Investment Insights

CIO Viewpoints

 Why China A-shares can offer both growth and defense amid market volatility?

Daily Insights

Focus of the Day

  • JPY/HKD faces key resistance at 4.95

Other Commentaries

  • Nearly half of central banks plan to boost gold reserves; China’s May economic data offer few positive surprises; RBA pauses rate hikes for the first time this year

Market Analysis

FX Markets Analysis

Latest Technical Highlights

JPY - Uptrend↗

Support / Resistance

vs HKD 4.8346 / 4.9570

vs USD 158.00 / 162.00

On Tuesday (16th), the Bank of Japan raised its policy rate by 25 basis points to 1%, the highest level in 31 years, in line with market expectations. However, investors viewed the post-meeting statement as relatively dovish, implying a slower tightening path and limiting near-term yen gains

 

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

  • Expectations of a US–Iran agreement have eased oil prices and tempered US rate-hike expectations. The AI investment theme continues to gain momentum, with semiconductor sector rebounding strongly ahead of the upcoming Federal Reserve meeting
  • European inflation data remains elevated and GDP growth forecasts have been revised down. Markets are closely watching the impact on the economy and equities following the European Central Bank’s first rate hike since 2023
  • The global AI investment theme continues to support Asian equities. In addition, a US–Iran agreement leads to lower oil prices, this could reduce costs for Asia’s export-oriented manufacturing sector, supporting economic activity and corporate earnings
  • The US and Iran have announced an agreement is expected to be signed. A softer US dollar and reduced US tightening concerns may improve global risk appetite and drive flows back into emerging markets
  • Easing Middle East tensions, lower oil prices, and a continued rise in China’s PPI could accelerate industrial profit growth and provide support for Hong Kong equities
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

  • Market optimism around the US–Iran agreement has lowered oil prices and inflation expectations, delaying anticipated US rate hike and pulling US Treasury yields lower
  • As of 12 June, softer Treasury yields supported US investment-grade credit, up 0.55% week-on-week, with spreads tightening by 1bp
  • China’s new RMB lending in May exceeded expectations. Further monetary easing measures are still expected this year, which should help improve market liquidity
  • Sector performance has been influenced by firmer inflation and geopolitical shifts but rebounded on positive news related to the US–Iran agreement. However, valuations remain relatively stretched, and further developments could drive volatility
  • China’s corporate financing remains resilient, but household demand is still weak. China-related property and materials sectors are under pressure, while Asian high-yield credit is mixed; overall sentiment remains cautious
  • Indonesia’s surprise rate hike and increase in fuel prices signal a policy shift towards supporting the currency and fiscal stability. Bond-market demand has improved modestly, though assets remain sensitive to external conditions and policy credibility
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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