Global Market Quick Take: Asia – December 28, 2023 Global Market Quick Take: Asia – December 28, 2023 Global Market Quick Take: Asia – December 28, 2023

Global Market Quick Take: Asia – December 28, 2023

Macro 5 minutes to read
Redmond Wong

Chief China Strategist

Summary:  US Treasuries rallied, with the 10-year yield dropping by 10 bps to settle at 3.79%. The S&P 500 inched up 0.1%, approaching its record close of 4,797 from January 2022. The Hang Seng Index rebounded 1.7% to 16,625, driven by the recovery of online and mobile gaming stocks and the advancement of EV stocks. USDJPY extended losses amid falling US Treasury yields, the BoJ's lower limit for bonds, and Japan's stronger-than-expected retail sales and industrial production. Crude oil retreated, but copper and gold experienced gains.


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

US Equities: The S&P 500 edged up 0.1% to 4,782, propelling toward its record close of 4,797 in January 2022. Among the 11 S&P 500 sectors, healthcare, real estate, and consumer staples outperformed. Meanwhile, energy stocks declined as crude oil retreated. The Nasdaq 100 gained 0.2%, finishing at 16,907. The New York Times rose 2.9% after the publishing company filed a copyright infringement lawsuit against Microsoft and OpenAI. Tesla added 1.9% based on an analyst report suggesting strong delivery and price stabilization.

Fixed income: Treasuries rallied steadily throughout the Wednesday session in New York, with the 10-year yield dropping by 10 bps to settle at 3.79%, the lowest level since July. The auction of $58 billion 5-year notes met robust demand and was awarded at 3.801%, which was lower than the 3.815% traded at the auction deadline. The bid-to-cover ratio was 2.50 times, up from 2.46 times in the previous auction.

China/HK Equities: After a softer tone from the regulators and approval of a batch of new domestic games, online and mobile gaming stocks rallied. NetEase surged 11.9%, Bilibili rose 6.7%, and Tencent gained 4.0%. Nio soared 12.2% after the EV maker unveiled an executive sedan with a starting price of RMB800k. The rise in China’s industrial profits by 29.5% Y/Y in November helped lift sentiment. The Hang Seng Index rebounded 1.7% to 16,625. In the mainland, CSI300 rose 0.4%, led by computing, financials, and farming. Market chatters speculated if Central Huijin, an investment arm of the Chinese government, was once again increasing its stake in the four largest Chinese banks.

FX: DXY, the dollar index fell by 0.5% as both EURUSD and GBPUSD rose by 0.6% against the greenback. USDJPY extended its losses due to a combination of falling US Treasury yields, the BoJ setting a lower limit for some bonds in its bond-buying operation in Q1 2024, and stronger-than-expected retail sales and industrial production in Japan. USDJPY dropped to 141.30 in early Asian trading on Thursday.

Commodities: Crude oil consolidated its recent rally and retreated, with WTI crude falling by 1.9% to $74.1 and Brent crude dropping 2.1% to $79.3. Shipping companies are resuming transit through the Red Sea after a temporary suspension prompted by militia attacks on vessels. A US-led multinational operation is patrolling the Red Sea with the aim of safeguarding commercial shipping. According to data from the American Petroleum Institute, US crude inventories increased by 1.837 million barrels last week. Meanwhile, copper rose by 1.5% to $3.96 per pound, and gold extended gains by 0.5% to $2,077.

Macro:

  • Japan’s retail sales increased by 5.3% Y/Y in November, surpassing 5.0% forecasted and up from 4.1% (revised) in October. On month-on-month basis, retail sales increased by 1% versus 0.5% expected and -1.7% in the prior month. Industrial production also came in better than expected, showing a smaller decline of -1.4% Y/Y in November versus -2.1% expected but weaker than the +1.1% Y/Y in October.
  • The US Richmond Fed Manufacturing Index came in at -11 in December, which is softer than the expected -3 and down from -5 in November.
  • China’s industrial production increased by 29.5% Y/Y in November, accelerating from the 2.7% Y/Y in October. This marks the fourth consecutive month of year-on-year growth.
  • China’s Emerging Industries PMI declined to 49.8 in December from 54.7 in November.
  • According to Wind, new home sales in 21 major Chinese cities during the period from Dec 1 to 26 declined by 39.7% from the pre-COVID level in 2019.

