Investment Insights

CIO Viewpoints

Sino-US summit sent signals of stability

Daily Insights

Focus of the Day

  • Japan long-end yields extend gains

Other Commentaries

  • Japanese and South Korean leaders pledge closer partnership; China telecom operators explore token monetization models; China sees cross-border inflows return in April

Market Analysis

FX Markets Analysis

Latest Technical Highlights

CNH - Uptrend↗

Support / Resistance

vs HKD 1.1452 / 1.1553

vs USD 6.78 / 6.84

SAFE data released on Monday showed China’s April foreign-exchange settlement surplus widened to US$40.1bn, extending a 12-month run of surpluses. Combined with strong exports and improving US–China trade relations, this backdrop is expected to support an orderly appreciation of the renminbi

 

Legends

Uptrend ↗  Sideways →  Downtrend ↘

*Pertaining to historical technical trend analysis only and do not reflect any forecasts or any forward looking views

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Stock Markets View

  • Ongoing constraints on shipping through the Strait of Hormuz are keeping oil prices high. Stronger-than-expected US April inflation has pressured equities. Attention turns to the Fed’s April meeting minutes
  • Rising oil prices are amplifying European inflation concerns and reinforcing expectations of further ECB tightening. UK political uncertainty may also weigh, with Europe likely to continue lagging the US near term
  • Following recent record highs, several markets have seen profit-taking, alongside foreign outflows from South Korea. If volatility persists, regional high-dividend stocks may outperform
  • US–Iran talks remain inconclusive and warrant continued monitoring. A renewed risk-off environment could influence global investors’ allocation to emerging markets
  • China’s April retail and industrial data missed expectations; near-term Hang Seng support is around 25,000. Improving signs in US–China trade relations may support equity inflows
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

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Bond Markets View

  • A weak US 30-year Treasury auction highlights limited demand for long-dated duration despite higher yields
  • As of 15 May, rising US yields weighed on US investment-grade credit (down over 1% week-on-week), although spreads continued to tighten
  • China’s new loans were below expectations, but the PBoC attributed slower growth to economic upgrading and a more diversified financial system
  • Geopolitical risks previously lifted volatility; improving ceasefire expectations have supported risk sentiment, with spreads narrowing to a three-month low
  • April China’s new loans declined, signalling sluggish financing demand, while holiday spending supported consumption. Selective sectors (financials, Macau gaming) and higher-quality credits appear more resilient
  • Brazil’s fuel subsidies, framed as fiscally neutral, may help anchor inflation expectations in the near term amid high oil prices
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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