Equity Market Updates
Market Daily
21/08/2026
Macro Update:
Treasury yields rise as buyback relief fades
US stock indices closed lower on Thursday as Treasury yields rose across the curve, erasing the previous day's rally following the Treasury’s bond buyback announcement. Investors remained sceptical that the buyback expansion will offer lasting relief from elevated borrowing costs. Concerns over large fiscal deficits, persistent inflation and heavy borrowing needs continue to weigh on longer-dated bonds. Higher oil prices continue to add to inflation risks, while increased borrowing linked to the artificial intelligence investment boom is creating further pressure on bond supply. Despite so, we maintain our US 10-year yield target at 4.5% for the next 12 months.
Meanwhile, in China, the People's Bank of China (PBoC) maintained its accommodative monetary policy by holding its one-year and five-year loan prime rates unchanged at record lows of 3.0% and 3.5%, respectively. The decision highlights a cautious approach by policymakers amid domestic and external headwinds following weak July economic data. Investor's focus now shifts towards any potential fiscal signals from the upcoming National People's Congress Standing Committee meeting in Beijing.
Main Upcoming Macro Indicators
European shares inched lower on Thursday as elevated oil prices and inflation worries kept investors on the sidelines, while a recovery in global bonds after a US Treasury intervention helped limit losses.
Within Europe, we maintain relative preference towards more defensive areas of healthcare and utilities.
Alibaba (9988 HK)
US-listed shares of Alibaba reversed early losses to end higher on Thursday as investors weighed strong AI cloud growth with a dramatic increase in capex, negative free cash flow, and a relatively soft print in the company’s e-commerce business. In terms of overall FY1Q results, Alibaba’s revenue stood at RMB269.0bln vs. RMB268.5bln expected, while adjusted EBITDA was at RMB39.1bln vs. RMB36.9bln expected.
MARKET CONSENSUS: 51 BUYS, 1 SELL, AVERAGE TP HKD175.81
Ping An Insurance (2318 HK)
Ping An Insurance on Thursday reported 1H2026 profits that beat market expectations, rising 36% YoY as China’s stock market rally boosted investment returns. Total investment income expanded 42% to RMB136.9bln, while net realised and unrealised gains on investments jumped about 20 times to RMB60.4bln. The company also declared an interim dividend of RMB0.98 per share, up 3% YoY.
MARKET CONSENSUS: 21 BUYS, 1 HOLD, AVERAGE TP HKD80.49
Broadcom (AVGO US)
Broadcom is in talks with lenders to raise more than USD60bln in debt for an AI chip financing deal that will benefit Anthropic and other companies. The financing may include a roughly USD30bln junior debt tranche and a senior-secured tranche that could range from about USD60bln and USD70bln.
MARKET CONSENSUS: 57 BUYS, 5 HOLDS, AVERAGE TP USD529.52
Walmart (WMT US)
Shares of Walmart fell more than 9% on Thursday after it reported Q2 comparable sales in US Walmart stores that fell short of market estimates, growing by about 2.6% YoY vs. 3.7% expected. Walmart’s pharmacy business was hindered by federal negotiations, while shoppers spent less per trip during the quarter. Looking ahead, the company upped its adjusted EPS forecast to between USD2.8 and USD2.87, although it still missed the USD2.9 expected by analysts.
MARKET CONSENSUS: 45 BUYS, 5 HOLDS, 1 SELL, AVERAGE TP USD134.91
Mitsubishi Electric (6503 JP)
Mitsubishi Electric announced on Thursday that it will acquire US energy software company PCI Energy Solutions for USD1.4bln. PCI develops software used by utilities and other electricity market participants. PCI will become a wholly owned subsidiary of Mitsubishi Electric once the transaction is finalised in 2026.
MARKET CONSENSUS: 13 BUYS, 4 HOLDS, AVERAGE TP JPY7207.69
Hyundai Motor (005380 KS)
Genesis, Hyundai's luxury vehicle brand, unveiled its first full-size flagship SUV, the GV90, with an estimated driving range of about 500km on a single charge. The electric SUV can charge from 10% to 80% in 22 minutes and includes a new roof airbag designed to protect passengers in rollover crashes. CEO Chung stated that the "GV90 is not simply a new vehicle, but a new vision for luxury mobility".
MARKET CONSENSUS: 31 BUYS, 5 HOLDS, AVERAGE TP KRW659607.13
Earnings Announcements
US Market
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European Market
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HK - China Market
Sinopharm, PICC, China Life
Global Indices Changes (%)
Fixed Income Market Updates
HDFC Bank priced USD 1.75 billion senior unsecured bonds across 2 tranches (3 and 5 year) with an order book that was more than 3x oversubscribed. Demand remained solid in the Indian investment grade financials space despite an increase in new issuances of late. An active primary market presents good opportunities to increase allocation to fixed income.
