Weekly Market Summary

💡1. The US Federal Reserve accelerated its rate hiking cycle, as expected, with a 75bps rise in its benchmark rate and signalled another 75bps hike was possible in July as it sought to rebuild market confidence in its ability to tamp down inflation running at a 40-year high. The Fed also raised its terminal rate estimate for the end of the cycle, cut growth and raised core inflation estimates. US S&P500 index rose more than 1.5%, while US government bond yields and the USD fell. The reaction suggests investors were reassured the Fed is determined to lower inflation down towards its 2% target.

💡2. U.S. CPI inflation data showed persistently high inflation last week, while the European Central Bank (ECB) announced plans to end asset purchases and carry out a rapid series of rate hikes. ECB are facing a growth-inflation trade-off. Hiking interest rates too much risks triggering a recession, while not tightening enough risks causing unanchored inflation expectations. The ECB also announced on Wed, that it plans to create a new tool to tackle the risk of Euro zone fragmentation. To tackle the recent surge in bond yields, the ECB said it will reinvest redemptions from its PEPP in a flexible way. Stocks fell and yields jumped last week on news of persistent U.S. inflation and rapid euro area rate hikes, showing markets are primed to be hawkish on rates. While, Equities and bonds extended losses as markets re-assessed the Fed rate hike cycle. 2- and 10-year bond yields jumped, the S&P500 fell 3.9% and the USD surged.

💡3. China’s production and retail sales data released yesterday (15 Jun) came in above expectations, but the outlook for the economy remains cautious given that domestic consumers have yet to loosen their purse strings and the external environment looks like it’s entering a slow patch. Meanwhile, the main event in Asia is the monetary policy decision by the Central Bank of Taiwan. Markets expect a 25bps rate hike to take the official discount rate up to 1.625%.

💡4. Hong Kong stocks weakened as developers slipped on rate outlook after the Federal Reserve raised its key rate by the most since 1994 to contain inflation. Most Asian markets advanced after officials said outsize hikes would not be common in future meetings. The Hang Seng Index dropped 0.4 per cent to 21,223,21 at the local noon trading break, after earlier logging as much as 1.1 per cent gain. An index tracking property developers tumbled 1.1 per cent on concerns higher borrowing costs will crimp home purchases and the city’s government warned of more capital flight as rate-gap widened. China Resources Land retreated 0.9 per cent to HK$33.20 while Henderson Land lost 1.4 per cent to HK$28.95. Sun Hung Kai Properties declined 0.7 per cent to HK$91.25.

You can find the latest "Weekly Market Summary" 📔 here: https://drive.google.com/file/d/1OQYDcaGIp6yTa0fnLV9TTHEs_PhIgqec/view?usp=sharing

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One of the must-ask interview questions for banking and finance is: “Have you read any news recently?”, with the follow-up questions: “How would you link this news to the market and what investment suggestions would you give to your clients based on this news?”

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Showing your market sense and ability to provide feasible investment ideas would help to differentiate you from other candidates. Therefore, apart from the weekly news update / investment insights, we have also generated this Weekly Market Summary for you to have a quick understanding of the market development and tips to answer some hot discussion topics. Take a look of the summary and WhatsApp us in the group if you have questions."