Global Market Quick Take: Asia – January 9, 2024

Macro 5 minutes to read
Saxo Be Invested
APAC Research

Summary:  Nasdaq 100 rallied 2% led by gains in Nvidia which launched new chips, although Dow lagged underpinned by a slide in Boeing. Treasury yields slipped amid a dip in US inflation expectations, and that resulted in a softer dollar with gains led by JPY. Oil unwound last week’s gains on demand concerns. Reports suggested that China is likely to cut RRR again, and that could bring HK stocks, AUD and metals in focus today in the Asian session.


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

US Equities: The Magnificent Seven stroke back on Monday with all of them gaining more than 1%, led by a 6.4% jump in Nvidia. Ahead of the CES 2024 consumer electronics show officially starting today, Nvidia announced three new graphics chips with extra components and enhanced AI features for PC users. Additionally, the AI chip giants said four Chinese EV manufacturers will use its technology in their auto-driving platforms. The Nasdaq 100 rose 2.1% and the S&P 500 added 1.4%. Boeing plummeted 8.1% after US regulators ordering the grounding of over 170 Boeing 737 Max 9 jets after the accident over the weekend.

Fixed income: Boosted by falls in inflation expectations for the year ahead through the 5-year horizon in a New York Fed survey of consumers, Treasuries rallied modestly with yields falling around 1bp across the yield curve. Additionally, Fed Governor Bowman has toned down her previously relatively hawkish stance, saying inflation could fall further without additional rate hikes. The 10-year yield finished 2bp lower at 4.03%.

China/HK Equities: The Hang Seng Index plunged by 1.9%, showing notable weaknesses in China Internet, EV, catering, and insurance stocks. The Hang Seng Tech Index plummeted by 3%. XPeng tumbled by 7.8% after analysts revised down the EV maker’s earnings and margin forecasts. The CSI 300 dropped by 1.3%. As investors sought explanations for the poor performance, some attributed it to a Reuters report claiming that the China Securities Regulatory Commission (CSRC) lifted a ban on mutual funds' net selling of stocks, as funds needed to raise money to address increasing redemptions.The news that a Beijing court announced last Friday that it had deemed Zhongzhi insolvent and had accepted an application for liquidation of the shadow banking financial group added to the negative sentiments

FX: The dollar index came under some pressure on Monday, and the DXY index tested 102 amid slowing consumer inflation expectations from the NY Fed survey. USDJPY pushed below 144 on softer Treasury yields but recovered later. EURUSD attempted gains but was rejected at 1.0980, the 23.6% fibo retracement level from the December high. GBPUSD however surged to highs of 1.2767, remaining just shy of Friday’s high at 1.2770 break of which is now needed to reaffirm a bullish bias. USDNOK rose to fresh high of 10.42 with the slump in oil prices weighing on NOK.

Commodities: Oil prices saw a sharp slide of 4% on WTI, unwinding last week’s gains, as Saudi’s price cuts fuelled the demand weakness concerns. This comes despite attacks on shipping in the Red Sea by Houthi rebels continuing, along with supply outages in Libya. EIA’s outlook report will be eyed today, along with any further expectations of China’s RRR cut. Gold however continued to slide despite softer yields, and the 50DMA as well as 38.2% fibo retracement levels coinciding at $2,012 will be in focus. Metals will be on watch today amid reports of China cutting RRR.

Macro:

  • NY Fed's December consumer survey saw inflation expectations dip across the forecast horizons. One-year inflation expectations fell to 3% from 3.4% in November, the lowest since January 2021. Three-year inflation expectations fell to 2.6% from 3.0% and five-year inflation expectations fell to 2.5% from the prior month's 2.7%
  • Fed's Bostic, a 2024 voter, said the current pace of balance sheet normalization is appropriate and the Fed remains in a situation of ample reserves. He repeated his view for two 25bp rate cuts this year, with the first occurring sometime in Q3.
  • Japan’s Tokyo CPI for December showed some cooling from last month but remained well above target levels. Headline CPI cooled to 2.4% YoY from 2.7% last month while core CPI was at 2.1% from 2.3% YoY previously. Core core CPI remains a key concern as it was at 3.5% YoY for December from 3.6% previously. Data is broadly in-line with BOJ’s view that import-driven price pressures are cooling, and this would mean policy pivot will continue to be pushed forward.
  • In a review of its work for 2023, the People’s Bank of China confirmed, as previously reported by media, that it had increased the quota of the pledged supplemental lending (PSL) by RMB500 billion. As the amount of PSL having decreased through January to November in 2023 but increasing by RMB350 billion in December, there will be RMB150 billion yet to deploy in early 2024. Separately, the central bank hints on additional monetary supports to the real economy, including reductions in the reserve requirement ratio (RRR).

Macro events:  EIA STEO, German Industrial Output (Nov), US NFIB (Dec)

Earnings: Albertsons

In the news:

  • Nvidia Rolls Out New Chips, Claims Leadership of AI PC Race (Bloomberg)
  • China regulators lift stock net-selling ban for mutual funds due to redemption pressures on funds (Reuters)
  • China Hints at More Easing With Possible Reserve Ratio Cut (Bloomberg)
  • China Evergrande: key executive at EV unit arrested for unspecified crimes, 3 months after founder Hui Ka-yan’s detention (SCMP)
  • United finds loose bolts on several 737 MAX planes, raising pressure on Boeing (Reuters)
  • Samsung profit falls 35% in Q4 amid hope for recovery this year (Nikkei Asia)

 

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

For a global look at markets – go to Inspiration.

Quarterly Outlook 2024 Q4

01 /

  • Macro Outlook: The US rate cut cycle has begun

    Quarterly Outlook

    Macro Outlook: The US rate cut cycle has begun

    Peter Garnry

    Chief Investment Strategist

    The Fed started the US rate cut cycle in Q3 and in this macro outlook we will explore how the rate c...
  • 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

  • Equity Outlook: Will lower rates lift all boats in equities?

    Quarterly Outlook

    Equity Outlook: Will lower rates lift all boats in equities?

    Peter Garnry

    Chief Investment Strategist

    After a period of historically high equity index concentration driven by the 'Magnificent Seven' sto...
  • FX Outlook: USD in limbo amid political and policy jitters

    Quarterly Outlook

    FX Outlook: USD in limbo amid political and policy jitters

    Charu Chanana

    Head of FX Strategy

    As we enter the final quarter of 2024, currency markets are set for heightened turbulence due to US ...
  • Commodity Outlook: Gold and silver continue to shine bright

    Quarterly Outlook

    Commodity Outlook: Gold and silver continue to shine bright

    Ole Hansen

    Head of Commodity Strategy

  • FX: Risk-on currencies to surge against havens

    Quarterly Outlook

    FX: Risk-on currencies to surge against havens

    Charu Chanana

    Head of FX Strategy

    Explore the outlook for USD, AUD, NZD, and EM carry trades as risk-on currencies are set to outperfo...
  • Equities: Are we blowing bubbles again

    Quarterly Outlook

    Equities: Are we blowing bubbles again

    Peter Garnry

    Chief Investment Strategist

    Explore key trends and opportunities in European equities and electrification theme as market dynami...
  • Macro: Sandcastle economics

    Quarterly Outlook

    Macro: Sandcastle economics

    Peter Garnry

    Chief Investment Strategist

    Explore the "two-lane economy," European equities, energy commodities, and the impact of US fiscal p...
  • Bonds: What to do until inflation stabilises

    Quarterly Outlook

    Bonds: What to do until inflation stabilises

    Althea Spinozzi

    Head of Fixed Income Strategy

    Discover strategies for managing bonds as US and European yields remain rangebound due to uncertain ...
  • Commodities: Energy and grains in focus as metals pause

    Quarterly Outlook

    Commodities: Energy and grains in focus as metals pause

    Ole Hansen

    Head of Commodity Strategy

    Energy and grains to shine as metals pause. Discover key trends and market drivers for commodities i...

Disclaimer

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
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.