European Bank coco (AT1)
It was an active trading day across various currencies (USD, EUR, GBP) in European Bank AT1 space. Bond prices were down 0.125point overall with strong buying in Asia to start the day across the curve with strong preference in USD-denominated AT1 bonds followed by selling from hedge funds and dealers as rates sold off after Asia trading hours. Subordinated financial bonds offer yield pick-up without having to take on higher duration risk but be selective.
Asia Investment Grade (IG)
Credit spreads traded generally wider in Asia IG space with longer duration bonds such as Philippines and Indonesia sovereign bonds, Japanese and Taiwanese life insurers' subordinated bonds underperforming the general market. Indian financial space continued to see solid demand, despite an increase in new issuances of late. We have stable credit opinions of major Indian banks under coverage and an active primary market presents good opportunities to buy bonds.
Asia High Yield (HY)
It was a relatively lacklustre trading session in Asia HY space with bond prices mostly unchanged despite the rally in rates. Asset managers were still in a net selling and risk-trimming mode. Indonesia HY corporates were the outperformers especially those bonds with longer duration. However, given the uncertain fiscal and politcal backdrop in Indonesia, recent signs of stabilisation could be short-lived. We stay cautious in Indonesia space.
Forex Market Updates
The Dollar index fell below 99 on Thursday, the lowest since late May 2026, after the US Treasury announced it would double its long-term bond buyback program.
USD
The Dollar index fell below 99 on Thursday, the lowest since late May, after the US Treasury announced it would double its long-term bond buyback program. The move signalled that the US Treasury would be willing to actively intervene in the bond market to cap long-term yields, raising the outlook of dollar liquidity in the global financial system. The yield on the 30-year US Treasury bond declined sharply, falling nearly 2% on Wednesday, while the yield on the 10-year reference declined 1.4%, driving the USD Index down 0.9% to touch its lowest level at 98.558. The buyback announcement followed Wednesday's FOMC minutes from the July meeting, which confirmed that some members see the case for higher rates signalling a hawkish undercurrent that was nevertheless overwhelmed by the bond market intervention signal.
The Dollar may find near term support at 98.70 but a sustained break below may open 97.50.
GBP
Sterling has climbed to six-month peaks near 1.3661 on Thursday, driven by the Treasury buyback surprise and a string of soft US data. The domestic picture adds a supportive secondary layer as annual inflation rose by 2.9%, a four-month high in July from the data on Wednesday suggesting hawkish stickiness as investors pricing in higher borrowing costs from the Bank of England. Britain's labour market cooled further in the second quarter, marked by slowing earnings growth in the private sector and the smallest number of vacancies in more than five years, according to Reuters. Private sector regular earnings watched by the BoE as a gauge of domestic inflation pressure rose just 2.8% in annual terms during the three months to June, the weakest reading since October 2020, sharply below the 3.4% consensus in a Reuters poll. Job vacancies fell to 707,000 in the three months to July, the lowest since 2021 and below pre-pandemic levels.
The Sterling may hold near 1.3600 handle on a backdrop of weaker dollar in the near term.
AUD
The Australian Dollar pared back some of its gains despite the dollar sell off on Thursday as Australian employment unexpectedly fell 15,800 in July against a consensus forecast of a 15,000 increase and the jobless rate hit its highest since late 2021, data released Thursday showed, easing pressure on the Reserve Bank of Australia to raise interest rates. The weak report sent the Australian dollar down to $0.7103. The unemployment rate climbed to 4.5% from 4.4% in June, above the market consensus of 4.4%, with the participation rate easing to 66.9% from 67.0%. Markets imply only a 17% chance of hike at the RBA’s next meeting in September and up to 70% for a move to 4.60% by early next year.
The Australian Dollar may range within 0.7000 to 0.7200 in the near term.
XAU
Gold prices rose to $4,527.67 per ounce on Thursday, the highest since early June, tracking the rally in long dated US Treasuries after the Treasury Department announced doubling the buyback of notes and bonds in the upcoming financial quarter, another effort by Washington to contain soaring yields in the longer portion of the curve. Lower borrowing costs reduce the opportunity cost of holding the non-yielding metal, while the initial increase in dollar liquidity from the measures also aided gold prices. Meanwhile, minutes of the Federal Reserve's July meeting confirmed that a portion of policymakers argued that raising rates this year could prevent sharper inflationary pressure later on, though that hawkish signal was overwhelmed by the Treasury's bond market intervention. The geopolitical backdrop adds a persistent floor with Trump said the US will launch the most crushing economic operation against Iran and threatened severe financial penalties on any nation that helps Tehran evade sanctions or does business with Iran, as the US and Iran remain deadlocked over the Strait of Hormuz, keeping the war risk premium in play.
Gold may strengthen to $4,600 level on the backdrop of a weaker dollar.
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