Investment Insights

CIO Viewpoints

Fed resumes cuts, which sector may benefit more?

Daily Insights

Focus of the Day
  • Hang Seng Index rose above 27,000 points

Other Commentaries

  • Trump might cut thousands of federal workers; India's Goods and Services Tax increased in September; Bank of Japan Deputy Governor hinted Japan could raise interest rates

Market Analysis

FX Markets Analysis

Latest Technical Highlights

AUD - Uptrend↗

Support / Resistance

vs HKD 4.9792 / 5.2904

vs USD 0.64 / 0.68

The Reserve Bank of Australia announced that it would maintain its benchmark interest rate at 3.6%, in line with market expectations. Interest rate futures prices indicate that the market expects the RBA's fourth rate cut to be delayed from December this year to February next year. The key technical resistance level for the AUD/USD pair is 68 US cents

 

Legends

Uptrend ↗  Sideways →  Downtrend ↘

Pertaining to historical trend technical analysis only and do not reflect any forecasts.

Provided by Hang Seng Investment Services Limited

Stock Markets View

  • Market sentiment remains supportive of AI infrastructure partnerships and investment announcements. However, elevated valuations and shifting expectations around rate cuts have prompted a pullback. Attention is now on the September non-farm payrolls data and potential government shutdown risks
  • Recent PMI data point to a mixed economic outlook in Europe. With the ECB expected to pause on rate cuts, regional equities currently lack a clear near-term catalyst and may continue to consolidate
  • Asian markets have seen near-term profit-taking amid a rebound in the USD. Nonetheless, the region's diverse investment themes and a steadily improving economic backdrop are expected to support medium- to long-term trends
  • A persistently weaker USD over the longer term could sustain global capital flows into emerging markets. Markets are also monitoring potential shifts in trade dynamics between certain emerging economies and the US
  • The HSI has recently corrected, with the 50-day moving average expected to serve as near-term support. Ongoing mainland capital inflows, rapid AI development, and regulatory efforts to curb disorderly competition are likely to underpin the Hong Kong 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

Bond Markets View

  • US inflation is in line with expectations, leading to stabilized Treasury yields. Market attention is now focused on the upcoming September non-farm payrolls report, which could significantly influence the Fed’s rate cut trajectory
  • Despite the latest US inflation data meeting expectations, US investment-grade bonds have retreated from recent highs, primarily due to a week-on-week widening in spreads
  • The growth in industrial profits and a rebound in electricity demand, reflecting continued improvements in the mainland economy, along with a stable Loan Prime Rate (LPR), will sustain corporate financing demand
  • Post-rate cut improvements in corporate earnings expectations have pushed high yield spreads tighter, now near historically compressed levels. Short-term volatility may arise from changes in rate policy expectations
  • The PBoC’s reaffirmation of accommodative policies and improved financing conditions for property developers are providing support. That said, the pace of the recovery in property sales remains uncertain
  • Emerging market debt continues to deliver steady performance, supported by the US resuming rate cuts and overseas investor demand for higher yields. This market is likely to sustain continued inflows
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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