Investment Insights

CIO Viewpoints

A shares investors turned active in July, showing a positive sentiment shift

Daily Insights

Focus of the Day
  • US July core inflation rebounded but did not hinder rate cut expectations

Other Commentaries

  • Optimism drove Australian stocks to new highs; China to subsidise consumer loans; US July budget deficit exceeded forecasts

Market Analysis

FX Markets Analysis

Latest Technical Highlights

AUD - Uptrend↗

Support / Resistance

vs HKD 5.0234 / 5.2589

vs USD 0.64 / 0.67

Following its Tuesday meeting, the RBA cut interest rates by 25 basis points to 3.6%, reiterating its cautious stance on further rate cuts. This, coupled with the extension of the US-China tariff moratorium by another 90 days, is expected to boost the performance of the AUD. AUD/USD resistance at 76.4% Fibonacci about 67 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

  • While largely better-than-expected corporate earnings and the Fed’s nearing rate cuts continue to propel US stocks to new highs, elevated valuations leave the market vulnerable to a pullback amid shifting policy risks and slowing growth
  • Optimism surrounding a potential resolution to the Russia-Ukraine conflict, coupled with stronger-than-expected second-quarter corporate earnings, has supported a catch-up rally in European equities. However, lingering uncertainties around US tariffs could cap further upside
  • Strong demand for artificial intelligence is expected to bolster Asia’s tech sector, with Taiwan’s tech-heavy market outperforming
  • A weaker USD has supported EM currencies, but recent volatility in energy prices and trade tariff risks could heighten near-term equity volatility
  • China's July CPI and PPI both stabilized, with measures to stimulate consumption and address disorderly competition expected to gradually take effect, boosting corporate profitability and valuations
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 Treasuries are expected to stabilize as markets focus on July CPI data and maintain pricing for a likely Fed rate cut in September
  • The US-EU trade deal has strengthened expectations that the ECB’s cutting cycle is nearing an end, capping upside for Eurozone corporate bonds
  • Chinese corporates have increased exports to non-US markets to offset declines in US exports, supporting price performance for relevant issuers' bonds
  • While US high-yield bonds have performed well, current yields are less compelling. Signs of a slowdown in the US labor market could weigh on future demand for high-yield bonds
  • Asian high-yield bonds extend their rally. China’s property sector stabilizes as targeted housing policies take effect, with investor attention on sales trends
  • Emerging market debt benefits from a subdued USD and attractive yields. Mexico’s central bank cut policy rates to a 3-year low to spur growth
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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