Macro: Sandcastle economics
Invest wisely in Q3 2024: Discover SaxoStrats' insights on navigating a stable yet fragile global economy.
Chief China Strategist
Summary: Fed Chair Powell signaled on Tuesday that achieving confidence in taming inflation may take longer than expected, delaying potential rate cuts. The 10-year Treasury yield rose by 7bps to 4.67% following Powell's remarks. US equities closed with mixed results amid rising bond yields. The Nasdaq 100 remained relatively stable, supported by semiconductor gains. China's Q1 GDP exceeded expectations, growing by 5.3% year-on-year, but March's activity data suggested a slowdown in momentum compared to earlier months.
The Saxo Quick Take is a short, distilled opinion on financial markets with references to key news and events.
Equities: US equities finished Tuesday in a mixed tone amid rising bond yields, after a hawkish remark from Powell. The S&P 500 Index slid 0.2% to 5,051. The Nasdaq 100 closed nearly unchanged from the day before at 17,714, helped by gains in semiconductor names. Nvidia, AMD, ASML, KLA, Applied Materials, and Lam Research, which rose 1%-2%. Tesla extended declines, falling 2.7% to a closing price of $157.11.
Asian equity markets slid, with the Nikkei 225 losing 1.9% and the CSI300 shedding 1.1%. Despite larger-than-expected 5.3% Y/Y growth in Q1 GDP in China, activity data showed declines in momentum across the board in March. The tightening of regulation over the stock market continued to linger over A-share small and micro-cap, with the CSI 2000 index plummeting 7.2%, falling sharply for the second day in a row. The Hang Seng Index declined 2.1%. On the back of the news of Tesla’s global layoff, which added fuel to anxiety in an increasingly competitive environment, Chinese EV stocks traded in Hong Kong plunged. Amid reports of an EU probe, Chinese medical device makers dropped.
For an update of our views on the markets, please read this latest article from Peter Garnry, Head of SaxoStrats.
FX: The US dollar gained modestly, with the USDJPY rising to 154.72, while the AUDUSD slid to around 0.6400 as US Treasuries extended their rise in yields.
Commodities: Crude oil slid modestly, while gold remained nearly unchanged on Tuesday as traders awaited the next headlines on developments in the Middle East.
Fixed income: The 10-year Treasury yield added 7bps, reaching 4.67%, after Fed Chair Powell said the Fed would need more time to achieve confidence regarding inflation and potential rate cuts.
Macro:
Macro events: US Fed Beige Book, UK CPI, RPI and PPI, New Zealand CPI
Earnings: ASML, Volvo, CSX, Kinder Morgan, Abbott Laboratories, US Bancorp, Jiangsu Hengrui Pharmaceutical, Chongqing Changan Automobile
In the news:
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