Investment Insights

CIO Viewpoints

Trump’s tariff faces new challenge, what does it mean for the markets?

Daily Insights

Focus of the Day

  • Waning foreign demand for US Treasuries may drive flows into key commodities like gold

Other Commentaries

  • ECB reduced its dollar reserves; global debt rose to a record $348 trillion by year-end; Bank of Korea kept its benchmark rate unchanged

Market Analysis

FX Markets Analysis

Latest Technical Highlights

EUR - Uptrend↗

Support / Resistance

vs HKD 9.0248 / 9.3360

vs USD 1.16 / 1.20

The European Central Bank reported on Thursday that it reduced the share of US dollars in its foreign exchange reserves by selling a portion of its dollar assets early last year. This proportion may decline further in light of recent developments related to Greenland and ongoing tariff disputes

 

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

  • While US stocks fluctuated within a range, sector rotation was evident. If future tariff policies can alleviate inflationary pressures, the overall economy will benefit, or traditional sectors will continue to benefit
  • The US Supreme Court's reversal of Trump-era tariffs may ease European corporate burdens. Together with strong Q4 earnings, this supports recent gains in European equities
  • The weak US dollar has spurred capital inflows into Asia. Rapid AI growth and rising demand for computing power should further lift Asian tech stocks
  • Despite rising geopolitical tensions, Latin American equities and currencies have performed well. Resolving global tariff issues would further support regional growth
  • Robust Lunar New Year retail spending in China lifted expectations for consumption growth, while Trump's possible March visit drew market attention 
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 controversy surrounding the legality of tariffs may push up bond yields in the future. Investors should control the maturity of their bond investments to reduce the price risk of long-term bonds
  • US investment-grade corporate bonds are performing steadily. In terms of sectors, energy and utilities performed best week-on-week
  • The narrowing decline in China's January PPI reflects the government's efforts to curb excessive competition, leading to a gradual recovery in industrial prices, which is beneficial to the performance of related issuers
  • US tariff policies bring uncertainty to US assets, but US high-yield corporate bonds recorded weekly gains
  • The increasing proportion of sovereign and quasi-sovereign issuers has diversified the market structure, which is beneficial to the long-term development of Asian high-yield bonds
  • The US and Indonesia recently finalized a reciprocal trade agreement that eliminates additional tariffs on some Indonesian exports, which is expected to boost Indonesia's key industries
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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