Investment Insights

CIO Viewpoints

AI stocks under pressure, a market crisis or an opportunity?

Daily Insights

Focus of the Day

  • CSI 300 key support seen at 4,550

Other Commentaries

  • China’s May exports and imports grow faster than expected; US May NFIB small business optimism index misses forecasts; Global oil inventories near a 20-year low

Market Analysis

FX Markets Analysis

Latest Technical Highlights

JPY - Uptrend↗

Support / Resistance

vs HKD 4.8374 / 4.9599

vs USD 158.00 / 162.00

Markets expect the Bank of Japan to raise rates by 25bp next week and have largely priced in another increase later this year. With USD/JPY above the key 160 level and no intervention so far, focus is on post-meeting volatility and whether 162 could prompt action

 

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

  • US stocks ended a nine-week winning streak as earnings from major semiconductor companies fell short of expectations, triggering profit-taking. This, coupled with strong jobs data, boosting expectations of an interest rate hike, led to increased focus on May inflation data
  • The Eurozone economy contracted in the first quarter, with weak retail sales data. Amid inflationary pressures, the market has already anticipated a near-term interest rate hike by the ECB, and European stocks are likely to remain volatile
  • A pullback in US tech stocks is expected to impact North Asian stock markets, which have a significant tech weighting, in the short term. Short-term focus will be on the Federal Reserve's monetary policy stance and its influence on global capital inflows into Asian stock markets
  • Renewed uncertainty surrounding the Middle East conflict, coupled with a renewed strengthening of the US dollar index, may dampen global investor risk sentiment in the short term, potentially impacting the allocation of funds to emerging markets
  • Risk aversion in Hong Kong stocks has slightly increased, with funds shifting towards defensive sectors such as mainland banks and utilities. The market remains cautious, with short-term support for the Hang Seng Index at 24,200
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

  • U.S. nonfarm payrolls grew far more than expected in May, reflecting a stronger-than-expected U.S. employment situation, which has fueled market concerns about a potential Federal Reserve interest rate hike
  • As of June 5, US Treasury yields rebounded, putting pressure on US IG corporate bonds, which fell nearly 0.6% week-on-week, with spreads widening slightly by 1 bp
  • The S&P Southeast Asia Manufacturing PMI rose in May, the first increase in three months, mainly as a surge in local demand offset the impact of declining exports
  • The volatile situation in the Middle East has led to fluctuating sentiment and volatility in US high yields; tight interest rate spreads and stable fundamentals support active issuance, with continued attention focused on the progress of the ceasefire
  • Asian markets showed mixed performance, with rising uncertainty in Indonesia pushing the Rupiah to a new low; India maintained interest rates and implemented measures to stabilize financial markets, while continued attention remained focused on energy shocks
  • Emerging market bond markets remained robust; the right-wing candidate led in the first round of the Colombian presidential election, and the market is betting that fiscal consolidation and reforms in the country will benefit the overall Latin American bond 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

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