JPMorgan Trims EM Currency Call as HSBC Cuts Big U.S. Banks

JPMorgan Chase & Co. cut its recommended exposure to emerging-market currencies to marketweight from overweight, signaling a more defensive stance toward developing-nation foreign-exchange markets. The bank’s research team did not detail individual currencies but said the shift reflects a reassessment of relative returns after recent gains in higher-yielding assets. In a separate move, HSBC Holdings Plc downgraded shares of JPMorgan to Reduce from Hold and lowered its view on Goldman Sachs Group Inc. to the same level while trimming Bank of America Corp. to Hold from Buy. HSBC said the sector’s post-rally valuations leave an "unattractive risk-to-reward profile" even as underlying fundamentals remain solid. The cuts come with major U.S. bank stocks trading near record highs.