Investment Insights

CIO Viewpoints

HSI likely to test new highs? And the drivers behind China Banks?

Daily Insights

Focus of the Day
  • US May nonfarm payrolls exceeded expectations, but more time is needed to assess the labour market

Other Commentaries

  • China and US will hold trade talks in London this week; China-EU made progress in electric vehicle price commitment talks; Reserve Bank of India rate cut exceeded forecasts

Market Analysis

FX Markets Analysis

Latest Technical Highlights

JPY - Uptrend ↗

Support / Resistance

vs HKD 5.3020 / 5.5260

vs USD 142.00 / 148.00

The U.S. Treasury Department's foreign exchange rate report said that the Bank of Japan should continue to tighten monetary policy, which will help the weak yen and normalize bilateral trade between the United States and Japan. The report adds pressure on the Bank of Japan to raise interest rates and appreciate the yen in the future. Technically, the USD/JPY has a support at 142.

Legends

Uptrend ↗  Sideways →  Downtrend ↘

Pertaining to historical trend technical analysis only and do not reflect any forecasts.

Provided by Hang Seng Investment Services Limited

Stock Markets View

The decline in a leading EV stock temporarily weighed on US equity indices. However, the latest employment data eased concerns about an economic slowdown. Markets are closely watching Sino-US trade negotiations

  • The ECB cut interest rates again but signaled the rate-cutting cycle may be nearing its end. Declines in German and French industrial production highlight risks of an economic slowdown in the region
  • Central bank policies across Asia remain divergent. China and India have adopted accommodative monetary policies, while Japan, in a tightening cycle, relies on corporate reforms and earnings improvements for support
  • Despite solid year-to-date performance in LatAm equities and currencies, uncertainties around tariffs and their impact on global growth and commodity demand present downside risks to equity markets
  • China’s May CPI slightly exceeded expectations. Following a June 5 call between US and Chinese leaders, trade negotiations between representatives from both nations began. These developments support the Hang Seng Index as it tests resistance at 24,700
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

  • Stronger-than-expected US nonfarm payroll growth has tempered rate cut expectations. The market now turns its attention to the US inflation data release on June 11, with US Treasury yields expected to remain range-bound
  • The European Central Bank delivered a rate cut as anticipated, while progress in US-EU trade negotiations has eased market concerns. Eurozone corporate bond spreads are poised to tighten further
  • Optimism surrounding Sino-US trade negotiations further drove weekly tightening of credit spreads in Asian investment-grade bonds
  • US high-yield bond issuance in the first week of June hit a 12-month high, underscoring strong demand for high-yield credit. However, current valuations appear stretched
  • The Asian high-yield market remains in consolidation. Macau’s gaming revenue reached a post-pandemic high, benefiting related corporate bonds, while a stabilization in China’s property market supports Chinese property bonds
  • Emerging market bonds remain stable. The Reserve Bank of India delivered a significant 50-basis-point rate cut, supporting local government bonds. However, the evolving global trade environment warrants close monitoring for potential economic impacts
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

Featured Videos

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Latest Market Focus

Navigating the Uncertainties

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