikely to be sustained owing to global uncertainty and the yuan's stabilising exchange rate, analysts said.

17 Nov 2012 - 4:23am

European asset managers Natixis and Amundi make push into Hong Kong

Asset management firms believe a lot of money will flow into Hong Kong following QE3. Photo: Robert Ng

Global asset managers Natixis and Amundi, two of the world's top 15 fund houses by assets, are set to expand in Hong Kong, hiring more professionals as more hot money flows into the city.

9 Nov 2012 - 3:59am

Li Keqiang's inflation tightrope

Inflation on the mainland is tipped to hit 3.4 per cent in the third quarter of next year, a major concern for the public. Photo: AFP

Inflation concerns have prompted swap traders to scrap bets Li Keqiang will ease monetary policy after he is appointed as the next premier at a Communist Party congress starting today.

8 May 2015 - 9:46am

Chinese yuan trades strongly in lead-up to US election and 18th congress

An artist uses 100-yuan notes to build a model. The currency was trading strongly yesterday. Photo: AFP

The yuan traded at the strong end of its permitted trading band yesterday ahead of the Communist Party's 18th congress and the US presidential election, but analysts said the currency's strength was not sustainable.

8 May 2015 - 9:46am

Stock investors buoyant despite small bounce from QE3

Investors have pushed the Hang Seng Index to a 15-month high, after the United States announced a new round of quantitative easing in September. Photo: Bloomberg

The Hong Kong government may be increasingly worried about hot money pouring into the city, but stock market participants are playing it cool.

The reason could be that they have not seen much of that hot money flowing into the stock market yet, unlike the inflows that followed previous rounds of US monetary policy loosening known as quantitative easing.

6 Nov 2012 - 3:36pm

Hot money inflow expected to continue, analysts say

The Hong Kong dollar sits high against the US dollar. Photo: AFP

An influx of hot money into Hong Kong chasing the rising yuan has forced the city's financial chiefs to exchange HK$32.24 billion worth of local currency for US dollars in the past two weeks as they try to stop the Hong Kong dollar from spilling over its official limit of HK$7.75 against the greenback.

3 Nov 2012 - 3:22am

Stronger yuan to bring Hong Kong higher food prices

Illustration: Henry Wong

Get ready for rising food and petrol prices, and the number of mainland tourists, as the effects of the yuan hitting a 19-year high spills over into Hong Kong.

8 May 2015 - 9:46am

Yuan hits new intraday high against US dollar

The spot rate for the yuan advanced to a new 19-year-high in intraday trading yesterday, but analysts said a significant appreciation was unlikely in the near future.

26 Oct 2012 - 2:50am

Net money inflow takes heat off China's central bank

The spot rate has hit historic highs against the greenback. Photo: AP

The surge of foreign exchange into the mainland last month is expected to ease pressure for monetary loosening in the near term.

But the influx is unlikely to persist, given the gloomy trade outlook and lack of appreciation in the yuan, analysts say.

24 Oct 2012 - 4:07am

Hong Kong second-hand flat prices rose 3pc in the month since QE3

An aerial view of Taikoo Shing, a prime residential area where many owners are reluctant to sell given the high price of buying another flat in the same estate. Photo: Robert Ng

Prices of second-hand homes in Hong Kong have risen by almost 3 per cent since the latest round of monetary easing in the United States on September 14, according to Centaline Property Agency.

However, sales volumes are down, partly because purchasing power shifted to the new housing market and buyers were becalmed by the government's short- and long-term measures to cool demand.

17 Oct 2012 - 2:36am