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On April 2, DBS published a research report indicating that the recent share price of GCL Technology (03800.HK) is expected to largely follow the cyclical changes in polysilicon prices. In addition, the government may introduce policies to control production or even eliminate backward production capacity, which will become a catalyst for the share price. It is currently expected that GCL Technologys production will drop by 30% this year, and the average selling price of products is expected to increase by more than 10%, offsetting the impact of the decline in production. DBS maintains a buy rating on GCL Technology. Considering that the profit recovery is slower than expected, it lowered its profit forecast for this year from RMB 1 billion to RMB 61 million. It believes that the average selling price will rise and costs will fall, and the profit will rebound to RMB 1.7 billion next year. The target price is lowered from HK$1.35 to HK$1.3.On April 2, market research firm Omdia reported that the annual revenue of the semiconductor market surged by about 25% to $683 billion in 2024. This sharp growth was attributed to strong demand for AI-related chips, especially high-bandwidth memory (HBM) used in AI GPUs, which led to an annual growth rate of 74% in the memory field. After a challenging 2023, the rebound in memory helped boost the overall market. However, this record year masked an uneven performance across the industry. The data processing sector grew strongly, while other key sectors such as automotive, consumer and industrial semiconductors saw revenue declines in 2024. These struggles highlight the weak links in the originally booming market.On April 2, DBS published a research report indicating that the restructuring of Agile (03383.HK) is ongoing, and as a valuable overseas asset in which it holds 45% of the shares, A-Life (03319.HK) may be included in the overseas restructuring plan, and part of the outstanding overseas debts may be offset through credit enhancement or debt-to-equity swaps. Therefore, the restructuring of Agile will put pressure on the share price of A-Life in the near future. In addition, there is still uncertainty as to whether the uncollected receivables from third parties and related parties can be recovered. Considering the limited profit prospects, based on the downward revision of revenue and profit margin forecasts, DBS further lowered the profit forecast of A-Life for this year and next year by 21% to 25%, maintaining the hold rating, and the target price was raised from HK$2.6 to HK$3.Goldman Sachs Group Inc. expects the yen to climb to the bottom of the 140 range against the dollar this year as unease about U.S. economic growth and trade tariffs boost demand for the safest assets. Kamakshya Trivedi, head of global foreign exchange, interest rates and emerging market strategy at Goldman Sachs, said the yen would provide investors with the best currency hedging tool if the likelihood of a U.S. recession increases. Reaching the 140 level would mean a 7% increase from current levels, and the banks forecast is more optimistic than the median of 145 in the agencys survey of analysts. "The yen tends to perform best when U.S. real interest rates and U.S. stocks fall at the same time," Trivedi said.Hong Kong-listed auto stocks fluctuated upward, with Leapmotor (09863.HK) rising more than 9%, Geely Auto (00175.HK) rising nearly 5%, NIO (09866.HK) and Li Auto (02015.HK) both rising more than 1%.

As the Fed Minutes weigh on the U.S. Dollar, AUD/USD bulls seek acceptance over 0.6700

Daniel Rogers

Nov 24, 2022 14:55

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Despite quiet around 0.6730-40 during Thursday's Asian session, the AUD/USD remained on buyers' radar. Possible causes include the massive selling of the US currency and the cautious optimism of the market.

 

The US Dollar Index (DXY) dropped the most in two weeks the day before the release of the minutes from the most recent meeting of the Federal Open Market Committee (FOMC), which revealed that policymakers addressed the need to delay rate hikes. According to the Federal Reserve Minutes, reports about the Federal Reserve's (Fed) "sufficiently restrictive" interest rate level also weighed on the dollar.

 

Significant bearish drivers for the AUD/USD pair in November were the worse US PMIs and the high Jobless Claims data. The US S&P Global Manufacturing PMI for November declined to 47.6 from 50.0 expected and 50.4 previously, while the Services PMI decreased to 46.1 from 47.9 anticipated and 47.4 previously. The S&P Global Composite PMI fell to 46.3 in November from 47.7 expected and 48.8 prior readings.

 

Despite this, the United States Weekly Jobless Claims jumped by the most since June, at 240K compared to 225K expected and 220K prior, boosting sentiment and weakening the US Dollar.

 

Alternately, robust prints of the US Durable Goods Orders, up 1.0% in October compared to 0.4% indicated estimates and a downwardly revised 0.3% previously, combined China's covid difficulties and negative prints of Australia's S&P Global PMI for November to challenge the AUD/USD bulls. The market's attention on the Fed Minutes and the likelihood of a Coronavirus recovery appears to have bolstered Aussie pair buyers.

 

Despite these wagers, Wall Street closed in positive territory, while US Treasury yields decreased and devalued the US Dollar.

 

A lack of noteworthy data/events and a US holiday may allow the AUD/USD pair to retain a portion of its recent gains. China's COVID-19 concerns and the Reserve Bank of Australia's dovish inclination may be on the same line (RBA). Bulls are poised to keep dominance despite diminishing prospects for quick Fed rate hikes.

 

A convincing upward breach of the 100-day simple moving average and a one-week-old declining trend line near 0.6695 and 0.6590, respectively, has buyers of the AUD/USD pair eyeing the monthly high above 0.6800.