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Shares of CSPC Pharmaceutical Group (01093.HK) fell more than 10% in the afternoon, with the company’s first-quarter net profit down 41.8% year-on-year.On May 27, chip manufacturer UMC held its annual shareholders meeting. Chief Financial Officer Liu Qidong stated that with the expansion of its Singapore plant, costs are higher and the company faces significant challenges. Selective price increases will be implemented in the second half of this year, and in 2027, the company will conduct more comprehensive discussions with customers regarding price adjustments.The Hang Seng Index fell more than 1% in the afternoon, while the Hang Seng Tech Index fell 0.4%.On May 27th, the Reserve Bank of New Zealand (RBNZ) kept the Official Cash Rate (OCR) unchanged at 2.25%, but ANZ Bank stated that the RBNZ is "clearly very inclined to raise rates." The vote was a 3-3 tie, with RBNZ Governor Brehman casting the deciding vote. The released interest rate path chart shows that the OCR will rise faster than expected in February. ANZ Bank stated that the chart implies a very high probability of consecutive rate hikes at the RBNZs next three meetings. ANZ Banks Chief Economist for New Zealand, Sharon Zollner, said, "We still expect three rate hikes this year, in July, September, and October." She added, "We remain open to the possibility that the OCR needs to rise above 3%, but there are many variables to observe before that happens."On May 27th, CLSA issued a research report stating that NIO-SW (09866.HK) achieved non-GAAP profitability for the second consecutive quarter, with first-quarter non-GAAP profit reaching RMB 45 million, in line with market expectations. Regarding expenses, the group continued to demonstrate disciplined spending, reflecting the effectiveness of its operating expense control measures. Synergies between domestic models should increase NIOs market share in the luxury segment, with the ES8 and ES9 models diversifying its profit contribution. The bank forecasts sales of 441,000 vehicles in 2026 and a return to profitability for the full year. Based on NIOs strong performance in the luxury segment and improved expense control, CLSA raised its 2026 revenue and net profit forecasts by 18.9% and 104.1%, respectively, to RMB 133.48 billion and RMB 277 million. The bank maintained its "Outperform" rating on NIOs after-hours US-listed shares, raising its target price from $6 to $7. Meanwhile, the bank initiated coverage of NIOs H shares, giving them an "Outperform" rating and a target price of HK$55.

GBP/USD seeks to regain 1.2300 as higher UK CPI strengthens the case for a rate hike by the Bank of England and the USD retreats

Alina Haynes

Mar 23, 2023 15:00

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During the Asian session, the GBP/USD pair attempts to reclaim the resistance level at 1.2300. Following a vertical correction, the Cable has recovered to near 1.2260 as the market anticipates that the absence of hawkish interest rate guidance from Federal Reserve (Fed) chair Jerome Powell while addressing the economy at the monetary policy meeting indicates that the Fed is close to ending its policy-tightening spell.

 

S&P500 futures have generated some gains in the Asian session following a decline on Wednesday as a result of Fed Powell's confirmation that the fight against intractable U.S. inflation will continue. Chairman of the Federal Reserve Jerome Powell has ruled out rate cuts in 2023, citing the difficulty of controlling inflation. In addition, US Treasury Secretary Janet Yellen's statement that the government "does not plan to insure all uninsured bank deposits" heightened fears of a banking sector collapse.

 

Following a recovery move, the US Dollar Index (DXY) has retreated on expectations that additional credit tightening to protect banking institutions will reduce overall demand, economic activity, and inflation. In the interim, the demand for US government bonds has increased as a result of expectations that US Janet Yellen will end further policy restrictions and reduce support for all bank deposits.

 

On the front of the United Kingdom, the Pound Sterling is likely to maintain its strength as the Bank of England (BoE) is scheduled to raise rates for the eleventh consecutive time. Governor Andrew Bailey of the Bank of England is expected to raise interest rates by 25 basis points (bp) in response to rising food and non-alcoholic beverage prices, as well as rising energy costs, which have contributed to inflation in the United Kingdom.

 

In the midst of global banking turmoil, the Bank of England's (BoE) interest rate decision will be difficult, as policymakers were divided over whether to raise rates further or maintain them at their present level.


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