Investment Insights

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Daily Insights

Focus of the Day
  • US Magnificent 7 adjusted from high levels, and high-valuation large tech stocks may continue to fluctuate

Other Commentaries

  • Trump stated tariffs on Canada and Mexico will take effect on 4 March; Australia’s further rate cuts depend on inflation improvement; Russia-Ukraine situation nearing an end, gold prices retreated

Market Analysis

FX Markets Analysis

Latest Technical Highlights

JPY - Uptrend ↗

Support / Resistance

vs HKD 5.08 / 5.26

vs USD 148 / 153

Japan's service industry PPI rose 3.1% y-o-y in January, reflecting that rising wages have caused companies to pass on costs to consumers, supporting the Bank of Japan's interest rate hike, which is expected to be beneficial to the yen. Technically, USD/JPY fell below the 150 mark, and the next support is around 148. 

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

  • The Fed’s consideration of slowing or pausing quantitative tightening has propelled US equities to new highs. However, a pullback followed due to weak composite PMI data and a surge in long-term inflation expectations. The market’s focus now shifts to the January PCE inflation data
  • European equities have recently set new highs, driven by attractive valuations and optimism over potential ceasefire progress in the Russia-Ukraine conflict. However, uncertainty surrounding ceasefire negotiations suggests European markets may consolidate at elevated levels
  • Continued capital inflows into Chinese tech stocks have bolstered Asian equity markets. That said, concerns over the Bank of Japan potentially hiking rates again as early as May could weigh on Japanese equities
  • Inflationary pressures and political uncertainties remain key risks for most Latin American economies. While recent rebounds in Latin American equities and currencies have been observed, the region remains vulnerable to renewed capital outflows in the near term
  • Better-than-expected quarterly earnings from a major e-commerce player and its announced plan for substantial investments in AI have boosted sentiment in tech stocks, pushing the Hang Seng Index above its October highs. However, RSI divergence may indicate near-term consolidation pressure
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

  • Heightened concerns over the US economic outlook have supported inflows into US Treasuries. Markets are focused on the latest US PCE inflation data to gauge the future trajectory of interest rates
  • ECB officials have signaled that macroeconomic risks in the Eurozone are shifting from high inflation to low growth, creating room for potential rate cuts, which could support Eurozone bond performance
  • Easing market concerns over US tariff policies have prompted a reallocation of funds into Asia, driving a continued tightening in credit spreads for Asian investment-grade bonds
  • Renewed expectations of Fed rate cuts have sustained inflows into the US high-yield bond market as investors seek higher yielding opportunities
  • China's property prices are gradually stabilizing. Accelerated purchases of unsold housing inventory by local governments for affordable housing are expected to aid destocking and support property price stability, benefiting the sector’s outlook
  • Declining US Treasury yields are supportive of emerging market bonds. Robust performance in India’s services sector has drawn attention to the country’s economic environment, as markets evaluate the Reserve Bank of India’s future monetary policy direction
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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