Investment Insights

CIO Viewpoints

How Fed's downward revision of growth forecasts would impact the stock and bond markets?

Daily Insights

Focus of the Day
  • Oil price RSI climbed above 50, signaling improved technical momentum

Other Commentaries

  • US March consumer confidence fell for the fourth month; Further rate hikes had been discussed in BOJ’s January meeting; leading China e-commerce firm cited AI data-centre bubble risk

Market Analysis

FX Markets Analysis

Latest Technical Highlights

JPY - Uptrend ↗

Support / Resistance

vs HKD 5.1490 / 5.3253

vs USD 146.00 / 151.00

Japan's Composite PMI fell sharply to 48.5 in March, indicating contraction due to inflation concerns. This may prompt the BOJ to raise interest rates soon, benefiting the yen. Resistance for dollar/yen is at 151, with support at 146.

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 dovish signals post-meeting, coupled with US President Trump's indication of flexibility on reciprocal tariffs, have supported a rebound in US equities. Market attention is now on key upcoming data releases, including PCE
  • Increased fiscal spending among EU member states may bolster economic growth. However, uncertainties around the impact of US tariff policies could leave European equities directionless in the near term
  • Moderate inflation across many Asian economies, alongside a pullback in the US dollar, provides room for regional central banks to implement stimulus measures, supporting economic and equity market outlook
  • Emerging market currencies have strengthened year-to-date, aided by a weaker US dollar. However, rising inflation, tariff concerns, and heightened domestic political risks have reintroduced volatility in some markets
  • Following a recent rally, Hong Kong equities have entered a consolidation phase. Markets are now focused on details of US reciprocal tariffs to be announced on April 2 and developments in Sino-US relations, with the next key support level at 23,000
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 Fed’s dovish stance at its recent meeting suggests it will maintain accommodative monetary policy amid economic uncertainty. US Treasury yields have declined, providing support to sovereign bond performance
  • The Fed’s dovish tone has tightened spreads on US investment-grade bonds. Higher yields in this segment are expected to attract continued capital inflows
  • As anticipated, the People’s Bank of China kept the March Loan Prime Rate (LPR) unchanged. Facing US tariff threats, the PBOC is likely to maintain a moderately accommodative stance, supporting a stable corporate financing environment
  • The US high-yield market has stabilized, and new issuance activity has picked up. Current yields of around 7.5% are likely to draw investors seeking higher income
  • The Asian high-yield bond market remains stable. The PBOC’s potential guidance on lowering mortgage-related rates lower could support the property market recovery
  • The Brazilian central bank delivered its fifth consecutive rate hike but signaled a slower pace of tightening moving forward. This is expected to mitigate the economic impact and stabilize Brazilian government bond 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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