2025-06-23 07:04

Key takeaways The Bank of Japan kept rates on hold this week, but its QT tapering announcement could support the JPY. JPY has drifted sideways lately with another round of “dedollarisation” likely needed to break the stalemate. We see USD-JPY heading lower on US policy uncertainty, JPY undervaluation, and potential US policy easing. The Bank of Japan (BoJ) kept interest rates on hold at 0.5% for the third consecutive meeting this week and remains non-committal to the timing of the next rate hike amid growth uncertainties. The market has the next rate hike fully priced in only by March 2026. The BoJ’s announcement to start quantitative tightening (QT) tapering (reducing the pace of balance sheet expansion) from April 2026 can be considered marginally positive for the JPY as it may help contain local investors’ bond outflows. But fiscal and supply concerns remain while the economic outlook stays subdued. In short, Japanese markets need more visibility on a US-Japan trade deal. USD-JPY has been drifting sideways for the past two months. Our modeling suggests that (1) the pair is now mostly driven by the USD itself; (2) correlation with historical explanatory factors such as yield differentials and risk sentiment remain lower than usual; and (3) the range of model-derived USD-JPY values has been stable at roughly 140-150. Another wave of ‘de-dollarisation’ is probably needed to break USD-JPY out of this stalemate while global investors' diversification inflows to Japanese equities have slowed much more than flows to Europe since April. Indeed, the JPY has underperformed other currencies since late April (see chart). This is probably to do with earlier extreme long JPY positioning. Net long JPY futures and options position surged to an all-time high in late April, based on CTFC data. In comparison, the market was only modestly net long European currencies at the time. Some market participants may have bought JPY as a portfolio hedge in April but with global equity markets having recovered since then, that demand likely waned. The number of net long JPY contracts has fallen by 20% since late April. Overall, we expect the JPY to strengthen against the USD by the end of the year on the back of US policy uncertainty, JPY undervaluation, and renewed expectations for the Federal Reserve easing. However, the market remains sensitive to headlines about US-Japan trade talks, especially regarding FX discussions. Source: HSBC, Bloomberg https://www.hsbc.com.my/wealth/insights/fx-insights/fx-viewpoint/jpy-upside-despite-steady-policy-rates/

