Global Market Quick Take: Asia – April 29, 2024

Global Market Quick Take: Asia – April 29, 2024

Macro 6 minutes to read
Charu Chanana

Chief Investment Strategist

Key points:

  • Equities: US tech sentiment upbeat, FTSE 100 at record highs, HK stocks lead
  • FX: Yen weakness extends on dovish BOJ and lack of intervention signals
  • Commodities: Copper correction looming
  • Fixed income: Quarterly financing estimates due today
  • Economic data: Spain/Germany CPI

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

Equities: Megacaps drove the S&P 500 to its best week since November on the back of stronger earnings from tech giants Alphabet and Microsoft spurring a rally across tech stocks. Alphabet surged over 10% on Friday, pushing the company's market value above $2 trillion for the first time. Earnings season continues this week with Amazon, Coca-Cola, AMD, Eli Lilly reporting on Tuesday.

In Europe, UK’s FTSE 100 also reached a fresh record high on Friday, up over 3% last week, even as the index remains cheaper than US indices. Gains were, however, led by Hong Kong’s Hang Seng index that was up 8.8% on valuation discount and China’s pledge to support HK as a financial hub. HSI tech index was up over 13% and China’s biggest EV-maker BYD reports earnings today.

FX: Despite strong gains on Friday, the US dollar DXY index ended the week marginally lower despite the expectations of the first full Fed rate cut shifting to December from a November cut seen at the start of last week. The decline in JPY accelerated post-BOJ announcement on Friday and USDJPY rose to 158+ levels just as we expected, given the usual dovish narrative from the BOJ and lack of an intervention. Yen crosses also reached record levels, with AUDJPY at a decade-highs, NZDJPY highest in 17 years, and CNHJPY knocking at the 22 handle where once 21 was considered to be the line-in-the-sand. GBPUSD making another stride above 1.25 while EURUSD still struggling at 1.07.

Commodities: Gold recorded its first weekly decline in six weeks, as expectations of Fed rate cuts faded. Silver was down over 5% for the week, despite dollar still marginally weaker. Crude oil rose last week amid lingering risks to supply. Tensions in the Middle East remain elevated despite tit-for-tat attacks between Israel and Iran not leading to any escalation in the Israel-Hamas war. Supply risks are also emerging as Russia and Ukraine target each other’s energy infrastructure. Base metals remained strong last week, with Copper up over 1% even as BHP’s bid for Anglo American failed and risk of a correction is seen. Grains sector was also in focus with Wheat prices up close to 10% for the week on weather concerns.

Fixed income: While Friday’s core PCE data cooled the hawkish risks around Fed policy, the impact was small compared to a slew of strong data seen over the last few weeks. 2-year yield was back to test 5% while 10-year was above 4.65%. Today’s focus is on quarterly financing estimates ahead of Wednesday's Quarterly Refunding Announcement and the FOMC with Powell expected to tow a more hawkish line given the data, followed by NFP on Friday.

Macro:

  • US core PCE for March rose 0.32% MoM, in line with the expected +0.3%, and relieving concerns of a potential 0.4% or even 0.5% print after Thursday's Q1 Core PCE prices came in significantly on the upside. Core YoY gains were unchanged at 2.8% vs. expected 2.7%, but there was a revision higher in January and February prints. Focus now turns to the Fed announcement due Wednesday (Thursday morning for Asia) where the central bank will likely keep its options open after the disinflation trend has become bumpy.
  • The Bank of Japan kept policy settings unchanged, with the short-term interest rate unchanged at between 0.0-0.1% as expected and CPI outlook raised to 2.8% for 2024 fiscal year from 2.4% previously. There was no clear mention of FX concerns, and while there was a change in the language around bond purchases - the amount 6 trillion yen per month was not mentioned – details were patchy and the message was not clearly hawkish.

