Pls use this Quick Take Asia 1142x160 Pls use this Quick Take Asia 1142x160 Pls use this Quick Take Asia 1142x160

Global Market Quick Take: Asia – December 5, 2023

Macro 5 minutes to read
Saxo-Strats
APAC Strategy Team

Summary:  Markets re-evaluated the pace of Fed rate cuts priced in for 2024, pushing Treasury yields higher and equities, especially Big Tech, lower. Dollar also reversed some of last week’s losses although JPY weakness remained measured, and focus today will be on RBA announcement, as well as US JOLTS jobs data and ISM services. China stocks closed at their lowest since 2019 and Caixin services PMI is due today. Bitcoin rose above 40k for the first time this year, pushing crypto stocks higher.


The Saxo Quick Take is a short, distilled opinion on financial markets with references to key news and events. 

MI 5 Dec 2023

US Equities: US major equity indices generally closed lower on Monday after last week’s peak rate narrative pushed them higher. Markets reconsidered whether aggressive rate cuts priced in for next year could be possible, and odds of a Q1 rate cuts slipped from 75% to 67%. Big tech was hit by the rise in Treasury yields, with Alphabet down close to 2% and Apple down about 1%. Meta fell more than 1% after CEO Mark Zuckerberg sold 680,000 of his shares in the company in November, according to a US Securities and Exchange Commission filing. Spotify’s layoff announcement saw it rose more than 7%, while Uber gained over 2% on reports that it will join the S&P 500 effective Dec 18. Crypto stocks such as Coinbase, Microstrategy and Riot Platforms rose 5-9% with Bitcoin crossing 40k for the first time this year.

Fixed income: Treasuries bear-flattened on Monday as markets were in consolidation after the rip higher seen following Powell’s comments and ISM manufacturing miss on Friday. 2yr yields ended about 10bps lower while 10yr yields slipped about 6bps. With Fed in a blackout ahead of its next decision, today’s JOLTS job openings and ISM services could be key.

China/HK Equities: China and Hong Kong stocks extended losses. Pharmaceutical stocks sold off, dragged down by Wuxi Biologics which was suspended from trading after plummeting 24% on warnings about the outlook. Online gaming and beverage stocks were also weak. EV stocks fell as the November shipment data showed flattish growth month-on-month. Changes in EV shipments were +0.1% to 301.4k at BYD, +1.5% to 41.0k at Li Auto, +0.2% to 20.0k at Xpeng, and -0.7% to 16.0k at NIO. Except for Li Auto, leading Chinese EV producers are still behind their full-year shipment targets. Focus today on Caixin services PMI.

FX: Dollar firmed up to start the week as Treasury yields rose and markets re-considered whether the extent of rate cuts priced in for next year could be possible. NOK underperformed amid lower oil prices, while AUD also retreated from 0.6680+ levels back to 0.66 handle ahead of RBA decision today. USDJPY rose back above 147 but EURJPY was steady around 159.50 as EURUSD pushed lower to test the 1.08 handle with little reaction to Lagarde’s speech. EUR bearish case is likely to build up here as noted in yesterday’s FX note.

Commodities: Broad selling seen in commodities yesterday amid a risk-off tone and dollar strength. Crude oil was down for a third consecutive day as Saudi Energy Minister Prince Abdulaziz bin Salman said OPEC+ oil production cuts can absolutely continue past the first quarter if needed. Gold touched all-time highs of $2,135/oz before reversing back to $2,020 as yields and dollar rebounded. Copper also closed back below 200DMA a $3.84 and next key support seen at $3.80.

Macro:

  • US factory orders fell more than expected in October, dropping 3.6%, flipping from a downwardly revised 2.3% gain in September.
  • Japan’s Tokyo CPI cooled considerably with the headline out at 2.6% YoY vs. prev. 3.2% YoY and expected 3.0%. Core CPI slowed to 2.3% YoY from 2.7% previously but core-core measures, although cooled to 3.6% from 3.8%, but remained well above the BOJ’s 2% target.

Macro events: RBA Policy Announcement; Chinese Caixin Services PMI (Nov), EZ/UK/US Composite/Services Final PMI (Nov), EZ Producer Prices (Oct), US ISM Services PMI (Nov), US JOLTS Job Openings

In the news:

  • Spotify to cut 1,500 jobs in third layoff round this year, shares jump (Reuters)
  • Bitcoin Surges Past $42,000 Even as Stocks and Bonds Take a Hit (Bloomberg)
  • COP28 Latest: Kerry Tells Big Emitters They Can No Longer Hide (Bloomberg)
  • US funding for Ukraine set to run out by end of the year, White House warns (FT)

For all macro, earnings, and dividend events check Saxo’s calendar.

For a global look at markets – go to Inspiration.

Disclaimer

The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
Full disclaimer (https://www.home.saxo/legal/disclaimer/saxo-disclaimer)
Full disclaimer (https://www.home.saxo/legal/saxoselect-disclaimer/disclaimer)

Saxo Bank A/S (Headquarters)
Philip Heymans Alle 15
2900
Hellerup
Denmark

Contact Saxo

Select region

International
International

Trade responsibly
All trading carries risk. Read more. To help you understand the risks involved we have put together a series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. Read more

This website can be accessed worldwide however the information on the website is related to Saxo Bank A/S and is not specific to any entity of Saxo Bank Group. All clients will directly engage with Saxo Bank A/S and all client agreements will be entered into with Saxo Bank A/S and thus governed by Danish Law.

Apple and the Apple logo are trademarks of Apple Inc, registered in the US and other countries and regions. App Store is a service mark of Apple Inc. Google Play and the Google Play logo are trademarks of Google LLC.