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On May 26th, Goldman Sachs issued a report raising its target price for NetEase-S (09999.HK) Hong Kong shares by 3.8%, from HK$250 to HK$260, while also raising its target price for US shares to US$166, reiterating its "Buy" rating. The bank stated that NetEases Q1 2026 results were strong, but the companys share price is currently very weak, and the bank believes the price correction has been excessive, especially given the 6% upward revision of earnings per share following the earnings announcement. The most surprising aspect of the companys quarterly results was the record-high profit margin, with gross margin increasing by 500 basis points quarter-on-quarter. This is because the companys profits mainly stemmed from the transformation of payment channels. Although AI is still in its early stages, it continues to permeate the companys game development, and cost benefits are beginning to appear. Looking ahead, the bank believes the company has abundant catalysts in the second half of 2026: 1) New game launches. The bank expects new games to generate RMB 5.9 billion in revenue over 12 months; 2) Strong profit growth. Operating profit is expected to continue to grow by 15-20% for the remainder of the year; 3) If it becomes a major Hong Kong listing and is included in the Southbound Stock Connect, it will help diversify the flow of funds to investors in the stock.On May 26th, according to Tianyancha App, Shenzhen Shengang Smart Investment Private Equity Investment Fund Partnership (Limited Partnership) was recently established. The general partners are Cinda Capital Management Co., Ltd. and Shenzhen Port Innovation Private Equity Fund Management (Shenzhen) Co., Ltd., with a capital contribution of 2.1 billion RMB. Its business scope includes equity investment, investment management, and asset management through private equity funds. Partner information shows that the fund is jointly funded by Shenzhen Port Capital Co., Ltd., China Cinda, and China Orient Asset Management Co., Ltd., among others.On May 26th, Bank of Japan Deputy Governor Ryozo Himino emphasized that timely policy adjustments are crucial to maintaining market confidence amid the recent sell-off in Japanese government bonds. Himino stated on Tuesday, "Regarding monetary policy and long-term interest rates, we believe it is very important to maintain market confidence that inflation will be properly controlled by adjusting the degree of monetary easing at an appropriate pace in response to future economic, price, and financial conditions." This statement seems to suggest that the Bank of Japan is open to raising interest rates in the near future. Himino, along with other Bank of Japan Governor Kazuo Ueda and other officials, have recently emphasized the need for a responsible attitude towards financial markets, and the market widely expects the Bank of Japan to raise interest rates at its meeting next month. Meanwhile, Japanese Prime Minister Sanae Takaichi subtly signaled last week her desire for the Bank of Japan to maintain policy stability as she attempts to mitigate the economic impact of the war with Iran. Himino stated, "The Bank of Japan will strive to implement policies appropriately to maintain this market confidence and achieve its price stability objective in a sustainable and stable manner."On May 26th, at 10:00 AM, the Guangzhou Municipal Peoples Government Information Office held its 19th press conference of 2026 in the Guangzhou Municipal Press Conference Hall. Feng Wei, Party Secretary and Director of the Guangzhou Housing Provident Fund Management Center, explained the relaxed policy on commercial-to-provident-fund loan conversion. Feng Wei stated that the revision of the "commercial-to-provident-fund conversion" policy systematically expands the scope of beneficiaries and lowers the threshold for loan conversion. Previously, applications for commercial-to-provident-fund conversion could only be made through the provident funds entrusted bank. After the revision, commercial loans from non-provident-fund entrusted banks, if meeting the conditions, can also be converted into provident fund loans. The calculation ratio for the loanable amount in commercial-to-provident-fund conversion has increased from 70% to 80%, further increasing support for existing commercial loans and striving to reduce the loan interest burden on contributors.The Indonesian rupiah continued its decline against the US dollar, hitting a record low of 17,785.

Gold Price Prediction: XAU/USD bears at $1,650 on Fed hawkishness and China news

Daniel Rogers

Sep 19, 2022 14:34

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During early Monday morning in Europe, the gold price (XAU/USD) maintains a position close to the intraday low at $1,670. In doing so, metal prices endure the weight of a stronger U.S. dollar amidst a sluggish session caused by Japanese and British vacations. The cause may be related to the Fed's hawkish bets and China-related news stories.

 

US Dollar Index (DXY) reverses a two-day slump while posting intraday gains of 0.18 percent at 109.85 as of press time. Indicators of the U.S. dollar's value versus the six major currencies have recently been buoyed by the University of Michigan's September consumer sentiment report and the market's positive expectations on the Fed's next move. Consequently, the probability of a 75-basis-point (bps) rate hike by the Federal Reserve increased to 80%, while the market's estimates of a one-percentage-point increase in the Fed rate rose to 20% at the latest.

 

US President Biden stated elsewhere, "I'm more positive than I've been in a long time." The national leader also claimed that inflation will be brought under control. On the same line are the covid updates from China, which have unlocked Dalian and Chengdu while observing zero coronavirus cases in Beijing and one, as opposed to zero the day before, outside of Shanghai's quarantine zone. However, US President Biden's willingness to support Taiwan in the event that China assaults Taiwan and hawkish expectations for the Federal Reserve appear to weigh on the steel price ahead of the major monetary policy pronouncements.

 

In addition, the People's Bank of China (PBOC) reduces the 14-day reverse repo rate by 10 basis points to 2.15 percent. "With no maturing reverse repos on Monday, the Chinese central bank injects 12 billion yuan," reports Reuters. The same might have indicated that the dragon nation is not in recovery mode and requires more rate cuts than rate raises, which could have caused the gold price to plummet. The cause is China's position as one of the world's largest gold consumers.

 

In light of this, the S&P 500 Futures post modest losses while mirroring Wall Street's Friday close. Notably, the selling in Japan curbs bond movements in Asia, but yields are robust near the multi-day high due to fears of a recession and hawkish Fed views.

 

Moving forward, a light economic calendar and important market holidays may limit intraday XAU/USD price fluctuations. However, bears are expected to maintain control because to aggressive Fed expectations, which, if dashed, might defy the bearish chart pattern and spark the long-awaited rally.

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