Macro events: Spanish Flash CPI (Apr), German Prelim CPI (Apr), EZ Sentiment Survey (Apr); Japan Market Holiday (Showa Day)

Earnings: ON Semiconductor, MicroStrategy, Paramount Global, NXP Semiconductors, Yum China, Domino’s Pizza, Logitech, China Construction Bank, BYD

News:

  • Elon Musk visits China as Tesla seeks self-driving technology rollout (Reuters)
  • Singtel sees $2.3 billion impairment hit, net loss in 2024 second-half (Reuters)
  • Insurer AIA's Q1 new business value rises 31%, announces $2 billion buyback (Reuters)
  • Earnings for Big Oil backpedal as natgas prices tumble (Reuters)
  • Elliott Said to Have Built ‘Large’ Stake in Buffett-Favored Sumitomo (Bloomberg)
  • Copper at $10,000 and BHP's Mega Bid Expose Mining’s Biggest Problem (Bloomberg)

 

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

For a global look at markets – go to Inspiration.

Quarterly Outlook

01 /

  • Upending the global order at blinding speed

    Quarterly Outlook

    Upending the global order at blinding speed

    John J. Hardy

    Global Head of Macro Strategy

    We are witnessing a once-in-a-lifetime shredding of the global order. As the new order takes shape, ...
  • Equity outlook: The high cost of global fragmentation for US portfolios

    Quarterly Outlook

    Equity outlook: The high cost of global fragmentation for US portfolios

    Charu Chanana

    Chief Investment Strategist

  • Asset allocation outlook: From Magnificent 7 to Magnificent 2,645—diversification matters, now more than ever

    Quarterly Outlook

    Asset allocation outlook: From Magnificent 7 to Magnificent 2,645—diversification matters, now more than ever

    Jacob Falkencrone

    Global Head of Investment Strategy

  • Commodity Outlook: Commodities rally despite global uncertainty

    Quarterly Outlook

    Commodity Outlook: Commodities rally despite global uncertainty

    Ole Hansen

    Head of Commodity Strategy

  • Macro outlook: Trump 2.0: Can the US have its cake and eat it, too?

    Quarterly Outlook

    Macro outlook: Trump 2.0: Can the US have its cake and eat it, too?

    John J. Hardy

    Global Head of Macro Strategy

  • Equity Outlook: The ride just got rougher

    Quarterly Outlook

    Equity Outlook: The ride just got rougher

    Charu Chanana

    Chief Investment Strategist

  • China Outlook: The choice between retaliation or de-escalation

    Quarterly Outlook

    China Outlook: The choice between retaliation or de-escalation

    Charu Chanana

    Chief Investment Strategist

  • Commodity Outlook: A bumpy road ahead calls for diversification

    Quarterly Outlook

    Commodity Outlook: A bumpy road ahead calls for diversification

    Ole Hansen

    Head of Commodity Strategy

  • FX outlook: Tariffs drive USD strength, until...?

    Quarterly Outlook

    FX outlook: Tariffs drive USD strength, until...?

    John J. Hardy

    Global Head of Macro Strategy

  • Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges

    Quarterly Outlook

    Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges

    Althea Spinozzi

    Head of Fixed Income Strategy

The information on or via the website is provided to you by Saxo Bank (Switzerland) Ltd. (“Saxo Bank”) for educational and information purposes only. The information should not be construed as an offer or recommendation to enter into any transaction or any particular service, nor should the contents be construed as advice of any other kind, for example of a tax or legal nature.

All trading carries risk. Loses 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.

Saxo Bank does not guarantee the accuracy, completeness, or usefulness of any information provided and shall not be responsible for any errors or omissions or for any losses or damages resulting from the use of such information.

The content of this website represents marketing material and is not the result of financial analysis or research. It has therefore has not been prepared in accordance with directives designed to promote the independence of financial/investment research and is not subject to any prohibition on dealing ahead of the dissemination of financial/investment research.

Saxo Bank (Schweiz) AG
The Circle 38
CH-8058
Zürich-Flughafen
Switzerland

Contact Saxo

Select region

Switzerland
Switzerland

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.