Investment Insights

CIO Viewpoints

Are US AI stocks overheating?

Daily Insights

Focus of the Day

  • The yen stabilized above 158 per USD following the Japanese government's approval of a JPY 21.3tn stimulus package

Other Commentaries

  • December US rate cut odds rose above 60%; mainland China's inbound travelers surged over 100% year-on-year; UK’s November business activity barely grew

 

Market Analysis

FX Markets Analysis

Latest Technical Highlights

GBP - Uptrend↗

Support / Resistance

vs HKD 9.9584 / 10.3474

vs USD 1.28 / 1.33

The Bank of England decided to keep interest rates unchanged at 4% in November. The governor stated that more data was needed to confirm a decline in inflation, reflecting the central bank's cautious approach ahead of the UK government's autumn budget announcement. Technically, resistance for GBP/USD is seen at the 1.33 level.

 

Legends

Uptrend ↗  Sideways →  Downtrend ↘

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

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Stock Markets View

  • US equities experienced volatility amid fading expectations for rate cuts and concerns over stretched tech valuations, prompting a rotation into healthcare and consumer staples. Attention now turns to data releases following the end of the government shutdown
  • Weaker-than-expected Eurozone industrial production and Q3 UK GDP growth underscore the still-fragile nature of Europe’s economic recovery. Equity performance is likely to remain constrained by economic and earnings fundamentals
  • Asian markets consolidated near recent highs amid softer global risk sentiment. However, ongoing trade agreements with the US and a softer USD are expected to provide support
  • Recent USD weakness and a rebound in commodity prices are supportive of emerging markets. Still, geopolitical and election-related risks in Latin America warrant monitoring
  • Hong Kong equities corrected as expectations for a December US rate cut faded and China's October fixed-asset investment and home prices disappointed. Strong quarterly results from select tech companies provided some support
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

  • Reports that UK Chancellor Rachel Reeves will abandon plans to raise income tax in the Autumn Budget have heightened fiscal concerns, driving a sharp rise in UK government bond yields
  • Hawkish commentary from Fed officials pushed Treasury yields higher, leading to a slight weekly decline in US investment-grade bonds. Credit spreads, however, remained largely unchanged
  • Despite generally soft October economic data and a deepening month-on-month decline in China’s property market, expectations for further economic stimulus have helped stabilize sector performance
  • US high yield bonds saw volatile trading and widening spreads amid shifting risk sentiment. Market focus remains on the US rate cut trajectory and incoming economic data
  • Weakness in China’s October credit growth and aggregate financing reflects a sluggish recovery in funding demand. However, ongoing policy support is expected to maintain a range-bound trading pattern
  • A sharp decline in India’s October inflation to a multi-year low provides the central bank with greater policy flexibility, supporting the appeal of local and regional emerging market 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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