2025-06-23 07:04

Key takeaways Asian economies have faced growth headwinds this year from shifts in global trade policy, geopolitical tensions, and rising market volatility. But improved external macro fundamentals – helped by supportive policy and strategies to safeguard macro-financial stability – have helped enhance Asia’s resilience. With US public finances under strain and growth cooling, the bond market vigilantes have kept US yields elevated this year. For many years, investors have been used to seeing a negative correlation in the returns from stocks and bonds. But that once-dependable relationship has broken down of late – hurting the performance of conventional 60/40 portfolios. Chart of the week – US catching down As expected, the US Federal Reserve kept rates steady last week, as it continues to navigate the impact of changing trade policy, cooling growth and employment, and a rising oil price. The so-called dot-plot that maps the future path of policy is still pencilling in two rate cuts by the end of the year, but only one further cut (rather than two) in 2026. Even before last week’s meeting, it was clear that policy uncertainty has weighed on US and global growth forecasts, with economists busy nudging down their growth numbers for 2025. Expectations for the US have moved down the most. This makes sense given the high level of uncertainty now facing US consumers and businesses, and how the inflationary impact of tariffs affects consumer disposable incomes and Fed policymaking. The bottom line is US growth looks to be “catching down” to other developed markets. As US exceptionalism fades, a new economic regime –the G-zero economy – is coming into view. The old idea of US hegemony, or the G10, is replaced with a new G-zero, where no one economic power has the willingness or ability to lead the global order. It is an economic regime where supply shocks are more important, and where growth is more constrained, and inflation is higher, and more volatile. Investors must recognise that uncertainty is no longer a transient feature of markets but a structural one. Adaptability, flexibility, and a globally diversified approach to portfolio construction will be essential for navigating the months and years ahead successfully. Market Spotlight New Rules Cyclical growth is converging in western economies, and economic power is gradually shifting to Asia. This new, multi-polar world has profound consequences for investing. As US exceptionalism fades, G-zero economics takes over (see story above), and asset classes that have been overlooked for years have a chance to shine. A structurally weaker dollar allows EM central banks to be proactive, which supports returns in EM stocks and local currency bonds. Recent market action has also seen correlations between US bond yields, stocks and the dollar go haywire. This calls for investors to consider new asset classes as potential safe havens in portfolios. In a multi-polar world, EM country correlations are also likely to fall – we can see this in the divergence of China and India market performance in recent years. This creates a strong argument that EM allocations should reflect a greater importance of country effects, and that EM exposure can offer portfolios a powerful source of diversification. Overall, investors must accept that uncertainty is a feature of the system, not a bug. This keeps volatility elevated and weighs on returns, and it reinforces the need to add other assets that can help build portfolio resilience. The value of investments and any income from them can go down as well as up and investors may not get back the amount originally invested. Past performance does not predict future returns. The level of yield is not guaranteed and may rise or fall in the future. For informational purposes only and should not be construed as a recommendation to invest in the specific country, product, strategy, sector, or security. Diversification does not ensure a profit or protect against loss. Any views expressed were held at the time of preparation and are subject to change without notice. Any forecast, projection or target where provided is indicative only and is not guaranteed in any way. Source: HSBC Asset Management, Bloomberg. Data as at 7.30am UK time 20 June 2025. Lens on… Trading up in Asia Asian economies have faced growth headwinds this year from shifts in global trade policy, geopolitical tensions, and rising market volatility. But improved external macro fundamentals – helped by supportive policy and strategies to safeguard macro-financial stability – have helped enhance Asia’s resilience. And longer-term, some macro strategists think the region could be well-placed to benefit from a reordering of global trade. Most Asian economies have diversified their trade links and reconfigured supply chains in recent years. They could now see opportunities from even stronger regional economic co-operation, product advancements driven by new technology, and new trade agreements. Renewed momentum in structural reforms could also be a growth catalyst. That could be good news for Asia’s stock markets. Chinese equities, for example, trade at a discount to developed and other emerging markets. Earnings revisions have been positive this year, with cooling trade tensions potentially driving a pick-up, and 12-month forecast earnings growth currently at 9%. TINA to Treasuries? With US public finances under strain and growth cooling, the bond market vigilantes have kept US yields elevated this year. Following Moody’s decision to strip the US of its AAA rating, other global agency downgrades risks forcing investors to look elsewhere for perceived safe haven assets. China is gradually diversifying away from US assets, a trend that has accelerated over the past 3-4 years. Japan’s holdings are in line with the long-term average, and the eurozone’s have even increased, but rising yields in Europe and Japan could spark a shift in favour of Bunds and JGBs. Further USD weakness plus a fracturing of the G7 may also reduce investors’ desire to hold Treasuries. Global diversification away from Treasuries has the potential to create a vicious cycle of higher US yields, greater concerns about debt sustainability, and more ratings downgrades. But it’s not straightforward. The global universe of the safest bonds remains dominated by US Treasuries, with outstanding debt roughly 14 times larger than that for Bunds. And Japan has its own fiscal problems, reflected in its single A rating. The hedge fund edge For many years, investors have been used to seeing a negative correlation in the returns from stocks and bonds. But that once-dependable relationship has broken down of late – hurting the performance of conventional 60/40 portfolios. It reinforces the need to build portfolio resilience – and one option is to consider alternative asset classes as both diversifiers and differentiated sources of return. An allocation to hedge fund strategies, in particular, can benefit portfolios because of their low correlation with broader market indices. They can improve the risk/return profile of a traditional portfolio, while potentially providing downside protection. A typical balanced hedge fund portfolio insulated against as much as 90% of market weakness in Q1 2025. Indeed, market uncertainty can be a catalyst for some hedge fund strategies. Equity market neutral strategies can perform well in periods of volatility, while global macro strategies can benefit from interest rate movements and opportunities in commodity markets. With volatile market narratives currently a feature of the system, hedge funds could offer much needed diversification. Past performance does not predict future returns. The level of yield is not guaranteed and may rise or fall in the future. For informational purposes only and should not be construed as a recommendation to invest in the specific country, product, strategy, sector, or security. Diversification does not ensure a profit or protect against loss. Any views expressed were held at the time of preparation and are subject to change without notice. Index returns assume reinvestment of all distributions and do not reflect fees or expenses. You cannot invest directly in an index. Any forecast, projection or target where provided is indicative only and is not guaranteed in any way. Source: HSBC Asset Management. Macrobond, Bloomberg. Data as at 7.30am UK time 20 June 2025. Key Events and Data Releases Last week The week ahead Source: HSBC Asset Management. Data as at 7.30am UK time 20 June 2025. For informational purposes only and should not be construed as a recommendation to invest in the specific country, product, strategy, sector or security. Any views expressed were held at the time of preparation and are subject to change without notice. Any forecast, projection or target where provided is indicative only and is not guaranteed in any way. Market review Heightened geopolitical tensions pressured risk markets last week, with oil prices rising further. The US dollar rebounded modestly against major currencies, while gold prices retreated from recent gains. US Treasury yields were largely steady during a holiday-shortened week, as investors digested the latest FOMC meeting, where Fed Chair Powell noted that uncertainty has “diminished but remains elevated”. US equities were little changed over the first three trading sessions. The Euro Stoxx 50 declined, while Japan’s Nikkei 225 advanced. Other Asian markets traded mixed: Hong Kong’s Hang Seng and mainland China’s Shanghai Composite fell, but South Korea’s Kospi surged to its highest level since late 2021, extending its post-election rallies. https://www.hsbc.com.my/wealth/insights/asset-class-views/investment-weekly/us-catching-down/

