It's unclear when the Fed will stop raising interest rates. Even if the rate hike comes to an end, Hong Kong's stock market may not rebound immediately.

If the job data is stronger than expected, people will expect a longer rising trend in interest rate.

The peak of the interest rate cycle may be much higher than expected. Continued inflation in the US indicated a need for a rate hike for few more times until next year.

If the rate expectations continue to come down, Hong Kong, as an interest rate sensitive market will likely benefit. Moreover, if the interest rate expectations drop, the U.S, growth expectations will also taper off. This will also encourage money to flow from the growth sensitive markets, notably Korea and Taiwan. Hong Kong will be an idea destination.

It appears that U.S. inflation and interest rates are becoming once again the center of attention.

Trading is cautious ahead of the US jobs data. It should give us an idea about the interest rate trends in the coming months.