Macro events:  US Jobless Claims, US Pending Home Sales, US Wholesale Inventories, Japan Industrial Production (Nov), Japan Retail Sales (Nov).

In the news:

  • Apple Resumes Sale of Watch Models After Appeals Court Lifts Ban (Bloomberg)
  • Oil drops almost 2% as investors monitored developments in the Red Sea, where shippers are returning despite further attacks (Reuters)
  • NY Times sues OpenAI, Microsoft for infringing copyrighted works (Reuters)
  • Year-End Money-Markets Angst on Fed Exit Echoes 2018 Crunch (Bloomberg)
  • Trump can remain on Michigan primary ballot, state supreme court rules (Politico)

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

For a global look at markets – go to Inspiration.

 

Disclaimer

Saxo Capital Markets (Australia) Limited prepares and distributes information/research produced within the Saxo Bank Group for informational purposes only. In addition to the disclaimer below, if any general advice is provided, such advice does not take into account your individual objectives, financial situation or needs. You should consider the appropriateness of trading any financial instrument as trading can result in losses that exceed your initial investment. Please refer to our Analysis Disclaimer, and our Financial Services Guide and Product Disclosure Statement. All legal documentation and disclaimers can be found at https://www.home.saxo/en-au/legal/.

The Saxo Bank Group entities each provide execution-only service. Access and use of Saxo News & Research and any Saxo Bank Group website are subject to (i) the Terms of Use; (ii) the full Disclaimer; and (iii) the Risk Warning in addition (where relevant) to the terms governing the use of the website of a member of the Saxo Bank Group.

Saxo News & Research is provided for informational purposes, 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. No representation or warranty is given as to the accuracy or completeness of this information. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. No Saxo Bank Group entity shall be liable for any losses that you may sustain as a result of any investment decision made in reliance on information on Saxo News & Research.

To the extent that any content is construed as investment research, such 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.

None of the information contained here constitutes an offer to purchase or sell a financial instrument, or to make any investments.Saxo Capital Markets does not take into account your personal investment objectives or financial situation and makes no representation and assumes no liability as to the accuracy or completeness of the information nor for any loss arising from any investment made in reliance of this presentation. Any opinions made are subject to change and may be personal to the author. These may not necessarily reflect the opinion of Saxo Capital Markets or its affiliates.

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

Saxo Capital Markets (Australia) Limited
Suite 1, Level 14, 9 Castlereagh St
Sydney NSW 2000
Australia

Contact Saxo

Select region

Australia
Australia

The Saxo trading platform has received numerous awards and recognition. For details of these awards and information on awards visit www.home.saxo/en-au/about-us/awards

Saxo Capital Markets (Australia) Limited ABN 32 110 128 286 AFSL 280372 (‘Saxo’ or ‘Saxo Capital Markets’) is a wholly owned subsidiary of Saxo Bank A/S, headquartered in Denmark. Please refer to our General Business Terms, Financial Services Guide, Product Disclosure Statement and Target Market Determination to consider whether acquiring or continuing to hold financial products is suitable for you, prior to opening an account and investing in a financial product.

Trading in financial instruments carries various risks, and is not suitable for all investors. Please seek expert advice, and always ensure that you fully understand these risks before trading. Saxo Capital Markets does not provide ‘personal’ financial product advice, any information available on this website is ‘general’ in nature and for informational purposes only. Saxo Capital Markets does not take into account an individual’s needs, objectives or financial situation. The Target Market Determination should assist you in determining whether any of the products or services we offer are likely to be consistent with your objectives, financial situation and needs.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the US and other countries. AppStore is a service mark of Apple Inc.

The information or the products and services referred to on this website may be accessed worldwide, however is only intended for distribution to and use by recipients located in countries where such use does not constitute a violation of applicable legislation or regulations. Products and Services offered on this website is not intended for residents of the United States and Japan.

Please click here to view our full disclaimer.