2025-06-20 12:02

Key takeaways No bazooka stimulus – the aim is to solve structural problems with reforms; watch out for the 15th Five-Year Plan. Household goods consumption is similar to global levels, but services consumption lags; Hukou relaxation can help. US-China talks have eased tensions, though uncertainty remains; China’s exports may face headwinds in 2H. China data review (May 2025) Retail sales grew 6.4% y-o-y in May, the fastest pace since December 2023, driven by the consumer goods trade-in programs. Sales of home appliances rose by 53% y-o-y, communications appliances by 33% y-o-y, and electric vehicles by 28% y-o-y (the latter is based on CPCA data). The Ministry of Commerce reported that the trade-in subsidies helped drive RMB1.1trn in sales this year as of end-May (or cRMB380bn for May, 9% of retail sales) (Xinhua, 1 June). Industrial production (IP) accelerated 5.8% y-o-y in May supported by robust export figures but the domestic story was mixed. Policy support for equipment upgrading and for new growth drivers has kept equipment (+9.0% y-o-y) and high-tech manufacturing (+8.6% y-o-y) elevated. But, sectors along the housing supply chain continued to underperform, as IP growth in non-metal minerals (-0.6% y-o-y) and ferrous metals manufacturing (-4.8% y-o-y) were more muted. The property sector came in a bit weaker with a deeper fall in primary home sales (-4.6% y-o-y) and lower property investment (-12% y-o-y). There continues to be policy tweaks on the margin which can help to prevent the sector from seeing a faster slump. A larger push might still be needed, though the urgency of propping up the property market may fall behind supporting other sectors such as exporters and boosting consumption. Headline CPI inflation dropped 0.1% y-o-y in May as drags from energy prices persisted. However, core CPI inflation picked up to 0.6% y-o-y given ongoing policy support to boost consumption. Meanwhile, PPI inflation saw a deeper fall, -3.3% y-o-y, as deflationary pressures from some excess capacity along the housing supply chain and falling oil prices have yet to abate. Trade uncertainty suggests that domestic demand will remain the key driver to boost price levels. Exports rose 4.8% y-o-y in May as a deeper fall in US exports (-35% y-o-y) was offset by robust exports elsewhere, including ASEAN (+15% y-o-y), Eurozone (+12% y-o-y), and Africa (+33% y-o-y), reflecting China’s moves to diversify more of its exports and supply chains. Imports declined at a faster pace, -3.4% y-o-y in May, as lower global commodity prices and ongoing weakness in China’s property sector have continued to weigh on domestic demand. Top five questions about China’s economy What comes to mind if you are asked to name the most pressing issues facing China’s economy right now? Trade tensions, labour market pressure, a deflationary trap, sluggish consumption, and where is the bazooka stimulus? Let us provide you with some answers. Q1: How fast is domestic consumption recovering? Retail sales surprised on the upside in May, driven in part by government subsidies (e.g. tradein programs). Smaller cities (tier-3 and 4) are faring better than larger ones in terms of retail sales, helped by urbanisation trends. While China’s goods consumption is in line with global levels, services consumption lags. More policies emphasising services demand and structural reforms to support people’s welfare (such are Hukou relaxation) will help sustain consumption. Note: *EV refers to retail volume. HH = household. Source: CEIC, CPCA, HSBC Source: Wind, HSBC Q2: How is the labour market faring? The headline unemployment rate has edged down (5% in May), but there are still pressure points. The youth unemployment rate is c16% and may prove to be sticky, given the rise in the number of graduates and a lack of quality entry level jobs. Low-income and migrant workers have seen a slower pace of income growth relative to both the rest of the population and the pace of GDP growth. However, the government’s increased policy focus and the roll out of measures to support people’s livelihood and boost income growth can help. Q3: Deflation, deflation, deflation: Is there any way out? China is experiencing its longest stretch of contraction in the GDP deflator. While CPI weakness stems from volatile items, core CPI is relatively steady. PPI deflation has been affected by weak demand and excess capacity. Measures to adjust supply and improve profitability may be accelerated, particularly in the industrial sector. Addressing shortfalls in the social safety net and stabilising the labour market are also essential. Q4: Why have exports stayed resilient this year despite the added US tariffs? This comes down to frontloading and trade restructuring. We estimate that China’s direct US exports were largely frontloaded in 4Q last year, spilling over into 1Q ahead of the “Liberation Day” announcements. These exports took a hit in April and May due to the tariffs. The restructuring of trade to other markets, particularly emerging markets such as ASEAN and Latin America, have helped to fill the gap. But other countries may also be facing higher US tariff rates. We expect overall exports to slow in 2H. Q5: Does a China stimulus package depend on US-China relations? We do not expect China to deliver a bazooka stimulus package, as policymakers tend to favour policy workhorses rather than show horses. With trade talks heralding a period of relative calm and domestic activity data holding relatively firm, China will likely continue the steady pace of policy implementation. Source: Refinitiv Eikon Note: *Past performance is not an indication of future returns. Priced as of 19 June 2025. Source: Refinitiv Eikon https://www.hsbc.com.my/wealth/insights/market-outlook/china-in-focus/top-five-questions-about-chinas-economy/

