Global Market Quick Take: Asia – September 11, 2024 Global Market Quick Take: Asia – September 11, 2024 Global Market Quick Take: Asia – September 11, 2024

Global Market Quick Take: Asia – September 11, 2024

Macro 6 minutes to read
APAC Research

Key points:

  • Equities: Oracle rallied 11.5% after beating earnings estimates
  • FX: Canadian dollar hurt by steep falls in crude
  • Commodities: WTI and Brent crude hit lowest levels since 2021
  • Fixed income: Yield curve bull steepens
  • Economic data: US CPI, UK July GDP
 

------------------------------------------------------------------

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

Disclaimer: Past performance does not indicate future performance.

In the news:

  • US stock futures inch lower with CPI data, Harris-Trump debate on tap (Investing)
  •  Fed's upcoming projections to signal deeper cuts than previously expected: Citi (Investing)
  •  JPMorgan stock slumps as interest income warning rattles market (Investing)
  •  GameStop reports fall in revenue, files for 20 million share offering (Investing)
  •  Oil prices tumble on growth worries, stocks diverge (Yahoo)
  • Oracle shares jump as AI push perks up cloud demand (Reuters)

Macro:

  • UK labor data came in mixed with average weekly wages cooling to 4.0% YoY for the 3 months to July, softer than 4.1% expected and 4.6% prior (revised higher from 4.5%). However, the unemployment rate dipped to 4.1% in July from 4.2% prior as expected while the job growth at 265k was stronger than 97k prior and 123k expected. The data is not weak enough to prompt a cut from Bank of England next week and hasten the pace of rate cuts.
  • US CPI preview: As the Federal Reserve shifts focus from inflation to the labour market and prepares for an interest rate cut next week, US inflation remains above the Fed’s target, with headline inflation at 2.9% YoY and core inflation at 3.2%YoY as of JulyWhile headline inflation is expected to drop to 2.5% in August, core inflation is expected to stay steady, suggesting persistent inflationary pressures. To read a full preview of US inflation due today, go to this article.

Macro events: UK GDP Estimate (Jul), US CPI (Aug)

Earnings: Manchester United, Tsakos Energy, Oxford, Lesaka

Equities: US stocks ended mixed on Tuesday as investors geared up for a key inflation report tonight that could shape the Federal Reserve's next interest rate moves. The S&P 500 rose by 0.4%, logging its second consecutive day of gains, while the Dow Jones slipped by 92 points due to significant declines in banking stocks. JPMorgan dropped 5.2% after lowering its 2025 net interest income forecast, and Goldman Sachs fell 4.4% following weak trading revenue projections. Tech stocks offered some support, with Nvidia (+1.5%), Microsoft (+2.1%), and Amazon (+2.4%) driving a 0.9% increase in the Nasdaq 100. Oracle shares jumped 11.5% after beating earnings estimates and securing a deal with Amazon Web Services. However, Apple dipped 0.3% after losing a court case over its $14 billion tax dispute in Ireland. Political events also added to market uncertainty, with Kamala Harris and Donald Trump set to participate in their first televised debate at 9pm ET.

Fixed income: Treasury futures held steady as investors awaited US inflation data and the Trump-Harris debate. The yield curve bull-steepened as WTI crude futures fell by up to 5%. The 10-year yield dropped 6bps, while the German 10-year yield declined 4bps. A three-year note sale had a high yield 1.7bps below the when-issued yield, indicating strong demand. Treasuries rose sharply as oil prices declined and regulators proposed less-onerous capital requirements. The three-year note auction drew strong demand despite its low yield, boosting sentiment for upcoming 10- and 30-year offerings. Yields were richer by 4bps-6bps led by front-end and intermediate tenors. The 10-year yield ended around 3.645%, near the day's lows, outperforming the German 10-year by 1.5bps. The $58 billion three-year note auction at 1pm was awarded at 3.440%, the lowest since August 2022 and about 1.7bps below expectations.

Commodities: Gold rose by 0.41% to $2,516, driven by a risk-off sentiment in equities and oil, and declining yields ahead of the CPI release and the Fed meeting. WTI crude futures dropped by 4.31% to $65.75, the lowest since December 2021, due to investor concerns despite Tropical Storm Francine's impact. Brent crude also fell by 3.69% to $69.49, marking its lowest close since December 2021. OPEC has slightly reduced its oil-demand growth forecast, now expecting demand to grow by 2.03 million barrels per day this year and 1.74 million barrels per day in 2025, down from previous estimates of 2.11 million and 1.78 million barrels per day, respectively. Total demand is projected to reach 104.2 million barrels per day in 2024 and 106 million barrels per day in 2025.

FX: The US dollar remained in a tight range in Tuesday’s session as focus turns to US presidential debate and the inflation print due later today. Low yielding currencies such as Japanese yen and Swiss franc outperformed the major currencies once again, given a sharp fall in Treasury yields helped to close the rate differentials with the US, making these currencies more attractive. Meanwhile, the Canadian dollar was the underperformer, weighed by steep selling in the crude complex. Bank of Canada governor Macklem’s dovish comments further added to the pressure on CAD, especially as markets are questioning the odds of a 50bps cut from the Fed next week. Other activity currencies were more mixed, with Kiwi dollar and British pound closing higher but Australian dollar weighed down by China deflation concerns and the fallout in commodity prices.

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.