Investment Insights

CIO Viewpoints

Higher Treasury Yields Call for a More Diversified Bond Allocation

Daily Insights

Focus of the Day

  • CSI 300 tests 50- and 100-day moving averages

Other Commentaries

  • China regulator backs insurers investing in Hong Kong ETFs; UK labor market softens; wage and food inflation cool; China agencies roll out measures to boost county consumption

Market Analysis

FX Markets Analysis

Latest Technical Highlights

CAD - Sideways➡

Support / Resistance

vs HKD 5.6029 / 5.6841

vs USD 1.38 / 1.40

President Trump said the planned 50% tariff on Canadian goods has been delayed by three days, supporting a short-term CAD rebound as risk aversion eased. However, the order remains in place and sits outside USMCA exemptions. Trade tensions persist; monitor agreement details, as upside appears limited

 

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

  • Softer-than-expected CPI and PPI data eased near-term tightening concerns, helping the S&P 500 notch another record high. AI-related earnings remained robust, but elevated valuations are keeping investors focused on earnings delivery; a consumer slowdown also bears watching. 
  • Recent European macro releases and corporate earnings have been broadly resilient, with investor sentiment continuing to improve. That said, persistent Middle East uncertainty could cap upside for European equities.
  • Asia’s manufacturing scale and supply-chain advantages have supported recent earnings upgrades in energy security and industrials. A diversified approach across regional markets and sectors should help keep performance relatively steadier.
  • The US Dollar Index has retreated recently, but unresolved US–Iran tensions continue to weigh on emerging-market risk appetite. Combined with softer price action in Brazil and Mexico, overall performance remains under pressure.
  • China internet names pulled back post-results, while the Hang Seng Index briefly corrected to its 100-day moving average before rebounding. Markets are awaiting further catalysts; near-term technical support and resistance are seen at 24,500 and 26,400, respectively.
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

  • US inflation data came in line with expectations, easing concerns about a near-term Fed rate hike. Rates futures imply the probability of a September hike has fallen to below 40%.
  • As of 14 Aug, the pullback in long-end US Treasury yields supported US investment-grade credit, with the asset class up 2.8% WoW. Spreads widened modestly by 2bps.
  • Malaysia’s 2Q GDP grew 6% YoY, beating expectations. Together with the central bank’s decision to keep the rate unchanged at 2.75% in July, this points to stable growth and inflation dynamics. 
  • With US inflation in line with expectations, US and European high-yield yields fell by around 6bps into mid-August. However, oil price uncertainty and geopolitical risks could keep markets volatile.
  • China’s July credit data were soft and aggregate financing growth was flat, signalling still-weak demand. That said, the PBoC reiterated a moderately accommodative stance, and CNY strength has helped support regional high yield.
  • Indonesia is set to appoint the central bank deputy governor as the next governor, which should help ease policy uncertainty following the previous governor’s resignation. A softer USD also supports the rupiah and local bond market. 
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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