2025-06-19 12:01

Key takeaways The Federal Reserve left interest rates unchanged at 4.25%–4.50%, marking the fourth consecutive meeting without a policy move. While the Fed remains on hold, the updated Summary of Economic Projections (SEP) reflects a shift in tone, with lower growth expectations and higher inflation forecasts across the board. Chair Powell struck a balanced tone during the press conference, acknowledging ongoing risks from tariffs and geopolitical tensions while pointing to areas of resilience in the economy. He emphasised that while the inflation impact has yet to fully materialise, it’s expected to feed through to consumer prices in the coming months. He reiterated that the Committee is prepared to adjust policy as needed but prefers to wait for clearer inflation signals. We maintain a constructive outlook, particularly on US equities, where strong earnings growth, AI-driven productivity gains, and structural re-industrialisation trends remain supportive. In fixed income, we continue to take a selective, high-quality approach amid volatility, while the US dollar remains under pressure as markets focus more on trade policy and fiscal dynamics than near-term Fed moves. We continue to forecast three 0.25% rate cuts to be delivered in September, December and March 2026, bringing the Fed funds target range to 3.50-3.75% by the end of 2026. Please refer to the full report for details about the event and our investment view. https://www.hsbc.com.my/wealth/insights/market-outlook/special-coverage/us-fed-on-hold-awaiting-tariffs-and-fiscal-policy/

2025-06-16 07:05

Key takeaways The ECB cut rates again in June but hinted at a pause… …but the BoC paused rate changes for a second time in a row. US data and events (rather than the rate differential) could be crucial for short-term FX moves. On 5 June, the European Central Bank (ECB) delivered a 25bp cut, bringing the key deposit rate to 2.0%. This was its seventh consecutive cut (and the eighth in total for this cycle since last July). The widely expected decision was “almost unanimous” although one ECB Governing Council (GC) member did not support it. ECB President Christine Lagarde said the central bank was “very well positioned” to navigate the current uncertain conditions that are likely to come from global trade and a jump in fiscal spending in Europe. She also said inflation will remain at the 2% target over the medium term. All this reinforces our economists’ view (and also market expectations) that ECB rates are highly likely to remain on hold at its 24 July meeting. Absent any further deterioration in the economic outlook, June could be the last cut, in our economists’ view. EUR-USD jumped after the announcement, within touching distance of key resistance at 1.15, albeit briefly. This could be explained by the looser ties between FX and the rate differential over recent weeks (Chart 1). Source: Bloomberg, HSBC Source: Bloomberg, HSBC Like the EUR, the CAD also remains significantly stronger against the USD than the rate differential would typically imply (Chart 2). The CAD, after underwhelming in 1Q25, has rallied c5.2% against the USD so far this quarter (Bloomberg, 5 June 2025). Relief that many Canadian exports were spared the headache of higher tariffs has helped the CAD so far. A grind higher in Canadian rate expectations for year-end 2025 may also have helped the currency. Indeed, the Bank of Canada (BoC) decided on 4 June to hold rates steady at 2.75% for a second straight meeting. This was a dovish hold, however, as the BoC noted that the outlook for both the labour market and growth remains weak. Policymakers also hinted that if tariff risks materialise, the BoC could look to cut rates in 3Q25. Markets see a 25bp cut by the BoC in September (Bloomberg, 5 June 2025). With the case building for a summer pause by both the ECB and the BoC, EUR-USD and USD-CAD will take more direction from US data and events. There is likely to be ongoing asymmetry for the USD to US growth, as the currency’s reaction shows more sensitivity to weaker-than-expected readings compared to stronger numbers. https://www.hsbc.com.my/wealth/insights/fx-insights/fx-viewpoint/eur-and-cad-a-summer-pause/

