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 – November 16, 2023

Macro 5 minutes to read
Saxo Be Invested
APAC Research

Summary:  The Hang Seng Index surged 3.9% on news of easing US inflation, PBoC's potential RMB1 trillion money printing for urban villages and affordable housing support, and a net RMB600 liquidity injection. In the US, better-than-feared retail sales and Target's earnings beat supported the equity market, but higher bond yields and tech stock softness pressured it. Nvidia fell 1.6% with Microsoft's new AI chip, while Cisco dropped 11% after lowering guidance. GBPUSD weakened post-weaker-than-expected UK CPI.

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

Market Data 2023-11-16

US Equities: On Wednesday, investors had their eyes on US consumers. A smaller-than-expected decline in retail sales and an earnings beat from Target provided support to the market, but higher bond yields and some softness in mega-cap technology stocks weighed on it. The S&P 500 gained 0.2% and the Nasdaq 100 edged up 0.1%. Target soared 17.8% after reporting an EPS of $2.1, surpassing the consensus of $1.47 by 43% due to margin expansion. Disney added 3.2%, with hedge fund ValueAct Capital taking an equity stake. Nvida slid 1.6% as Microsoft unveiled a competing AI chip. Cisco plummeted 11% in extended hours after lowering its FY2024 guidance due to a weak order book and inventory digestion issues.

Fixed income: Treasuries reversed a substantial portion of the post-CPI gains due to stronger-than-expected prints in retail sales and the Empire manufacturing index. Additionally, corporate issuance of around $13 billion also exerted pressure on the market. The 2-year and 10-year yields each increased by 8bps to 4.91% and 4.53% respectively.

China/HK Equities: The Hang Seng Index surged 3.9% in response to the cooling US inflation, discussions of a RMB1 trillion money printing by the PBoC to support urban village renovation and affordable housing programs, and a net RMB600 billion liquidity injection by the PBoC. Adding to the improved sentiment, China’s retail sales and industrial production grew faster than expected. The news that the USD 771 billion US Federal Retirement Thrift Investment Board decided to exclude China- and Hong Kong-listed stocks did not dent the sentiment. The strong upward movements in Hong Kong-listed stocks attracted FOMO (fear of missing out) buyers and lifted trading volume to the highest in the last two months. The CSI300 gained 0.7%.

FX: The USD pared some of its steep losses from Tuesday, but the move was modest with PPI and retail sales sending mixed messages. GBPUSD was the worst performer in the G10 after CPI came in weaker-than-expected. GBPUSD returned from 1.25 to trade just above 1.24. Higher Treasury yields brought USDJPY back above 151. Scandis outperformed, with NOK leading gains despite lower oil prices, and SEK following. AUDUSD staying supported at 0.65 and employment data on watch while NZDUSD stays above 0.60.

Commodities: Crude oil prices ended lower after mixed EIA inventory data for two-week period. The report showed that US commercial stockpiles of crude oil rose 17.5mn barrels over the past two weeks, but this was offset by fuel inventories declined suggesting refinery demand may be picking up after the maintenance season. Meanwhile, China data released saw the country's oil refinery throughput in October ease from the prior month's highs amid weakening industrial fuel demand and narrowing refining margins. Iron ore and copper were however in gains after China’s activity data showed some signs of stability and PBoC pumped the most cash since 2016 into the financial system.


  • The PBoC injected RMB600 liquidity as the Chinese central bank lent out RMB1.45 trillion under its 1-year medium-term lending facility, exceeding the necessary amount to roll over RMB850 billion in maturing loans at 2.5%, which remained unchanged.
  • China’s retail sales growth accelerated to 7.6% Y/Y in October (vs consensus: 7.0%) from the prior month’s 5.5%. Industrial production increased by 4.6% Y/Y, surpassing the street forecast of 4.5% and September’s 4.5%. The growth rates in the manufacturing and mining sectors picked up in October. Fixed assets investment growth slowed to 1.3% Y/Y in October from 2.5% in September.
  • US retail sales fell 0.1% m/m in October, less than the 0.3% expected, suggesting consumption trends held up ahead of the holiday season. Gas sales declined less than expected, down only 0.3% despite a near 6% fall in prices. The control group, which feeds into GDP, was in-line with expectations at +0.2% m/m.
  • October US headline PPI fell 0.5% m/m, a big surprise against the expected 0.1% rise, and down from the prior month's 0.5% rise amid a plunge in energy prices, mostly in the gasoline segment but also electricity prices. PPI rose 1.3% y/y, also well beneath the expected +1.9% and down from the prior +2.2%. Core PPI was flat m/m beneath the expected and prior +0.3%, with the core y/y rising 2.4%, beneath the prior and expected 2.7%.
  • Fed's Daly (2024 voter), in an FT interview, noted that data is showing further deceleration in inflation and it is "very, very encouraging" and indicative of effective Fed policies. However, the San Fran Fed President refuses to rule out another interest rate hike and stresses that rate cuts are "not happening for a while".
  • UK CPI for October dropped to 4.6% y/y from 6.7% previously, coming in below consensus expectation of 4.7% and BOE’s own forecast of 4.8%. The decline in household energy prices was the biggest contributor, while services inflation also fell from 6.9% y/y to 6.6%. Report signals that energy has helped to bring inflation down, but the battle has not been won and BOE will need to keep rates high for a considerable time.

Macro events: Australia Employment (Oct), Chinese House Prices (Oct)


  • Tencent earnings beat, revenue in line: Tencent’s Q3 revenue increased by 10% Y/Y to RMB154.6 billion, aligning with analyst projections. Although online gaming and online ads revenue fell short of expectations, Video Account (VA) ads revenue exceeded predictions. Non-GAAP net profit surged by 39% to RMB44.9 billion, surpassing the consensus forecast by 12.4%, attributed to margin expansion. Tencent’s net margin increased to 29.1% in Q3 from Q2’s 25.2% and the prior-year quarter’s 23.0%.
  • JD.Com earnings beat, revenue in line: JD.COM reported a 2% Y/Y increase in Q3 revenue to RMB247.7 billion, meeting expectations. Non-GAAP net income increased by 6% Y/Y to RMB10.6 billion, contrary to the consensus forecast of a decline.

Earnings Event: Walmart, Alibaba, Applied Materials, Siemens, Copart, Ross Stores, Warner Music, Lenovo, NetEase

In the news:

  • Cisco stock plunges on light guidance after product order slowdown (CNBC)
  • Microsoft introduces its own chips for AI, with eye on cost (Reuters)
  • Biden, Xi Jinping meet amid disputes over military, economic issues (Reuters)
  • Taiwan’s opposition KMT, TPP, the two mainland-friendly parties, agree to joint ticket in presidential race (SCMP)
  • US federal pension fund to exclude Hong Kong and China investments (Financial Times)
  • Hamas agrees to tentative deal to free dozens of hostages, pending Israel’s approval (Washington Post)
  • Target shares jump more than 17% after retailer posts big earnings beat, even as sales fall again (CNBC)



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

For a global look at markets – go to Inspiration.


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