Global Market Quick Take: Asia – January 9, 2024 Global Market Quick Take: Asia – January 9, 2024 Global Market Quick Take: Asia – January 9, 2024

Global Market Quick Take: Asia – January 9, 2024

Macro 5 minutes to read
APAC Strategy Team

Summary:  Nasdaq 100 rallied 2% led by gains in Nvidia which launched new chips, although Dow lagged underpinned by a slide in Boeing. Treasury yields slipped amid a dip in US inflation expectations, and that resulted in a softer dollar with gains led by JPY. Oil unwound last week’s gains on demand concerns. Reports suggested that China is likely to cut RRR again, and that could bring HK stocks, AUD and metals in focus today in the Asian session.


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

US Equities: The Magnificent Seven stroke back on Monday with all of them gaining more than 1%, led by a 6.4% jump in Nvidia. Ahead of the CES 2024 consumer electronics show officially starting today, Nvidia announced three new graphics chips with extra components and enhanced AI features for PC users. Additionally, the AI chip giants said four Chinese EV manufacturers will use its technology in their auto-driving platforms. The Nasdaq 100 rose 2.1% and the S&P 500 added 1.4%. Boeing plummeted 8.1% after US regulators ordering the grounding of over 170 Boeing 737 Max 9 jets after the accident over the weekend.

Fixed income: Boosted by falls in inflation expectations for the year ahead through the 5-year horizon in a New York Fed survey of consumers, Treasuries rallied modestly with yields falling around 1bp across the yield curve. Additionally, Fed Governor Bowman has toned down her previously relatively hawkish stance, saying inflation could fall further without additional rate hikes. The 10-year yield finished 2bp lower at 4.03%.

China/HK Equities: The Hang Seng Index plunged by 1.9%, showing notable weaknesses in China Internet, EV, catering, and insurance stocks. The Hang Seng Tech Index plummeted by 3%. XPeng tumbled by 7.8% after analysts revised down the EV maker’s earnings and margin forecasts. The CSI 300 dropped by 1.3%. As investors sought explanations for the poor performance, some attributed it to a Reuters report claiming that the China Securities Regulatory Commission (CSRC) lifted a ban on mutual funds' net selling of stocks, as funds needed to raise money to address increasing redemptions.The news that a Beijing court announced last Friday that it had deemed Zhongzhi insolvent and had accepted an application for liquidation of the shadow banking financial group added to the negative sentiments

FX: The dollar index came under some pressure on Monday, and the DXY index tested 102 amid slowing consumer inflation expectations from the NY Fed survey. USDJPY pushed below 144 on softer Treasury yields but recovered later. EURUSD attempted gains but was rejected at 1.0980, the 23.6% fibo retracement level from the December high. GBPUSD however surged to highs of 1.2767, remaining just shy of Friday’s high at 1.2770 break of which is now needed to reaffirm a bullish bias. USDNOK rose to fresh high of 10.42 with the slump in oil prices weighing on NOK.

Commodities: Oil prices saw a sharp slide of 4% on WTI, unwinding last week’s gains, as Saudi’s price cuts fuelled the demand weakness concerns. This comes despite attacks on shipping in the Red Sea by Houthi rebels continuing, along with supply outages in Libya. EIA’s outlook report will be eyed today, along with any further expectations of China’s RRR cut. Gold however continued to slide despite softer yields, and the 50DMA as well as 38.2% fibo retracement levels coinciding at $2,012 will be in focus. Metals will be on watch today amid reports of China cutting RRR.

Macro:

  • NY Fed's December consumer survey saw inflation expectations dip across the forecast horizons. One-year inflation expectations fell to 3% from 3.4% in November, the lowest since January 2021. Three-year inflation expectations fell to 2.6% from 3.0% and five-year inflation expectations fell to 2.5% from the prior month's 2.7%
  • Fed's Bostic, a 2024 voter, said the current pace of balance sheet normalization is appropriate and the Fed remains in a situation of ample reserves. He repeated his view for two 25bp rate cuts this year, with the first occurring sometime in Q3.
  • Japan’s Tokyo CPI for December showed some cooling from last month but remained well above target levels. Headline CPI cooled to 2.4% YoY from 2.7% last month while core CPI was at 2.1% from 2.3% YoY previously. Core core CPI remains a key concern as it was at 3.5% YoY for December from 3.6% previously. Data is broadly in-line with BOJ’s view that import-driven price pressures are cooling, and this would mean policy pivot will continue to be pushed forward.
  • In a review of its work for 2023, the People’s Bank of China confirmed, as previously reported by media, that it had increased the quota of the pledged supplemental lending (PSL) by RMB500 billion. As the amount of PSL having decreased through January to November in 2023 but increasing by RMB350 billion in December, there will be RMB150 billion yet to deploy in early 2024. Separately, the central bank hints on additional monetary supports to the real economy, including reductions in the reserve requirement ratio (RRR).

Macro events:  EIA STEO, German Industrial Output (Nov), US NFIB (Dec)

Earnings: Albertsons

In the news:

  • Nvidia Rolls Out New Chips, Claims Leadership of AI PC Race (Bloomberg)
  • China regulators lift stock net-selling ban for mutual funds due to redemption pressures on funds (Reuters)
  • China Hints at More Easing With Possible Reserve Ratio Cut (Bloomberg)
  • China Evergrande: key executive at EV unit arrested for unspecified crimes, 3 months after founder Hui Ka-yan’s detention (SCMP)
  • United finds loose bolts on several 737 MAX planes, raising pressure on Boeing (Reuters)
  • Samsung profit falls 35% in Q4 amid hope for recovery this year (Nikkei Asia)

 

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.