2025-06-16 07:04

Key takeaways The Fed is widely expected to leave the funds rate unchanged at its meeting this week. What Chair Powell says and how the Fed factors US import tariffs into its updated forecasts will be the focus. US technology dominates the artificial intelligence revolution. But recent advances by Chinese AI firm DeepSeek have shown China to be a serious competitor. Asia’s investment in renewable energy is slowing as its governments struggle to balance decarbonisation objectives with delivering reliable and more affordable power sources. A scarcity of traditional funding options is adding to the headache. Chart of the week – EM central banks in easing mode Recently, the Reserve Bank of India (RBI) delivered front-loaded policy easing with a surprise 0.50% rate cut and liquidity easing through lower reserve requirements. Falling inflation and a broadly dollar-bearish backdrop have opened the door for the RBI to deliver bold moves this year – with a quick, cumulative 1% rate cut, substantial liquidity infusions, and multiple relaxations of macro-prudent measures. Big moves like this aim to speed up policy transmission through the banking sector and boost credit growth, helping to bolster consumer spending and capital investment. The measures are likely to support local stocks too, especially in rate-sensitive sectors like real estate and some financials. It comes as Indian equities have been under pressure this year amid heightened global policy risks. They’re also likely to lead to further spread compression on rupee-denominated corporate and supranational bonds, which offer attractive spreads over Indian government bonds. But this isn’t just an India story. A number of emerging market central banks have taken decisive policy action recently – as the US Fed continues to hold. Among them have been Mexico, Indonesia, Poland, South Africa, and Egypt. In some cases, countries have been able to act because their fiscal outlooks are improving. But the critical factor has been the weaker dollar, as investors reassess its status as a global safe haven. A weaker dollar is an obvious EM positive. It typically eases dollar debt servicing, helps trade, supports capital flows, and boosts returns in stocks and local currency bonds. With many EM economies transforming their macro structures since the “fragile five” phase a decade ago, and amid faltering confidence in American exceptionalism, no wonder investors are paying more attention. Market Spotlight Trading places Over the past decade, emerging market economies – especially in Asia and Latin America – have enjoyed closer integration when it comes to regional trade and banking. The result has been better growth, access to alternative sources of credit, and less volatile government spending. But this closer regional EM integration has come at a time of rising geopolitical tensions that have led to more fragmentation at a global level. This rewiring of global trade linkages is the focus of a new bulletin by the Bank of International Settlements. The BIS research explores how, prior to the 2010s, global trade expanded faster than GDP, but then slowed as geopolitical wrangling intensified. Meanwhile, integration in global banking fell sharply after the financial crisis and didn’t recover much afterwards. But at a regional level, trade and banking integration have continued to progress in emerging Asia and LatAm. According to the BIS authors, these trends – and the economic drivers behind them – have the potential to act as a buffer against geopolitical shocks that lead to global fragmentation. Their encouraging conclusion is that the reinforcing nature of trade and banking means that deeper regional integration in EMs – and the better growth and regional stability that comes with it – is likely to develop. The value of investments and any income from them can go down as well as up and investors may not get back the amount originally invested. Past performance does not predict future returns. The level of yield is not guaranteed and may rise or fall in the future. For informational purposes only and should not be construed as a recommendation to invest in the specific country, product, strategy, sector, or security. Diversification does not ensure a profit or protect against loss. Any views expressed were held at the time of preparation and are subject to change without notice. Any forecast, projection or target where provided is indicative only and is not guaranteed in any way. Source: HSBC Asset Management, Bloomberg. Data as at 7.30am UK time 13 June 2025. Lens on… Taking the summer off The Fed is widely expected to leave the funds rate unchanged at its meeting this week. What Chair Powell says and how the Fed factors US import tariffs into its updated forecasts will be the focus. In March, the Fed expected 1.7% yoy growth in Q425 with core PCE inflation at 2.8%. The current Bloomberg consensus figures are 0.9% and 3.3% respectively, giving some sense of how the Fed’s numbers could change. The March “dot plot” implied two rate cuts in 2025, in line with current market pricing, which suggests investors have interpreted higher