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Credit Suisse House View Reports

The Credit Suisse House View represents the cornerstone of our views on global macroeconomics, asset classes, regions, sectors and currencies, driving conversations and solutions for both private and institutional clients across the bank’s divisions, globally.

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July 24, 2020

CIO View: Hong Kong readies to make tech world its oyster

The introduction of the Hang Seng TECH Index (HSTI) is an important statement of intent that dovetails with both our thoughts on key issues and on our investment preferences – both in terms of geography and sector. While we remain neutral on equities overall, we have continued to advocate being selective about key exposures. The HSTI is certainly worth considering on multiple fronts.

July 17, 2020

CIO View: Lightening tightening

We assess the prospects for the Asian high yield space in the context of its sharp re-bound. The segment remains attractive, but also plagued by significant uncertainty and risks. Our base case points to investors enjoying a total return of around 8% over the next 12 months, which warrants our neutral stance on this asset class. Nevertheless, we remain mindful of developments in a key risk area – US-China tensions.

July 10, 2020

CIO View: Belt-up for the melt-up

In the 11 short trading days since we turned positive on China equities, these have advanced 15%. A strong gain in a short time undoubtedly, but one senses that we may still be in the foothills. In this week’s CIO View, I highlight a number of important features of the current rally which I believe distinguish it from previous bull markets; and as such, suggest gains have further to run from current levels.

July 3, 2020

CIO View: Locals are buying, foreigners will follow

Local investors have been driving the recent rally in Asian equity markets even as foreign investors continued to flee. What do they know that the latter seem to be missing? Local flows typically constitute the smart, early money that is worth paying attention to. Foreigners have also been hamstrung by a strong USD, but probably not for much longer. We think the locals are on the right track and we expect equities in China, Hong Kong, Taiwan, and Indonesia to outperform.

March 20, 2020

CIO View: Will USD funding stress ease?

Much of the extreme price movements in securities and foreign exchange recently has also come from a perilous shortage of USD funding in global financial markets. Understanding this “funding stress” and how it is affecting markets is crucial to thinking about the investment outlook in Asia over the next few months. The good news is that the US Fed has begun to intervene rapidly to try to improve funding conditions and stabilize markets. We see good reason to believe that funding stress will ease, with positive implications for some investments in Asia.

March 13, 2020

CIO View: Diversify against risk

Our key message amid the market turmoil is to diversify and consider prudent hedging recommendations. Now is not the time to accumulate risk “on dips.” The knife is still falling. Clients should consider unwinding leverage, boosting cash positions, and protecting their portfolios through strategic hedges and diversification. There will be buying opportunities ahead, but these will likely emerge in the second half of 2020 – not the first.

March 6, 2020

CIO View: Monetary easing goes viral

Coordinated action between central banks and their respective governments may be able to address the regional growth concerns raised by the coronavirus outbreak. The speed at which businesses resume their pre-outbreak levels of production remains key in China for getting the economy back on track and sustaining levels of investment.

February 28, 2020

CIO View: China’s sneeze reverberates

The scale and rapidity of this week’s correction in global equity markets suggests the market is pricing in a global recession should the spread of Covid-19 proceed unfettered. We favor adopting a defensive posture in portfolios for now and stand ready to buy on dips once the investment landscape improves.

February 21, 2020

CIO View: China equities: Time to add hedges

Despite the disruption caused by the COVID-19 outbreak, Chinese equities was supported by central bank action. With a temporary setback in economic activity lurking around, we feel Investors should take advantage of cheap option strategies to add hedges to portfolios. We recommend staying invested with zero cost option strategies.

February 7, 2020

CIO View: Recovering from the virus scare

Investor sentiment appears to have improved over the past week as China and other countries take drastic measures to tackle the novel coronavirus outbreak. Inevitably, crises herald opportunities and we believe the time may be right to consider a few investment possibilities.

December 16, 2019

CIO View: Finally, a deal…probably

On 13th December, officials from both China and the USA announced that the two sides have reached a phase one trade deal. The details released so far are positive for the economic outlook. We also get the sense that the deal may allow for further tariff reductions in the future upon verification of the terms of the deal being met. This should allow for some recovery in China’s exports to the USA and could improve US investment into China. The deal supports our overweight China equities stance and creates a risk that the USD/CNY could fall through our 3M forecast of 6.95.

December 6, 2019

CIO View: Deal or no deal?

The world’s two largest economies both need and depend on each other. The USA for consumption and China for investment. Ultimately, I believe the forces of self-interest on both sides are sufficiently elevated that a trade deal is the more probable outcome, and one announced sooner rather than later. In the run-up to Christmas, the uncomfortable combination of consumer prices pushed higher by December tariffs and volatile equity markets heading into 2020 would not be a good way to start an election campaign. Thus, US President Donald Trump – in my view – could well be under pressure to conclude a deal in the next few weeks.

November 29, 2019

CIO View: A boost for Asia’s new economy

5G mobile technology will accelerate consumption and delivery of services, and this will likely lead to a rise in demand for cloud computing capacity. Many Asian economies will take major steps forward in the area of internet connectivity in 2020. We expect that firms connected with 5G networks will see a rise in demand for their products. 

November 22, 2019

CIO View: Property: China’s “go-to” solution

Property in China is a lever that policymakers use to either cool economic overheating or to stimulate demand. When growth is softening, property is the top solution. In the current environment of low interest rates and growing demand for assets in markets/sectors with decent earnings visibility, China’s property sector fits the bill.

November 15, 2019

CIO View: Focusing on the signal

We change our view for Chinese equities to outperform from neutral. Our expectation is for China and the USA to sign a phase one trade deal before year-end. Markets will likely then focus on improvements in the Chinese economy and corporate earnings. We have also lowered our projected USD/CNY trajectory to 6.95 in 3 months and 7.20 in 12 months. 

November 8, 2019

CIO View: China: Green shoots emerge

The recent rallies in China’s equity and currency markets have further to run, in our opinion, as positive trade-related news suggests an eventual US-China deal could exceed market expectations. Leading economic indicators and company earnings are also improving. This is supportive of equities, credit, and the CNY.