Global Market Quick Take: Asia – June 26, 2023 Global Market Quick Take: Asia – June 26, 2023 Global Market Quick Take: Asia – June 26, 2023

Global Market Quick Take: Asia – June 26, 2023

Macro 7 minutes to read
APAC Research

Summary:  US equities plummeted on Friday as concerns on central bank rate hikes came back on the radar while flash PMIs for June also started to signal the incoming growth slowdown, particularly in Europe. Weekend reports of Russian mutiny may further add to risk aversion, and crude oil prices and Gold jumped higher at the Asia open. Rebalancing will be in focus this week as month/quarter-end approaches. Japanese yen had intervention risks back on the horizon, while AUD was the underperformer on concerns of China stimulus remaining slow and measured.

What’s happening in markets?

US equities (US500.I and USNAS100.I): stocks slide as profit-taking and rebalancing drive market decline

Last Friday, there was a decline in the S&P 500 Index by 0.8%, while the Nasdaq 100 Index had a 1% drop. This weakness was across all 11 sectors of the S&P 500, with utilities, consumer discretionary, and information technology leading the decline. In the semiconductor sector, profit-taking became apparent, resulting in a 1.9% drop for Nvidia (NVDA:xnas) and a 1.8% loss for the Philadelphia Semiconductor Index. On the other hand, CarMax (KMX:xnys) saw a significant increase of 10% after surpassing Q1 EPS estimates.

Additionally, some of the day's activities were linked to the constituent changes of Russell indices, which took effect after the close of trading on Friday. Another notable aspect was the selling associated with pension fund month-end and quarter-end rebalancing, which garnered attention among traders.

Treasuries (TLT:xnas, IEF:xnas, SHY:xnas): yields fall, following declines in European yields on soft German and French PMIs

US Treasuries rallied (yields fell) during European hours following the sharp drop in German bund yields after soft German and French PMI data. A late sell-off in U.S. equities helped sustain gains in Treasuries. Fed officials, both non-voters, sent mixed messages as Bostic preferred holding rates at the current level for longer while Daly said two more hikes were reasonable. Meanwhile, Treasury Secretary Yellen said the recession risk was diminishing. The 2-year yield fell 2bps to 4.74% while the 10-year yield shed 6bps to 3.73%.

Hong Kong & Chinese equities (HK50.I & 02846:xhkg): Hang Seng Index extended losses as stimulus hopes fade

Last Friday, the Hong Kong equity market resumed trading after a public holiday, while mainland bourses remained closed. However, the Hang Seng Index suffered a sharp decline of 1.7%, extending its downward streak to 5.7% across four consecutive trading days. Investors, losing faith in the prospects of aggressive stimulus measures, opted to liquidate their positions into a thin session. In the absence of Southbound flows as the mainland was on holiday, the trading volume was the second lowest in 2023. Adding to market concerns, the offshore yuan weakened to 7.2286 at one point, reaching its lowest level since November last year.

This downward trend in sentiment was particularly evident in sectors such as healthcare, property developers, consumers, new electric vehicles, and Internet names, which experienced significant losses. Sino Biopharmaceutical (01177:xhkg), plunging 7.2%, was the worst-performing stock within the Hang Seng Index, followed by China Resources Land (01109:xhkg). Hang Seng Tech Index shed 2.1%, driven by EV stocks and digital health names.

FX: NOK and GBP fail to get support from larger-than-expected rate hikes

The US dollar was bid up on Friday amid global growth concerns as flash PMIs signalled growth worries. EURNOK rose back above 11.85 after a dip to sub-11.55 following the surprise larger rate hike from Norges Bank. GBPUSD also had no upside from the larger-than-expected rate hike last week and traded just around 1.2730 at the start of the new week. USDJPY dipped below 143.50 from Friday’s highs of 143.87 amid verbal intervention and risk aversion spurred by Russian setup over the weekend. AUDUSD was the heaviest last week as China stimulus underwhelmed, and has now dipped below 0.67.

