Investment Insights

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CIO Viewpoints

Why Asia High Yield Continues to Stand Out?

Daily Insights

Focus of the Day

  • Markets keep expectations for one US rate hike this year

Other Commentaries

  • Large US chipmakers post strong earnings; Iran and Oman advance temporary Hormuz sea lane; Australia July CPI tops expectations

Market Analysis

FX Markets Analysis

Latest Technical Highlights

XAU - Uptrend↗

Support / Resistance

vs HKD(Oz) 32,923 / 37,627

vs USD(Oz) 4,200 / 4,800

After US–Japan intervention and the US Treasury’s bond buyback plan, investors have refocused on the risk of worsening US debt, undermining confidence in dollar assets. Gold has extended gains to a three-month high and is expected to test the 4,800–5,000 range

 

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

  • Rising US long-end Treasury yields and weaker-than-expected results from major US retailers weighed on US equities. Markets will watch headlines from the global central bank symposium, the PCE inflation print and quarterly earnings from the leading AI chipmaker. 
  • Eurozone business activity accelerated in August, signaling continued resilience in the European economy and supportive for European equities. Near-term, however, the market remains sensitive to elevated oil prices, higher long-term yields and Middle East geopolitical risks.
  • Persistently high global long-end yields may dent risk appetite across Asian equities in the near term. Regional tech is likely to stay volatile; a diversified allocation towards sectors with strong cash flows and low leverage should be comparatively more resilient. 
  • Despite a softer US dollar index, oil prices have rebounded amid a prolonged US–Iran standoff. The opposing forces of USD weakness and higher oil prices are likely to influence risk appetite and positioning towards emerging markets.
  • Hang Seng Index consolidated after approaching 26,000. Internet names were pressured by news of a large e-commerce share placement, while Mainland banks and local Hong Kong sectors outperformed, offsetting part of the drag. Near-term support is seen at 24,500. 
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

  • The US Treasury announced an increase in the cap for Treasury buybacks, briefly pulling longer-dated yields lower. Nonetheless, structural headwinds—fiscal deficits and a wave of tech-sector issuance—remain in place. 
  • As of 21 Aug, US long-end yields edged higher WoW. US investment-grade credit slipped 0.15% WoW, with spreads broadly stable. 
  • China’s high-tech industrial investment rose 5% YoY, indicating a continued shift towards advanced technology, which should be supportive for bonds in related sectors.
  • US high-yield was little changed. Broad-based credit quality improvement continues to underpin inflows into the asset class.
  • Markets are monitoring whether new property measures in China can stabilize home sales in tier-1 cities and spill over to tier-2 cities, which will be key for the outlook of the property sector.
  • Bank Indonesia kept rates unchanged, in line with expectations. The central bank remains focused on market stability and investor confidence, which should be supportive for the rupiah and Indonesia local-currency bonds.
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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