Investment Insights

CIO Viewpoints

Why Emerging Market Bonds Outperform Developed Markets?

Daily Insights

Focus of the Day

  • Softer US inflation cools rate-hike odds

Other Commentaries

  • US financials beat quarterly earnings expectations; South Korea lifts 2026 GDP growth forecast to 3%; China Q2 smartphone shipments fall 4.3% y/y

Market Analysis

FX Markets Analysis

Latest Technical Highlights

CNH - Uptrend↗

Support / Resistance

vs HKD 1.1441 / 1.1611

vs USD 6.75 / 6.85

Mainland China’s June trade data, released Tuesday (14th), showed a US$125.6bn surplus, beating expectations and marking the strongest outcome in four months. Strong exports should help sustain RMB strength. Attention now turns to Wednesday’s (15th) second-quarter GDP release

 

Legends

Uptrend ↗  Sideways →  Downtrend ↘

*Pertaining to historical technical trend analysis only and do not reflect any forecasts or any forward looking views

Provided by Hang Seng Investment Services Limited

Stock Markets View

  • The pullback in oil prices has helped risk appetite recover, driving a rebound in the Philadelphia Semiconductor Index after its early-July correction. That said, investors are watching whether earnings can justify current valuations, with June CPI in focus.
  • Renewed tensions between the US and Iran have lifted oil off its lows, adding uncertainty to Europe’s inflation outlook. European equities have retraced after hitting fresh highs and may need a period of consolidation near term.
  • Performance in Asia’s semiconductor sector remains choppy, while flows have rotated towards lower-valuation China tech names. Markets are also assessing how the US–Iran situation could affect Asia’s macro outlook and regional equity fund flows.
  • US–Iran tensions have re-escalated, reviving concerns over shipping through the Strait of Hormuz and energy supply. This could weigh on sentiment and influence global allocations to emerging markets.
  • The Hang Seng Index has reclaimed the 24,000 level, supported by a rebound in China internet/platform names and old-economy sectors, alongside improving Southbound flows. Near-term resistance is seen at the 50-day moving average, around 25,200.
Legends

Positive - Expect that the particular asset class potentially may perform well relative to the relevant major global benchmark(s) in the long run
Neutral - Expect that the particular asset class potentially may perform in line relative to the relevant major global benchmark(s) in the long run
Cautious - Expect that the particular asset class potentially may not perform well or in line relative to the relevant major global benchmark(s) in the long run

Provided by Hang Seng Investment Services Limited

Bond Markets View

  • Fed minutes suggest some officials still see a case for rate hikes. If inflation re-accelerates, further policy tightening may be required.
  • As of 10 July, US long-end yields were volatile. US investment-grade credit returned -0.6% WoW, with spreads marginally wider by 2bp.
  • Asia USD bond supply remains subdued, providing technical support for bond prices.
  • US–Iran tensions have supported oil, but improved risk sentiment has kept market pricing of the escalation relatively contained. Near-term focus remains on oil and geopolitical developments.
  • Asia high-yield spreads edged tighter. Thailand’s H1 issuance fell 24%, suggesting financing conditions remain cautious. Defaults remain idiosyncratic, pointing to stable underlying credit fundamentals.
  • Overseas investors continue to buy India local-currency bonds via FAR. As of 10 July, the 10-year yield has fallen for six consecutive weeks. Potential inclusion in the Bloomberg Global Aggregate Index could sustain inflows.
Legends

Positive - Expect that the particular asset class potentially may perform well relative to the relevant major global benchmark(s) in the long run
Neutral - Expect that the particular asset class potentially may perform in line relative to the relevant major global benchmark(s) in the long run
Cautious - Expect that the particular asset class potentially may not perform well or in line relative to the relevant major global benchmark(s) in the long run

Provided by Hang Seng Investment Services Limited

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