Fed rate cut probability rises; DBS raises Hang Seng target; Deutsche Bank on Oracle's debt.

Federal Reserve Rate Cut Probability Rises

According to CME's "FedWatch," the probability of the Federal Reserve cutting rates by 25 basis points in December has increased to 86.9%, while the chance of maintaining rates is at 13.1%. By January, the cumulative probability of a 25 basis point cut is 67.3%, with a 9.6% chance of no change and a 23.1% chance of a 50 basis point cut.

Impact on Emerging Markets

Morgan Stanley strategists suggest that as the U.S. economy slows, further rate cuts by the Fed could support the ongoing rally in emerging markets. They recommend maintaining long positions in emerging market local currency bonds, expecting returns to reach around 8% by mid-2026.

Dollar Weakness Expected by 2026

Pictet Asset Management's strategist, Luca Paolini, indicates that the dollar may face renewed weakness in 2026 due to the Fed's rate cuts. He notes that the interest rate differential is narrowing significantly, predicting a slight economic slowdown in the U.S. which will ease inflation pressures. In contrast, economic growth in other regions, particularly Europe and Japan, may improve.

DBS Upgrades Hang Seng Index Target

DBS has raised its 12-month target for the Hang Seng Index to 30,000 points, suggesting a 16% upside based on a projected P/E ratio of 13 times. The bank cites factors such as an expected 11.7% profit growth and a P/E ratio above the five-year average.

HIBOR Rises Significantly

The overnight Hong Kong Interbank Offered Rate (HIBOR) surged by 144 basis points to 3.37%, marking the largest single-day increase since December 2023. This rise reflects a reversal in rates across all maturities, with the one-month HIBOR climbing above 3% for the first time in six days.

UBS Optimistic on Chinese Tech Stocks

UBS forecasts a 15% upside for global stocks by the end of 2026, with a strong focus on Chinese tech stocks, predicting a 37% growth in corporate earnings. The firm is also optimistic about the Hong Kong market, expecting double-digit growth for the Hang Seng Index.

RMB Hits New High Against USD

The People's Bank of China reported a mid-point exchange rate of 7.0796 for the RMB against the USD, a rise of 30 basis points from the previous day. The RMB has appreciated by approximately 1000 basis points this year, supported by strong economic performance and capital market attractiveness.

Nvidia's AI Push

Nvidia's CEO Jensen Huang is aggressively promoting an "AI transformation" across the company. In a recent meeting, he responded to concerns about reducing AI usage by emphasizing the importance of automation and reassuring employees about job security.

Deutsche Bank Maintains Buy Rating on Oracle

Deutsche Bank analyst Brad Zelnick reaffirmed a "Buy" rating on Oracle, setting a target price of $375. He believes that the risks associated with Oracle's AI investments are outweighed by the potential returns, especially given the strong demand for AI cloud infrastructure.

Robinhood's Stock Surge

Robinhood's stock has surged by 19.48% this week, recovering nearly half of its November losses. The company recently announced a partnership to acquire a majority stake in a cryptocurrency derivatives exchange, significantly impacting its business growth.

Apple Intelligence Launch in China

Apple's recent feedback form suggests that its Apple Intelligence feature may soon launch in China. The form requested users to provide local phone numbers, indicating a potential rollout.

TSMC Executive Leak Investigation

The investigation into former TSMC executive Luo Wei-ren, accused of leaking trade secrets to Intel, has intensified with searches conducted at his residences. TSMC has filed a lawsuit against him, while Intel denies the allegations.

Bitcoin Price Movements

Bitcoin briefly rose nearly 2%, nearing the $92,000 mark. Nobel laureate Paul Krugman attributes recent declines in Bitcoin prices to falling poll numbers for Donald Trump, suggesting a correlation between Trump's political power and Bitcoin's market performance.

Northbound Capital Inflows into Hong Kong Stocks

On November 27, northbound capital net bought HK stocks worth 1.328 billion HKD, with Alibaba receiving over 919 million HKD in net purchases.

MXBC Breakfast Plans

MXBC has announced a trial breakfast program in select cities, offering products like coconut milk at a price of 5 HKD.

JD's Robotics Development

JD is set to launch a robot secondary development system, aiming to enhance user experience and expand the application of robotics in various scenarios.

Avita Files for HKEX Listing

Avita Technology has submitted its listing application to the Hong Kong Stock Exchange, with significant growth in vehicle deliveries projected for the coming years.