Investment Insights

CIO Viewpoints

Has the Semiconductor Trade Become Too Crowded?

Daily Insights

Focus of the Day

  • China A-shares see rotation into traditional sectors

Other Commentaries

  • Hong Kong launches trial run of gold central clearing system; ECB stays hawkish, July pause increasingly in focus; China NDRC flags AI models and compute as 15th Five-Year plan priorities

Market Analysis

FX Markets Analysis

Latest Technical Highlights

GBP - Uptrend↗

Support / Resistance

vs HKD 10.1946 / 10.5083

vs USD 1.30 / 1.34

UK markets were buoyed by prime ministerial frontrunner Andy Burnham’s commitment to fiscal rules, boosting confidence in the country. The Office for Budget Responsibility said on Tuesday (7th) debt must not rise from current levels. Investors are monitoring the next Chancellor appointment for sterling implications

 

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 jobs data eases rate-hike fears, driving rotation from mega-cap tech into cyclicals/old economy sectors. AI supply-chain valuation repricing continues; watch sector rotation and corporate earnings
  • Eurozone inflation falls more than expected; alongside softer oil, this materially reduces concerns over further ECB hikes and could support European equities
  • Asian tech tracks the global tech pullback, weighing on some regional markets. However, weaker US jobs data pressures the dollar, potentially accelerating fund flows back into Asia
  • Uncertainty around US–Iran talks, an unclear Fed stance and a choppy dollar index may sway risk sentiment and global EM allocations

     

 

  • AI hardware names correct; funds rotate into cheaper-valued China internet/tech names. China’s Commerce Ministry says China and the US broadly agree to cut agricultural tariffs, which could lift 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

  • US non-farm payrolls undershoot sharply; with Fed Chair Warsh noting lower near-term inflation risks, markets scale back expectations for further US rate hikes this year
  • As of 3 July, US long-end yields are volatile; US IG corporates fall 0.49% on the week, while spreads tighten slightly by 1bp
  • Asia USD bond issuance remains low overall, providing technical support for bond prices
  • AI valuation concerns and rate-hike expectations briefly widen spreads, but softer oil and easing inflation improve sentiment; flows favour secured and higher-quality paper
  • June declines in second-hand home prices across 100 mainland cities deepen, and Fitch cuts new-home sales forecasts; with demand and confidence recovering slowly, China property remains under pressure near term
  • EMs continue to attract inflows, led by Asia; June flows into India and other Asian EM debt hit a two-year high—watch the dollar and oil as key follow-through drivers
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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