Investment Insights

CIO Viewpoints

Higher Treasury Yields Call for a More Diversified Bond Allocation

Daily Insights

Focus of the Day

  • Hang Seng Tech steadies above 100-day moving average

Other Commentaries

  • Singapore raises 2026 GDP forecast; Aussie dollar holds key support after rate decision; US July existing home sales fall to three-month low

Market Analysis

FX Markets Analysis

Latest Technical Highlights

AUD - Sideways➡

Support / Resistance

vs HKD 5.4137 / 5.5707

vs USD 0.69 / 0.71

The Reserve Bank of Australia unanimously kept the cash rate unchanged at 4.35% on Tuesday (11th), extending its pause for a second meeting. It expects unemployment to rise gradually and inflation to remain elevated for some time, while retaining the option of further tightening; the Australian dollar remained steady

 

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

  • July nonfarm payrolls data helped temper expectations for further rate hikes, driving technology and consumer discretionary sectors and pushing US equities to fresh record highs. Markets will continue to watch whether AI-related earnings can sustainably underpin elevated valuations. 
  • Hopes that the US and Iran may ultimately reach an agreement have weighed on oil prices, helping the STOXX 600 recently notch new highs. Economic data and corporate earnings are expected to remain key market catalysts.
  • Asian equity markets diverged in early August, with some markets still influenced by moves in mega-cap technology names. Overall, diversifying across multiple markets and sectors within the region may help mitigate risk.
  • US–Iran tensions remain uncertain. Near-term concerns around energy supply and expectations for US interest rates are likely to remain key drivers of risk appetite and capital flows into emerging markets.
  • Hang Seng Index is consolidating around the 26,000 level. China internet platform names are going to release quarterly results, with AI-related revenue momentum and investment spend in focus. 
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

  • Signs of softening in the US labour market have reduced rate-hike expectations, pulling US Treasury yields lower, though the decline has been more modest at the long end. 
  • As of 7 August, long-end US Treasury yields fell, helping US investment-grade credit rebound 0.66% WoW. Spreads tightened marginally by 1bp.
  • The Reserve Bank of India’s neutral stance has increased market conviction that policy rates will remain on hold for the rest of the year. India recorded net inflows in July, led mainly by bonds. 
  • US high yield bond stabilized, with falling oil prices supporting risk sentiment. Issuance rose 28% YoY, but spreads remain tight; monitor Fed policy and potential risks from AI-related funding supply.
  • Asia high yield continued to perform well, with spreads tightening by around 9bp in early August. Record-low yields on the Ministry of Finance’s offshore RMB government bond issuance have supported broader regional sentiment.
  • Central Bank of Brazil delivered its fourth consecutive rate cut, while maintaining a cautious tone. Elevated real rates continue to support the attractiveness of local-currency debt. 
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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