WITH the transition to the Year of the Dog completed, a return to normality means a return to the hard economics that will define conditions in the world economy, and by extension, Hong Kong.
Friday's announcement of a 0.2 per cent rise in the United States Producer Price Index was enough to knock back Hong Kong share prices in London, but more importantly the figures confirm the trend of inflation on a rising track in the US.
The corollary of US prices on the up is that interest rates will surely follow and therein lies the biggest threat to Hong Kong's fragile asset values, aside from uncertainty across the border.
The rises come at a time when international funds are taking a second look at the value on offer in the emerging markets of the region and will undoubtedly have an impact in drawing them back to other destinations.
Predicting the Hang Seng Index has long been abandoned by this column but the warning signals should be noted as the new year gets underway.
The run-up, which saw the Hang Seng rise more than 100 per cent during the Year of the Rooster, received its impetus from the enthusiasm of foreign investors for Hong Kong and the region.
Huge flows of portfolio funds were thrown at the territory as part of a thematic enthusiasm for the East Asian growth story.