Global Market Quick Take: Asia – October 17, 2023 Global Market Quick Take: Asia – October 17, 2023 Global Market Quick Take: Asia – October 17, 2023

Global Market Quick Take: Asia – October 17, 2023

Macro 5 minutes to read
Charu Chanana

Head of FX Strategy

Summary:  Haven bids retreated with diplomatic efforts in the Middle East, although risks remain amid warnings from Iran. Equities rallied, while bonds, dollar, oil and gold fell. NZDUSD retreated from the post-election highs as Q3 CPI came-in below expectations. Focus turns to US retail sales today and a slew of corporate earnings.


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

US Equities: Wall Street ended the day higher as risk sentiment improved amid efforts from US and its allies to contain the spread of the Middle East conflict. The S&P 500 was up 1.1% while NASDAQ 100 rose 1.2% despite the higher Treasury yields. Most big tech rose, excluding Apple which was under pressure due to worries of weaker iPhone 15 sales in China. Lululemon rose 10% with its expected addition to S&P 500, replacing Activision Blizzard.

Fixed income: Treasuries were one-again in bear-steepening mode as the safe haven bid eased. Fed speak could continue to be a key driver this week before the blackout period ahead of the November FOMC meeting. 2-year yields were up 4.5bps while 10-year rose 9bps.

China/HK Equities: China and HK stocks remained in negative territory to start the week amid concerns from US expanding tech curbs. Both Hang Seng and CSI 300 dropped 1%. China’s the PBoC also left the 1-yr MLF rate on hold at 2.5%, in line with the consensus, likely setting up another month of no change for LPRs on Friday.

FX: The dollar was weaker on Monday as it reversed last week’s gains on hopes of a diplomatic push in the Middle East. NZDUSD reversed all of yesterday’s gain as Q3 CPI came in below expectations, and dropped back below 0.59 as we wrote in our FX note yesterday – test of YTD low at 0.5859 likely. AUDUSD traded above 0.6340 and EURUSD rose above 1.0550. USDJPY still stuck around 149.50 despite a jump higher in yields, with 150 serving as a clear intervention threat area.

Commodities: Oil prices dropped by over 1% as fears of an escalation in Israel conflict retreated. Report suggesting that the US may ease sanctions on Venezuela also underpinned. Gold eased slightly from highs of $1932.90 on Friday amid profit taking. Base metals, especially copper and iron ore, could be looking ahead to China’s data dump on Wednesday.

Macro:

  • US Empire State manufacturing index fell less than expected in October to -4.6 from 1.9 prior and -6.0 expected. New orders and shipments dropped to -4.2 (prev. +5.1) and +1.4 (prev. +12.4), respectively.
  • Fed’s Harker said a ‘resolute, but patient’ stance is appropriate, and that the Fed can hold rates steady absent a sharp turn in the data. Goolsbee told the FT that improving inflation was a trend not a blip.
  • NZ CPI came below expectations. Q3 CPI came in at 5.6% YoY, down from 6.0% YoY prior and 5.9% expected. This was also lower than RBNZ’s projection of 6.0%. Falling inflation could provide comfort to RBNZ, and probability of another rate hike by the end of the year dropped from over 30% to 10%.

Macro events: RBA Minutes, German ZEW Survey (Oct), US Retail Sales (Sep) exp 0.3% MoM vs. 0.6% prior, Canada CPI (Sep) exp. 4.0% YoY vs. 4.0% prior

In the news:

  • Diplomats renew calls for Gaza aid; Iran warns Israel (Reuters)
  • Biden Set to Visit Israel Wednesday to Show Solidarity With Ally (Bloomberg)
  • Country Garden Enters Final Hours to Avoid First Bond Default (Bloomberg)
  • Ford chair warns extended strike will boost Tesla, Toyota and China (FT)
  • Netflix may hike prices after success of password-sharing crackdown (Reuters)

 

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

For a global look at markets – go to Inspiration.

Quarterly Outlook 2024 Q3

Sandcastle economics

01 / 05

  • Macro: Sandcastle economics

    Invest wisely in Q3 2024: Discover SaxoStrats' insights on navigating a stable yet fragile global economy.

    Read article
  • Bonds: What to do until inflation stabilises

    Discover strategies for managing bonds as US and European yields remain rangebound due to uncertain inflation and evolving monetary policies.

    Read article
  • Equities: Are we blowing bubbles again

    Explore key trends and opportunities in European equities and electrification theme as market dynamics echo 2021's rally.

    Read article
  • FX: Risk-on currencies to surge against havens

    Explore the outlook for USD, AUD, NZD, and EM carry trades as risk-on currencies are set to outperform in Q3 2024.

    Read article
  • Commodities: Energy and grains in focus as metals pause

    Energy and grains to shine as metals pause. Discover key trends and market drivers for commodities in Q3 2024.

    Read article
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.