Global Market Quick Take: Asia – November 21, 2023

US Equities: The Nasdaq 100 surged by 1.2% to reach 16,027, achieving a 22-month high. Microsoft contributed to this rise, climbing by 2.1% to reach a record high following the announcement of OpenAI's Sam Altman joining the company. Additionally, Nvidia saw a 2.3% increase in anticipation of its earnings announcement scheduled for Tuesday. The S&P500 gained 0.7%. All eyes are on Nvidia's results today, with the Bloomberg survey forecasting a 480% year-over-year surge in Nvidia's adjusted EPS to $3.365 and a 171% increase in revenue.

Fixed income: A strong 20-year auction saw the 10-year and 30-year yields 2bps lower to 4.42% and 4.56%. The 2-year yield rose 3bps to 4.91. Richmond Fed Barkin (non-voter) said the Fed’s job was not done. The Treasury is scheduled to auction $15 billion 10-year TIPS on Tuesday.

China/HK Equities: China Internet stocks and consumer staples names rebounded, driving the Hang Seng Index 1.9% higher. The Hang Seng Tech Index gained 2.4%, with Tencent rising 3.6%. XPeng surged 5.1% after unveiling a 7-seater MPV model X9. After the market close, Xiaomi reported in-line revenue growth of 1% Y/Y to RMB70.9 billion while adjusted net income increased by 183 % Y/Y to RMB6 billion, surpassing the estimate of RMB4.7 billion, due to record-high gross margins.

FX: The dollar extended its slide at the start of the new week, with DXY index breaking and closing below its 200DMA at 103.62. Bears seem to stay in control, but RSI is reaching oversold conditions and next key support is at 103 or the 61.8% retracement levels at 102.55. FOMC minutes due today will be skimmed for any further dovish hints. NOK was the outperformer in G10 again with oil prices extending gains, and USDJPY also extended its slide to sub-148.50. AUDUSD moved higher to 0.6560 ahead of RBA minutes due later and 200DMA at 0.6590 may be coming in focus. AUDNZD also finding support at 1.0850. EURUSD testing 61.8% retracement level at 1.0960 and break above could open doors to 1.10 but the move has been fast and remains prone to a correction first. GBPUSD finding it hard to move above 1.25 while USDCAD unable to break below 1.37 despite oil price gains. EURCAD above 1.50 and could target 2023 highs at 1.5113.

Commodities: Crude oil prices extended gains further on Monday, with Brent reaching $82/barrel, on hopes of additional OPEC+ production cuts along with an extension of Saudi Arabia’s voluntary cuts being extended to 2024. Copper and iron ore prices rose further amid USD weakness and hopes of China stimulus, while supply issues also underpinned with shutdown warnings at First Quantum’s Panama copper mine and strikes in Peru. Gold however remains depressed.

Macro:

• The US leading index for October fell 0.8%, slightly more than the prior and expected -0.7%. Fed's Barkin (2024 voter) said it is not a big time for offering forward guidance, saying the Fed will be data dependent; said core inflation numbers are "coming down nicely", but a lot of that is for goods. FOMC minutes due in the day ahead will be dig for any further dovish hints by Fed members.
• BoE Governor Bailey was on the wires after the London close and said it is far too early to be thinking about rate cuts, saying returning inflation to target is "absolute priority" and will take no chances when inflation is high. The Governor further added that interest rates will have to stay high enough for long enough to make sure the bank gets all the way back to the 2% target, and the BoE must watch for further signs of inflation persistence that may require interest rates to climb again.

Macro events: FOMC Minutes (Nov), RBA Minutes (Nov), UK PSNB (Oct), Canada CPI (Oct)

Earnings: Nvidia (preview here), Lowe’s, Baidu, Medtronic, Analog Devices, Dell, Autodesk, Kingsoft, Kuaishou, iQIYI

In the news:

• Nearly All of OpenAI Staff Threaten to Follow Altman to Microsoft If Board Doesn't Quit (Bloomberg)
• China Drafts List of 50 Property Firms Eligible for Funding (Bloomberg)
• Biden approval rating ticks up as voters rank stronger economy: Poll (The Hill)
• Chinese financial watchdog warns of risks as Premier Li takes helm (Reuters)

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

For a global look at markets – go to Inspiration.