expected inflation and lower expected growth as broadly offsetting. The latest data don’t argue for the Fed to guide market rate expectations in one direction or the other. Activity and survey data have been mixed. The labour market is cooling gradually but remains resilient. Importantly, March, April, and May inflation data have been softer than expected, implying that, absent tariffs, underlying price pressures are reasonably well contained. Modest policy easing later in 2025 appears appropriate. One catch is that a data-dependent Fed risks intensifying the sensitivity of the macro system to news, which could spur US market volatility. Artificial intelligence, real profits US technology dominates the artificial intelligence revolution. But recent advances by Chinese AI firm DeepSeek have shown China to be a serious competitor. A new research by some Equity Research teams finds that while the US is still likely to lead on AI innovation – driven by Silicon Valley start-ups and Magnificent 7 mega-caps – China could lead globally in engineering optimisation, production, and widespread commercialisation. With AI reasoning models now able to reach potentially billions of users, some investment specialists believe the AI race is no longer just about who builds the smartest machine, but who gets it to consumers at the lowest cost. And for investors, there are several implications. One is that software firms will probably lead the next stage of the AI investment cycle, as they work to get AI apps into the hands of users. Second, the influence of DeepSeek is likely to give emerging Asia inherent advantages in monetising AI tech, and that will attract increasing investor attention. As the cost of AI compute falls, the impact should be seen in a broadening-out of profits growth to emerging Asia and beyond – as the profits edge enjoyed by US tech over the past decade erodes. Energising Asia Asia’s investment in renewable energy is slowing as its governments struggle to balance decarbonisation objectives with delivering reliable and more affordable power sources. A scarcity of traditional funding options is adding to the headache. In the past, infrastructure has been dominated by large country-scale projects. But the current energy transition requires more localised investments, typically ranging from USD40 million to USD250 million. This shift has created a gap, because banks are geared towards larger deals. But the good news is that private credit, which is well-suited to renewable energy infrastructure because of its flexibility, is proving a successful alternative. Microgrids across the Philippines – combining solar panels, battery storage, and smart distribution tech – are a good example of successful privately-financed energy projects. With private credit delivering superior returns to both credits and stocks over time, and interest rates and inflation expected to remain high compared to historical levels, investor appetite for these kinds of cash-flow-generating assets with inflation protection is likely to persist. Past performance does not predict future returns. The level of yield is not guaranteed and may rise or fall in the future. For informational purposes only and should not be construed as a recommendation to invest in the specific country, product, strategy, sector, or security. Diversification does not ensure a profit or protect against loss. Any views expressed were held at the time of preparation and are subject to change without notice. Index returns assume reinvestment of all distributions and do not reflect fees or expenses. You cannot invest directly in an index. Any forecast, projection or target where provided is indicative only and is not guaranteed in any way. Source: HSBC Asset Management. Macrobond, Bloomberg. Data as at 7.30am UK time 13 June 2025. Key Events and Data Releases Last week The week ahead Source: HSBC Asset Management. Data as at 7.30am UK time 13 June 2025. For informational purposes only and should not be construed as a recommendation to invest in the specific country, product, strategy, sector or security. Any views expressed were held at the time of preparation and are subject to change without notice. Any forecast, projection or target where provided is indicative only and is not guaranteed in any way. Market review Risk markets struggled to make headway as investors weighed the outcome of the latest US-China trade negotiations, US inflation data, and geopolitical concerns. Oil and gold prices climbed, while the US dollar weakened further against major currencies. Core government bonds found support from tame CPI data and a solid 30-year Treasury debt auction. In equity markets, US stocks rose but EU-US trade tensions weighed on the Euro Stoxx 50, with the DAX the main casualty. Japan’s Nikkei 225 was little changed ahead of the BoJ meeting. South Korea’s Kospi led Asian markets, building on post-election gains, whereas India’s Sensex and China’s Shanghai Composite fell. In Latin America, Brazil’s Bovespa index rebounded after recent declines. https://www.hsbc.com.my/wealth/insights/asset-class-views/investment-weekly/em-central-banks-in-easing-mode/