The property rebound adds some spring in Hong Kong's steps. Both housing prices and rents have stopped falling and rebounded over the past few quarters; credit demand has also picked up at the margin, and both of these trends highlight the end of Hong Kong's long six-year deleveraging "bust".

The rest of the economy is still weak, however. Retail consumption is flat, the tourist economy remains depressed, the resident population has stopped growing and construction is set to decline for a good while to come. And the supposed benefits of renminbi internationalization are nowhere to be seen.

We have no worries about the peg. The HKMA is maintaining strict monetary discipline, and despite the worsening in budgetary conditions this has not led to fiscal monetization pressures.

What to do with equities? Listed earnings are rising again on trend and the equity market has recovered, but with ongoing macro malaise at home it's difficult to generate a sense of excitement.