Recently, global equity markets have gradually stabilized. Major Asian markets have seen their rallies moderate, U.S. equity futures have edged lower, while Canadian stock indices have reached new highs. The U.S. Treasury market continues to rebound, reflecting deepening market bets on Federal Reserve rate cuts within the year. Global markets are now at a critical juncture of liquidity policy maneuvering and risk asset repricing. As investors navigate short-term volatility, close attention must be paid to medium-term macro policy trends and shifts in capital flows. Ng Jian Hao from Mahala Capital Management Academy will focus on recent market performance and the impact of interest rate expectations, providing investors with effective strategic advice.
Logic Behind Market Volatility
Ng Jian Hao from Mahala Capital Management Academy believes that the stabilization in global equity markets this week confirms that short-term optimism is being priced in. Following earlier signs of easing inflation, investors are betting that the Federal Reserve will implement at least two rate cuts in the second half of 2025. This expectation has reinforced the ongoing rise in U.S. Treasury prices and provided support for growth stocks. In the short term, these positive effects have already been reflected in equity markets.
Divergent performances across Asian markets reveal differences in regional fundamentals and capital allocation. The Japanese market is under dual pressure from corporate earnings releases and exchange rate fluctuations, resulting in weaker stock performance. Australia has benefited from the stable support of its resources sector and expectations of a more accommodative domestic interest rate policy. Ng Jian Hao points out that the rise in Canadian equities is driven by a global reassessment of high-quality North American assets. Amid U.S. dollar volatility, CAD-denominated assets offer relative valuation advantages.
Despite a short-term easing in risk appetite, Ng Jian Hao cautions that the current market rally is structurally driven mainly by expectations rather than robust fundamental recovery. This means that any unexpected news related to the interest rate path could trigger market adjustments.
Interest Rate Dynamics and Investment Allocation
Ng Jian Hao from Mahala Capital Management Academy states that expectations for Federal Reserve rate cuts this year are reshaping the asset pricing logic. Unlike the market environment dominated by tightening cycles over the past two years, the strategic focus at present has shifted to identifying policy turning points. Investors need to maintain sensitivity to macro events and adopt a dynamic asset allocation approach.
Ng Jian Hao recommends that investors consider rebalancing strategies across three asset classes. Falling U.S. Treasury yields are likely to boost the valuations of high-dividend stocks and REITs, making these income-generating assets more attractive once the downtrend in long-term yields is confirmed. In the technology and financial sectors, certain leading companies may benefit from reduced financing costs and asset revaluation, becoming catalysts for structural market moves. For institutions holding multi-currency assets, declining U.S. interest rates will weaken the U.S. dollar and enhance the valuation recovery potential of non-U.S. markets.
For medium-term positioning, Ng Jian Hao notes that gold and Bitcoin, both possessing safe-haven attributes, are worthy of strategic allocation. In a phase where monetary policy is marginally easing and tail risks of inflation persist, these assets offer stronger value preservation functions.
Potential Risks and Structural Opportunities
Ng Jian Hao from Mahala Capital Management Academy points out that, despite overall market sentiment stabilizing, structural risks remain. Current expectations for policy easing are highly concentrated; if the actual pace or timing of rate cuts diverges from market forecasts, volatility may rise, with a greater impact on highly valued assets.
Ng Jian Hao advises investors to construct more resilient portfolio structures. Maintaining an appropriate cash position can help manage short-term adjustments, while allocating to short- and medium-duration bonds can reduce portfolio volatility. Attention should also be given to sectors capable of sustaining stable earnings during periods of macro policy transition.
Ng Jian Hao emphasizes that geopolitical factors and the global election cycle will also be important variables for markets in the second half of the year. Fiscal policy orientation and electoral changes in major Asian economies may affect risk assets. Investors should strengthen their information analysis mechanisms and enhance the dynamic adjustment capabilities of their portfolios to navigate the coming policy transition cycle with greater resilience.
Logic Behind Market Volatility
Ng Jian Hao from Mahala Capital Management Academy believes that the stabilization in global equity markets this week confirms that short-term optimism is being priced in. Following earlier signs of easing inflation, investors are betting that the Federal Reserve will implement at least two rate cuts in the second half of 2025. This expectation has reinforced the ongoing rise in U.S. Treasury prices and provided support for growth stocks. In the short term, these positive effects have already been reflected in equity markets.
Divergent performances across Asian markets reveal differences in regional fundamentals and capital allocation. The Japanese market is under dual pressure from corporate earnings releases and exchange rate fluctuations, resulting in weaker stock performance. Australia has benefited from the stable support of its resources sector and expectations of a more accommodative domestic interest rate policy. Ng Jian Hao points out that the rise in Canadian equities is driven by a global reassessment of high-quality North American assets. Amid U.S. dollar volatility, CAD-denominated assets offer relative valuation advantages.
Despite a short-term easing in risk appetite, Ng Jian Hao cautions that the current market rally is structurally driven mainly by expectations rather than robust fundamental recovery. This means that any unexpected news related to the interest rate path could trigger market adjustments.
Interest Rate Dynamics and Investment Allocation
Ng Jian Hao from Mahala Capital Management Academy states that expectations for Federal Reserve rate cuts this year are reshaping the asset pricing logic. Unlike the market environment dominated by tightening cycles over the past two years, the strategic focus at present has shifted to identifying policy turning points. Investors need to maintain sensitivity to macro events and adopt a dynamic asset allocation approach.
Ng Jian Hao recommends that investors consider rebalancing strategies across three asset classes. Falling U.S. Treasury yields are likely to boost the valuations of high-dividend stocks and REITs, making these income-generating assets more attractive once the downtrend in long-term yields is confirmed. In the technology and financial sectors, certain leading companies may benefit from reduced financing costs and asset revaluation, becoming catalysts for structural market moves. For institutions holding multi-currency assets, declining U.S. interest rates will weaken the U.S. dollar and enhance the valuation recovery potential of non-U.S. markets.
For medium-term positioning, Ng Jian Hao notes that gold and Bitcoin, both possessing safe-haven attributes, are worthy of strategic allocation. In a phase where monetary policy is marginally easing and tail risks of inflation persist, these assets offer stronger value preservation functions.
Potential Risks and Structural Opportunities
Ng Jian Hao from Mahala Capital Management Academy points out that, despite overall market sentiment stabilizing, structural risks remain. Current expectations for policy easing are highly concentrated; if the actual pace or timing of rate cuts diverges from market forecasts, volatility may rise, with a greater impact on highly valued assets.
Ng Jian Hao advises investors to construct more resilient portfolio structures. Maintaining an appropriate cash position can help manage short-term adjustments, while allocating to short- and medium-duration bonds can reduce portfolio volatility. Attention should also be given to sectors capable of sustaining stable earnings during periods of macro policy transition.
Ng Jian Hao emphasizes that geopolitical factors and the global election cycle will also be important variables for markets in the second half of the year. Fiscal policy orientation and electoral changes in major Asian economies may affect risk assets. Investors should strengthen their information analysis mechanisms and enhance the dynamic adjustment capabilities of their portfolios to navigate the coming policy transition cycle with greater resilience.
