Hong Kong dollar traders are bracing for a crisis, pricing in an unprecedented squeeze in liquidity, with a gauge tracking the demand for cash jumping to the highest level on record. On Friday, HKD 3- 12-month forward points surged above 200 and 785, respectively, the latter soaring by a record 300bps, showing that the supply of cash in the foreign-exchange market is expected to collapse. Of note, forward points have spiked above all time highs, surpassing levels seen during the financial crisis. {image} The move was sparked by the widely reported news overnight that China is now set to establish a set of laws ... (full story)