Investment Insights

CIO Viewpoints

Surging oil prices kept market stay risk averse

Daily Insights

Focus of the Day

  • Hang Seng Tech Index broke recent downtrend, improving short-term technical outlook

Other Commentaries

  • China’s Jan-Feb economic data showed improvement; Trump planned to delay China visit by a month; Oil prices pull back after surging >17% in 3 days

Market Analysis

FX Markets Analysis

Latest Technical Highlights

AUD - Uptrend↗

Support / Resistance

vs HKD 5.3958 / 5.7086

vs USD 0.69 / 0.73

The Reserve Bank of Australia’s recent hawkish tone points to a potential rate rise to tackle inflation. Rate futures imply an 80% chance of a 25bp increase to 4.1% at Tuesday’s (17th) meeting, which could widen rate differentials and support a stronger Australian dollar

 

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

  • Heightened geopolitical tensions in the Middle East have lifted oil prices and weighed on market sentiment, with US equities declining for three consecutive weeks. As rate cut expectations moderate, defensive sectors are seeing rotational inflows. Market focus now shifts to the upcoming FOMC meeting
  • Multiple ECB officials have emphasized the need to assess the economic impact of geopolitical developments before considering rate cuts. Beyond tensions in the Middle East, central bank policy remains a key variable for the outlook on European equity markets
  • Asia’s long-term fundamentals remain solid, though near-term risk aversion has led to elevated volatility in Japan and Korea, which had seen sharp gains. By contrast, Chinese A-shares and Hong Kong stocks have shown relative resilience
  • Escalating Middle East tensions, coupled with a stronger USD amid rising oil prices and heightened global inflation expectations, could weigh on emerging market equities. Volatility in regional currencies and equity markets—particularly within the Middle East—is likely to persist
  • The timeline of US President Trump’s visit to China will be a key near-term focus for Hong Kong and A-share markets. Additionally, upcoming quarterly earnings from major tech names will likely influence sector performance going forward
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

  • Inflation concerns stemming from the Middle East conflict continued to support US Treasury yields. However, should oil prices remain elevated, long-end yields may reverse lower on growth concerns
  • Long-end US Treasury yields extended their upward move, sending US investment-grade down 1.44% WoW. Spreads widened by nearly 10bp over the same period
  • Chinese banks plan to prioritize tech financing for new loans this year, with increased credit allocation to AI and biotech. Related issuers stand to benefit
  • Rising oil prices have lifted inflation expectations, widening US high-yield spreads last week. New issuance remained muted, though credit fundamentals stay stable
  • A Reuters poll suggested China's property sector remained in restructuring phase, with inventory and demand still soft. However, Chinese property's weighting in Asia high-yield has declined from its peak, resulting in a more diversified market structure
  • Middle East conflict has pushed oil prices higher, slightly widening spreads in the segment. That said, an Indian bank's planned infrastructure bond issue drawing institutional demand points to resilient regional funding conditions and fundamentals
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

Financial Breakfast

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Belle Liang & Mark Wan

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