Global Market Quick Take: Asia – January 10, 2024

US Equities: The Nasdaq 100 climbed 0.2% to 16,679. Nvidia extended its gains, reaching as high as $543.25 before settling at $522.53, up 1.7% on Tuesday. Alphabet rose 1.4% to $142.56. However, Tesla shed 2.3% as the EV maker lowered driving-range estimates on some models. Meanwhile, the S&P 500 slid 0.2% to 4,557. Juniper Networks surged 21.8% after Hewlett Packard Enterprises announced it would pay $40 a share in cash for the internet infrastructure solutions provider.

Fixed income: Treasury yields slid 1-2 bps across the curve, with the 10-year yield settling at 4.01, down 2 bps from Monday. Trading was lackluster within narrow ranges as traders awaited the CPI data scheduled for Thursday.

China/HK Equities: While the CSI300 Index modestly rebounded by 0.2% from its lows, the Hang Seng Index extended its decline by 0.2% to 16,190 in a streak of six consecutive days of losses. Tencent fell 1.5% after announcing the imposition of a 16-hour limit on underage users over the Winter holidays. JD.COM lost 3.2% after revealing that the company is investigating potential overstatements of revenues in its unit. Lenovo rose 4.5% after announcing its plan to unveil over 40 AI devices and solutions at the Consumer Electronics Show this week. Xtep gained 3.5% after reporting Q4 results in line with previous guidance while expressing caution about sales growth in 2024.

FX: The dollar pared Monday’s decline after 102 level held up in DXY, with little data and focus remaining on the US CPI release due on Thursday. AUD lagged, reversing the post-retail sales gains from the Asian session. AUDUSD fell below the 0.67 handle to re-test last 2 days of lows at 0.6677. USDJPY rose back to 144.50, extending gains with the miss in labor cash earnings this morning, and 10-year JGB auction will be on the radar today. EURUSD tested support at 1.0910 with German data disappointing. GBPUSD also reversed to test the 1.27 handle support but bounced higher.

Commodities: Oil prices recovered some of Monday’s losses with WTI back above $72 and Brent back near $78. API inventories showed a fall in inventories by 5.2mn barrels last week. Meanwhile, EIA’s STEO raised the forecast for 2024 world oil demand growth by 50k barrels per day, outrunning supply by a modest 120k barrels per day. Geopolitical and supply concerns continued. Copper rallied initially on hopes of China’s RRR cut but could not sustain the momentum and slid 1.4%.

Macro:

• US NFIB small business optimism rose slightly to 91.9, a 5-month high, from expectations of 91.0. The increase was partly a reflection of holiday sales but index remains subdued by historical standards.
• Sharp miss in German industrial production again highlighted concerns of Eurozone recession. November industrial production came in at -0.7 MoM from +0.3% expected and -0.3% last.
• Japan’s labor cash earnings came in below expectations at 0.2% YoY from +1.5% previously and expected. Real cash earnings was -3.0% YoY, much deeper than 2% drop expected by consensus, and may add to reasons for BOJ to continue to postpone a pivot.

Macro events: US Wholesale Inventories (Nov, final), China Aggregate Financing (Dec; to be released between Jan 10-15), France Industrial Production (Nov), Italy Retail Sales (Nov)

Earnings: J Sainsbury, KB Home

In the news:

• Tesla lowers range estimates as U.S. regulators tighten vehicle-test rules (Reuters)
• SEC X Account Compromised to Falsely Say Bitcoin ETFs Approved (Bloomberg)
• With Trump present in court, judges express skepticism of claims that he’s immune from prosecution (AP)
• Boeing CEO admits mistake as investigators probe midair panel blowout (CNBC)
• Amazon’s Twitch to Cut 500 Employees, About 35% of Staff (Bloomberg)
• JD.Com's Dada identifies 'suspicious practices' in internal audit (Reuters)

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

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