APAC Market Digest Feb 17: Better than expected news lifts markets, but a new cycle is ahead APAC Market Digest Feb 17: Better than expected news lifts markets, but a new cycle is ahead APAC Market Digest Feb 17: Better than expected news lifts markets, but a new cycle is ahead

APAC Market Digest Feb 17: Better than expected news lifts markets, but a new cycle is ahead

Equities 8 minutes to read
Jessica Amir

Market Strategist

Summary:  Better than expected company and economic news lifts global markets. We dissect what people are buying today, the potential investment opportunities ahead, and cover the uncertainties, plus what you need to consider before Australia and the US enter a new cycle with rates rising for the first time in 13 years. APAC considerations and ideas below

Written by APAC Strategists Jessica Amir in Australia and Redmond Wong in Hong Kong.

What’s happening in markets?

  • The Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) moved in different directions on Wednesday; the S&P500 up 0.1% to 4,475 points (its highest level in 8 days), while the Nasdaq fell 0.1%. A bit of optimism was in the air after better than expected retail sales numbers came out for January, with sales rising 3.8% (beating the 2% expected). While company news was mostly better than expected. Disney (DIS) announced its diversifying its business and will be developing residential communities. However, uncertainty lingers over markets for two reason; Ukraine/Russian tensions, while secondly investors await the outcome of the Fed’s next meeting outcome, with a 80% chance the Fed will raise rates by 0.5%.
  • The Australian share market ASX200 (ASXSP200.I) today rose 0.7% to 7,336 points, its highest level since 19 January. The market rose above a key level, and broke above its 50 and 200 day moving averages on better than expected company news and economic data. 12,900 Aussies gained jobs last month, beating expectations, while the Australia unemployment rate showed Australian unemployment held at its lowest level since 2008, 4.2% in January 2022. See below for key Australian company news. 
  • Hong Kong’s Hang Seng (HK50.I) and China A shares: Hong Kong stocks and A Shares were steady within their recent trading ranges. Hang Seng was up 1.49%. Tech, education, autos and gaming stocks were the top gainers. Hang Seng Tech up 2.3%. A shares CSI 300 went up 0.39%. Infra-structures and rare earth names were bright spots.  China’s Ministry of Finance released the local government debt limits for 2022 earlier than usual. Rare earth price continued to rise sharply in China due to disruption to rare earth export  in Myanmar, which ranks number 3 in rare earth production globally.
  • Commodities : Crude oil (OILUSMAR22 & OILUKAPR22) continued to retreat to US$91.44 after Moscow partially pulled back troops from the border with profit taking affecting the price. Consider that Russia supplies 8% of global supply. Beyond the Ukraine tension, the oil market remains tight. So while oil prices could continue to correct/fall, the long term trend of oil hitting US$100 a barrel remains in sight. Gold (XAUUSD) gained stable footing rising to US$1,871. Iron ore (SCOH2) futures fell 4% on Thursday to US$134.55, erasing Wednesday’s jump of 3%. In totality, over the last five days iron ore fell 12.5% after Beijing accused market participants of stock piling iron ore. The Chinese government meanwhile is probably going to roll out demand-boosting stimulus this year, given it just relaxed its steel emissions targets by five years. Also keep in mind China’s central bank cut rates three times and is likely to cut again, to encourage big infrastructure and property spending. Of course property/infrastructure works require iron ore and other industrial commodities. Technically Iron ore’s price remains pressured lower, and could fall to $120, near its 200-day moving average, before possibly extending its long term uptrend in line with expectations of China buying more iron ore. BHP (BHP) the world’s biggest iron ore miner trades higher at $48.33 today, while Rio Tinto (RIO) shares trade up 1.5%.

