Dealers in Hong Kong have been abuzz about massive Hong Kong dollar interest rate trades recently put on by banking giant HSBC that have boosted liquidity in the local market. John Ryan, spokesman at HSBC, declined all comment.
"This is huge," said one trading head at a bulge bracket house. Traders said more than HKD20 billion (USD2.56 billion) in short-term interest rate positions have been snapped up by HSBC in recent days. "Every day I keep receiving from them," said a senior trader, noting that HSBC has been active in 18-month swaps, paying floating and receiving fixed. Market participants speculated the positions may be for customers or hedging the bank's own floating-rate deposits.
