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Japans Topix index fell 2%.The yield on 30-year Japanese government bonds rose 5.5 basis points to 3.310%.On November 18th, a Citi research report indicated that Leapmotor (09863.HK) reported a net profit of RMB 150 million in the third quarter, in line with expectations. This was mainly due to approximately RMB 250 million in carbon credit revenue, a significant improvement compared to the net loss of RMB 690 million in the same period last year, and similar to the net profit level of the second quarter. Furthermore, the R&D expense ratio decreased by 1.5 percentage points quarter-on-quarter to 6.2%, and the administrative expense ratio also decreased by 0.4 percentage points quarter-on-quarter to 8.1%, keeping the net profit margin stable at 0.8% in the third quarter. Free cash flow reached RMB 3.84 billion during the period, a significant increase compared to RMB 1.2 billion in the previous quarter and RMB 1.3 billion in the same period last year. The company maintained its sales target of 1 million vehicles by 2026. The bank maintained its "Buy" rating with a target price of HKD 100.Hong Kong-listed apparel stocks surged, with Fast Retailing (06288.HK) rising over 5.8%, Luen Thai Holdings (00311.HK) rising over 11%, and Shanshan Brands (01749.HK) and others following suit.On November 18th, JPMorgan Chase issued a report stating that Geely Automobile (00175.HK) outperformed expectations in its third-quarter results, with core net profit exceeding the banks forecast by 4%. Net profit per vehicle rose 15% quarter-on-quarter to RMB 5,200. The bank stated that its third-quarter results were solid, mainly driven by economies of scale, a better product mix, and expanded export contributions. The bank believes that Geelys share price increase year-to-date is more driven by improved profitability than by expansion multiples of its target. During the earnings conference, management emphasized plans for new models next year, autonomous driving (AD) technology, and export strategies. The bank welcomes this and expects stronger growth momentum in the final quarter of this year and next year. The bank maintains its "Overweight" rating with a target price of HKD 24.

GBP/USD perceives barriers below 1.1980 as Fed hawks strengthen risk-averse sentiment

Daniel Rogers

Nov 29, 2022 15:13

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The GBP/USD pair has faced selling pressure around 1.1976 during the Tokyo session. The brief Cable recovery from the 1.1940 support level has terminated as hawkish remarks from Federal Reserve (Fed) policymakers have strengthened the risk aversion theme.

 

The US Dollar Index (DXY) has resumed its advance after a retracement to approximately 106.60. Futures on the S&P500 have rebounded marginally during the Asian session, although a reversal is still quite distant. In the interim, rates on 10-year US Treasury securities have rebounded to approximately 3.69 percent.

 

As investors feel the slowing in the interest rate hike is not indicative of a suspension in policy tightening, US Treasury bonds have regained its alpha. Policymakers at the Federal Reserve (Fed) expended much effort to reach an inflation rate of 2%, yet the headline inflation rate in the United States is 7.7%.

 

Thomas Barkin, president of the Richmond Fed Bank, remarked on Monday, as reported by Reuters, that he favors fewer future interest rate hikes as the central bank works to decrease overly high inflation.

 

According to Financial Times, Loretta Mester, president of the Cleveland Fed Bank, believes the Federal Reserve is not close to stopping its rate hikes. She highlighted that additional favorable inflation statistics and indications of moderation are required prior to establishing a plan to halt rate hikes.

 

In the future, the US Gross Domestic Product (GDP) numbers will be closely scrutinized. The third quarter GDP estimate is anticipated to remain unchanged at 2.6%. As the Fed is devoted to achieving price stability, it is strongly recommended to reduce the growth rate. A period of rising growth rates will continue to keep inflation in check, as a robust GDP indicates robust demand from individuals, which does not translate to a decline in price rise.

 

Economists at Danske Bank have concluded that the United Kingdom has officially entered a recession. Expectations are for four consecutive quarters of negative GDP growth, with growth not resuming until the fourth quarter of CY2023.


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