What to consider

  • We are moving to a new cycle. You must consider this will likely shift markets. The Fed’s January meeting minutes released overnight confirmed the Fed will likely to hike rates and reduce its balance sheet soon. The takeaways? Firstly; it’s the second time in history the Fed has been given a mandate from the White House to fight inflation by rising rates. Secondly; consider the Fed will embark on a full interest rate hike cycle for the first time in 12 years. Thirdly; rising rates reduces the speed of economic growth and tech innovation. Recall, over the last 10 years tech stocks were the best performers, for the next 10 years, the energy sector will probably rein given anemic energy supply.
  • The lessons from ASX earning seasons numbers today? As per our quarterly outlook and recent commentary, energy stocks are continuing to shine and produce better than expected earnings results. We saw that in the US too amid their earnings season. Today, Australia’s biggest oil and gas company, Woodside Petroleum (WPL) reported better than expected profits, and its best profit in seven years. WPL shares surged 4.4% to a two year high. Meanwhile Origin (ORG) reported its closing its coal-fired power in station in 2025, 7 years earlier than expected to reduce emissions. This highlights the lack of coal in the market will continue, while the energy body, the US Energy Information Administration (EIA) says coal demand from Russia, India Brazil is surging and will hit another record high this year. Separately shares in CSL (CSL), Australia’s third biggest company, jumped 4% to $274.50, (its highest level in a month) and broke above its 50-day average after reporting stronger than expected profits and seeing a turnaround in revenue from its biggest revenue stream (its blood therapy). CSL is a 'NextGen' company to watch, given it’s a pioneer and the world’s biggest bloody therapy company.
  • Hong Kong & China A share marketsIn infrastructure construction news; The Chinese Government’s early release of the annual increase in local government debt limits for 2022 was perceived to be motivated by its desire to front load infrastructure construction. Among the RMB 31 billion local government project finance debts issued in January, 75% went to infrastructure.  As for margin compression due to high energy prices; The recent sharp fall in the share price of China Resources Power (836.HK) as a result of negative profit warnings from the Company should remind investors about the margin compression impact on industries from high oil, natural gas, and coal prices. In the Property sector; Local governments in China have reportedly been rolling out a new round of home purchase subsidies, relaxing rules about borrowing from social security fund and rules in hukou (household registration) to stimulate home buying since the beginning of the year. The PBoC has also released supporting measures to financing affordable rental housing projects.

Trading ideas

  • General: As above, we believe we are moving into a new cycle. The Fed is set to embark on an rising interest rate cycle for the first time in 12-13 years, the Australian central bank is about to embark on rising interest rates cycle for the first time in 13 years too. This means markets are likely to pivot and enter a new cycle. We think the best performers of the next 10 years probably won’t be in technology, who were the best performers over the last 10 year. Meanwhile, we think the best performers for the next decade will be in in commodities and energy, given anemic supply and while infrastructure spending at the government level is increasing, along with China stimulus.
  • Asia: We re-iterate our theme of looking at energy and commodities and continue to look for opportunities in companies that may benefit from infra-structure spending in China.

For a global look at markets – tune into our Podcast 

For prior Australian market and APAC updates - click here. 

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


The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research 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. To the extent that any content is construed as investment research, you must note and accept that the 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 under relevant laws.

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

Saxo Bank (Schweiz) AG
The Circle 38

Contact Saxo

Select region


All trading carries risk. Losses can exceed deposits on margin products. You should consider whether you understand how our products work and whether you can afford to take the high risk of losing your money. To help you understand the risks involved we have put together a general Risk Warning series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. The KIDs can be accessed within the trading platform. Please note that the full prospectus can be obtained free of charge from Saxo Bank (Switzerland) Ltd. or the issuer.

This website can be accessed worldwide however the information on the website is related to Saxo Bank (Switzerland) Ltd. All clients will directly engage with Saxo Bank (Switzerland) Ltd. and all client agreements will be entered into with Saxo Bank (Switzerland) Ltd. and thus governed by Swiss Law. 

The content of this website represents marketing material and has not been notified or submitted to any supervisory authority.

If you contact Saxo Bank (Switzerland) Ltd. or visit this website, you acknowledge and agree that any data that you transmit to Saxo Bank (Switzerland) Ltd., either through this website, by telephone or by any other means of communication (e.g. e-mail), may be collected or recorded and transferred to other Saxo Bank Group companies or third parties in Switzerland or abroad and may be stored or otherwise processed by them or Saxo Bank (Switzerland) Ltd. You release Saxo Bank (Switzerland) Ltd. from its obligations under Swiss banking and securities dealer secrecies and, to the extent permitted by law, data protection laws as well as other laws and obligations to protect privacy. Saxo Bank (Switzerland) Ltd. has implemented appropriate technical and organizational measures to protect data from unauthorized processing and disclosure and applies appropriate safeguards to guarantee adequate protection of such data.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the U.S. and other countries. App Store is a service mark of Apple Inc.