Global Market Quick Take: Asia – January 18, 2024 Global Market Quick Take: Asia – January 18, 2024 Global Market Quick Take: Asia – January 18, 2024

Global Market Quick Take: Asia – January 18, 2024

Macro 5 minutes to read
Redmond Wong

Chief China Strategist

Summary:  Treasury yields surged following robust US retail sales, with the 2-year yield up 14bps to 4.36% and the 10-year yield climbing 4bps to 4.10%. USDJPY rallied above 148, while EURUSD saw minimal change despite ECB President Lagarde's warning of rate cuts likely to be later than when the market expected. Spot gold plummeted 1.1% to $2,006. The S&P 500 and Nasdaq 100 dropped 0.6% while the Hang Seng Index plunged 3.7%. The Chinese GDP and activity data were mixed but largely met expectations.

Saxo’s Q1 2024 Outlook titled “What happened to the future” is now out. You can read it here.

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

US Equities: Stocks sank as Treasury yields rose, with both the S&P 500 Index and the Nasdaq 100 Index falling by 0.6% to 4,739 and 16,736, respectively. All 11 sectors of the S&P 500 declined. Tesla dropped 2%, while Apple fell by 0.5% after a US court of appeals declined to grant a longer pause on its smartwatches with a blood oxygen feature.

Fixed income:  Treasury yields rose in response to a hotter-than-expected retail sales report, led by a 14bp jump in the 2-year yield to 4.36%. The 10-year yield climbed 4bps to 4.10%. In the futures and OIS markets, the probability of a 25bp cut at the March FOMC was trimmed to 57%, down from 63% one day earlier. The $13 billion 20-year Treasury bond auction met with tepid demand, with the awarded yield stopping at 0.8bp above the trading level at the time of the auction, and primary dealers left with a larger-than-usual portion of the auction.

China/HK Equities: The Hang Seng Index plummeted by 3.7%. The Chinese GDP and activity data released in the morning were largely in line with expectations. Investors attributed the improvements to the low base in the year before and continued to feel concerned about the sustainability of the recovery of the Chinese economy in 2024. News that the EU may impose a tariff on Chinese electric vehicles as soon as this June triggered selling on EV stocks. President Xi’s remarks of tightening the Party’s control over China’s financial sector with supervision that has 'teeth’ and Premier Li Qiang’s push-back to calls for more aggressive stimulus measures contributed to the deterioration in market sentiment. The CSI300 declined 2.1%.

FX:As US Treasury yields rose, USDJPY extended its rally, reaching above the 148 handle. Meanwhile, EURUSD remained little changed after ECB President Lagarde pushed back market expectations of rate cuts as early as April.

Commodities: Spot gold plunged 1.1% to $2,006 as Treasury yields rose on stronger US data. The short-term direction of gold will be dictated by the trajectory of US bond yields and the dollar.


  • US retail sales were stronger than expected in December, rising 0.6% M/M, above the median forecast of 0.4% and November’s 0.3%. Excluding autos, retail sales grew 0.4% M/M in December, also stronger than the 0.2% expected in the previous month.
  • US industrial production growth was 0.1% in December, surpassing the downwardly revised figure of 0.0% in November and exceeding the expected -0.1%
  • The Fed’s Beige Book, a summary of commentary on economic conditions in the 12 Federal Reserve districts, indicated some improvements. Three districts reported growth, one experienced a modest decline, and the rest noted little change.
  • In Davos, ECB President Christine Lagarde stated that while the European Central Bank may consider rate cuts this summer, she emphasized that it is unhelpful for the market to aggressively price in the timing and pace of these cuts.
  • China’s Q4, as well as the full-year GDP for 2003, grew by 5.2% Y/Y, the same as foretold by Premier Li Qiang the day before. Notably, nominal GDP fell to 4.6% in 2023 from 4.8% in 2022. Industrial production increased by 6.8% Y/Y in December slightly above the estimate and November’s 6.6%.  Strength was found in mobile phones and autos but softness in steel and cement. However, retail slowed more than expected to 7.4% Y/Y from 10.1%. Fixed asset investment growth improved to 4.0% Y/Y in December from 2.9% in November, above the median forecast of 2.9%, driven by infrastructure and manufacturing investment while property investment worsened to a -12.3% Y/Y. The headline unemployment rate came in at 5.2%. After a suspension of release for five months, the youth unemployment rate (16-24 years old) on a revised survey methodology came in at 14.9%. All in all, the data were mixed but largely in line with expectations.

Macro events: US housing starts & building permits (Dec), US Philly Fed survey (Jan), UK RICS house price (Dec), Japan machinery orders (Nov)

Earnings: TSMC, Compagnie Financier, Trust Financial, Fastenal, PPG, M&T Bank, JB Hunt, Northern Trust, KeyCorp

In the news:

  • Apple Must Stop Selling Watches With Blood Oxygen Feature (Bloomberg)
  • Third Commercial Ship in a Week Struck by a Drone Near Yemen (Bloomberg)
  • China’s population fell by 2.08 million last year to 1.4097 billion people, down by 2.08 million from 1.4118 billion in 2022 (SCMP)
  • Dimon Says China Risk-Reward Equation Has ‘Changed Dramatically (Bloomberg)
  • Hong Kong finance chief Paul Chan rules out capital gains tax for ‘foreseeable future’ for city (SCMP)


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

For a global look at markets – go to Inspiration.


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