HSBC Upgrades Developed-Market Government Bonds to Overweight, Cuts Equities to Neutral

HSBC's swing from maximum underweight to overweight in developed-market government bonds is a notable reversal, implying the firm sees the prior selloff as stretched rather than fundamentally justified. The simultaneous cut to neutral on equities signals a rotation in risk appetite rather than a wholesale bearish call. The three flagged themes — Middle East and oil, a possible Fed hawkish pivot, and hyperscaler free cash flow — are worth tracking as the pillars of this view; whether the expected Fed turn in the first half materializes is the open question that would validate or undercut the bond overweight.