Hong Kong retail sales likely rebounded in March

Hong Kong will announce March retail sales data on 5 May. Retail sales is expected to have risen 9.0% y/y by volume and 6.0% by value, a clear drop from February, when they were boosted by holiday distortions. 

That said, the forecasts are still materially higher than the levels in January and Q4-2014 thanks in part to an improving base effect. 

While the continued shift in the spending behaviour of mainland tourists should remain a drag for the rest of the year, the still-tight labour market and improved sentiment towards the stock market is expected to offer much-needed support. 

"We believe the recent rebound in capital inflows and the resulting expansion in Hong Kong's monetary base will ease concerns about the Fed rate hike", says Standard Chartered.