Investment Insights

CIO Viewpoints

In 2025Q2, how shall investors position the portfolio to navigate the uncertainties?

Daily Insights

Focus of the Day
  • US stagflation risks intensified, softening the dollar

Other Commentaries

  • China finalized an RMB 520 billion injection into four state-owned banks; EU reportedly offered concessions in Trump tariff negotiations; US tariff concerns drove gold to record highs again

Market Analysis

FX Markets Analysis

Latest Technical Highlights

JPY - Uptrend ↗

Support / Resistance

vs HKD 5.0842 / 5.2559

vs USD 148.00 / 153.00

Japan's Tokyo core CPI (excluding food) rebounded to 2.4% year-on-year in March, reinforcing the BOJ's view on raising interest rates, which is expected to support the yen. The USD/JPY faces resistance at the 100-day MA near 153, with support at 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

  • Concerns over the economy and inflation have intensified due to the US implementing a 25% tariff on imported automobiles and unfavorable PCE inflation data. The market's next focus will be the announcement of reciprocal tariffs
  • Eurozone manufacturing activity has shown some improvement. However, global economic uncertainty persists due to tariff policies, and the UK has downgraded its economic growth forecast for the year. European equities may remain in consolidation
  • Japanese automakers face pressure amid adverse impacts from US auto tariffs, weighing on Japanese equities. Nevertheless, persistent weakness in the US dollar may encourage capital inflows back into Asian markets, which continue to offer attractive valuations
  • Recent rebounds in several emerging Latin American currencies have provided short-term relief. However, ongoing concerns regarding inflation pressures and tariff-related uncertainties could intensify, potentially driving continued volatility across regional equity markets
  • Recent equity fundraising by automakers and anticipation of US tariff announcements in early April have kept Hong Kong equities in consolidation. The Hang Seng Index’s next support level is 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

  • Rising concerns over US stagflation and the imminent announcement of reciprocal tariffs have driven safe-haven flows into the bond market. Declining US Treasury yields have supported the performance of sovereign bonds
  • Ongoing tariff-related uncertainties are expected to weigh on the US economy, increasing the pressure for widening credit spreads on corporate bonds. Accordingly, we downgrade our second-quarter outlook for US and European investment-grade corporate bonds from positive to neutral
  • China’s injection of capital into the first batch of four state-owned commercial banks to replenish Tier 1 capital has supported a tightening in spreads for related bank bonds, benefiting the asset class
  • Weaker US economic data and the unpredictability of tariff policies could further widen credit spreads in US high-yield bonds

 

  • Continued elevated bidding premiums in land auctions in China's property sector, combined with proactive local government measures to facilitate purchases of existing housing inventories, may help stabilize the real estate market and provide broader support for Chinese property bonds
  • The Bank of Mexico has implemented consecutive rate cuts to address economic slowdown and mitigate the impact of US tariff threats. However, this has simultaneously weakened the Mexican peso, weighing on the performance of local currency bonds
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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