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In recent years, the real estate and construction sector's share in the Hong Kong stock index has notably decreased. Nevertheless, as of 2022, it retains around 10% market share, covering real estate development, construction engineering, investment, and property management.
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UK Gilt Yields Soar as Pound Recalls 2022 Crisis
Summary:
The GBPUSD depreciated by 1.52% on Wednesday, amid a surge in the UK 30-year government bond yield to 5.697%, reaching its highest level since May 1998, driven by fiscal concerns related to the autumn budget.
Trading
1.34474
ENTRY
1.29930
TGT
1.36000
SL
1.34327 -0.00121 -0.09%
0
Point
Flat
1.29930
TGT
CLOSING
1.34474
ENTRY
1.36000
SL
Fundamentals
The GBPUSD experienced a sharp decline on Wednesday, dropping as much as 1.52% intraday and erasing all gains since Federal Reserve Chairman Powell's dovish speech at Jackson Hole on August 22. As of the daily rolling performance on Wednesday, the pound was the weakest among major currencies against the dollar.
UK long-term sovereign bond yields further widened their gains today, with the 30-year UK government bond yield surging by 6 basis points to 5.69%, the highest level since March 1998, serving as the immediate catalyst for the pound's depreciation.
The recent spike in the 30-year UK government bond yield is attributed to UK Chancellor Rachel Reeves' decision to increase borrowing in the previous fiscal year's budget, which expanded the UK fiscal deficit and heightened uncertainty regarding debt sustainability, thereby elevating the risk premium on long-term UK government bonds.
The UK government is scheduled to release the autumn fiscal statement on November 26, just as winter approaches. A 12-week anticipation period may offer limited benefits to the British pound, given the significant uncertainties surrounding the final content of the announcement.
The current state of the UK gilt bond market bears resemblance to the 2022 gilt crisis, which was triggered by former Prime Minister Liz Truss's "mini-budget." This fiscal policy focused on expansive measures, causing a sharp surge in 30-year UK gilt yields and precipitating a sell-off of the British pound.
Technical Analysis
The intraday trend of the GBPUSD remains predominantly bearish. The corrective phase initiated at 1.3787 continues, with renewed downward momentum. A further decline could see the pair retreat to the 1.3140 support level. However, the downside is likely constrained by the 38.2% Fibonacci retracement of the 1.2099–1.3787 move at approximately 1.3142. Currently, as long as the resistance at 1.3459 holds, any rebound is expected to be modest, with downside risks remaining intact.
Additionally, the asset is trading below its 20-day and 50-day SMAs. The 4H Relative Strength Index (RSI) has not yet reversed from oversold territory, indicating that the short-term bearish momentum may persist in this phase.
Trading Recommendations
Trading Direction: Sell
Entry Price: 1.3480
Target Price: 1.2993
Stop Loss: 1.3600
Valid Until: September 18, 2025 23:55:00
Support: 1.3335, 1.3255, 1.3142
Resistance: 1.3450, 1.3534, 1.3548
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You understand and acknowledge that there is a high degree of risk involved in trading with strategies. Following any strategies or investment methodologies is the potential for loss. The content on the site is being provided by our contributors and analysts for information purposes only. You alone are solely responsible for determining whether any trading assets, or securities, or strategy, or any other product is suitable for you based on your investment objectives and financial situation.
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Master of Economics, 8 years in the financial industry, CFA holder, joined HSBC (Hong Kong) Bank in 2013 after graduating from the University of California, USA in the Investment Research and Markets Department. With years of financial market experience and trading experience, having provided excellent investment advice to many brokerages, entity derivatives importers and clients in Greater China.
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