Here's what's been defining Hong Kong's monetary condition in the last 7 years

2 major factors have been seen.

It has been noted that although it remains to be seen if the Fed will start to normalize interest rates in September 2015 as per UBS' US economic view, the passive tightening of monetary conditions in Hong Kong has already been underway since 2H2014.

According to a research note from UBS, negative real interest rates and weak HKD were the key trends defining Hong Kong's super accommodative monetary conditions the last 6-7 years.

However, as the underlying inflation eases, real interest rates are becoming less negative; and as the USD appreciates, the HKD is strengthening relative to its key trading partners.

Here's more from UBS:

While the April's episode of funds flows into HKD assets suggest that Hong Kong may still be susceptible to periodic bout of inflow pressures, which could be driven by a sudden surge in optimism on China or the domestic equity market, it is important not to lose sight of the fact that some of the key favourable monetary trends have already reversed course.

There has been periodic bout of inflows into Hong Kong since late 2012. The latest happened in April
15 when inflows were spurred by expectations for rising Chinese liquidity into HK on the stockconnect schemes and thus optimism on the local equity market.

However, if history is a guide, the last two episodes of inflows are both short-lived, lasting 2 quarters. And when the HKMA started to intervene, it typically happened toward the tail-end of the liquidity upturn.