Crude oil: bouncing higher on Russia risks

Oil prices continued to slide on Friday as growth concerns escalated following dismal flash PMI numbers. Hawkish surprises also returned with larger-than-expected rate hikes from some central banks, and overall decline of ~3% was seen in oil prices over the week. Meanwhile, lower investor appetite for commodities was also impacted by a stronger USD. This comes amid stronger than expected supply. However, weekend events in Russia (read below) brought supply concerns back on the radar and oil prices reversed higher at the Asian open. WTI prices jumped to $70/barrel from lows of ~67.50 while Brent got back close to $75 from $72/barrel.

Gold: erases Friday’s spike but upside bias returned on safe-haven demand

Gold rallied on Friday as the weak economic backdrop came back in focus on disappointing flash PMI numbers. Earlier in the week, prospects of further rate hikes brought high real yields back in focus, but the sharp gains on Friday were quickly reversed. Weekend reports of Russia coup however have brought safe haven demand back in focus, and Gold was seen heading back to support-turned-resistance at $1930.


What to consider?

Russian mutiny could bring risk aversion in focus

A civil war has broken out in Russia with Wagner Group leader Yevgeny Prigozhin leading a convoy towards Moscow and loyal parts of the Russian military attacking it. The Russian Federal Security Service (FSB) also released a statement saying not to obey “Criminal and Dangerous Orders by Yevgeny Prigozhin and to assist the Russian Armed Forces and FSB in apprehending him alongside other Wagner Commanders.” Later it was reported that Prigozhin gave the order to return convoys headed to Moscow back to their bases in order to avoid bloodshed. It was also reported that Prigozhin will leave for Belarus in a deal that was brokered by Belarusian President Alexander Lukashenko. He agreed to leave the country in exchange for charges being dropped. While this may mean that the situation has been deescalated for now, it will be hard for status quo to return.

Japan intervention risks come early on Monday

Japan's Finance Ministry's Vice Finance Minister for International Affairs Kanda was on the wires in early Asian hours on Monday with verbal intervention to support the yen. He is Japan’s top currency diplomat and commented that they will respond to FX moves if it becomes excessive and will not rule out any options. This comes as USDJPY rose above 143.50 in Friday’s US session, but the impact of verbal intervention was so far limited in early trading.

BOJ’s summary of opinions for the June meeting were also released, and these argued that it was appropriate to maintain current monetary easing, although noting that there is strong chance consumer inflation will moderate, but won't slow back below 2%, toward middle of current fiscal year. This will continue to fuel expectations of a policy tweak.

Flash PMIs signal slowdown risks starker for Eurozone than the US

US Flash Manufacturing PMI for June fell to a 6-month low of 46.3 from 48.4, coming in below the expected 48.5. Composite PMI dropped to 53.0 (prev. 54.3) but remained in expansionary territory, while services PMI dipped to 54.1 (prev. 54.9), albeit above the consensus of 54.0. While the pace of growth may be slowing, but US companies were still signaling further expansion of business activity, and the situation appeared more dire in the Eurozone. The euro-area manufacturing PMI slid to a fresh low of 43.6 from 44.8 in May, while the pain was also seen expanding to services where PMI came in at 52.4 from 55.1. Composite PMI fell from 52.8 in May to 50.3 in June, staying just above the 50-mark.

The divide between Fed members is widening

Fed member Mary Daly (non-voter) noted that two more rate hikes this year is a very reasonable projection, but it is only a projection and we do not know for sure - implying she is in-line with the median Fed dot plot in 2023. Raphael Bostic (non-voter) was however on the other end of the spectrum, saying that he does not see any more rate hikes this year.

China’s tourist trips and tourism revenues jumped during the public holiday last week

During the 2-day public holiday last week, China registered 106 million domestic tourist trips, marking a remarkable 32.3% Y/Y increase and reaching 112.8% of the same holiday period in 2019. Domestic tourism revenue was estimated to reach RMB37.2 billion during the holiday, representing a 44.5% increase Y/Y and a recovery to 94.9% of the corresponding period in 2019.



For a global look at markets – tune into our Podcast.

Quarterly Outlook 2024 Q2

2024: The wasted year

01 / 05

  • Macro: It’s all about elections and keeping status quo

    Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.

    Read article
  • FX: The rate cut race shifts into high gear

    As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.

    Read article
  • Equities: The AI and obesity rally is defying gravity

    Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.

    Read article
  • Fixed income: Keep calm, seize the moment

    With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.

    Read article
  • Commodities: Is the correction over?

    Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.

    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 (
Full disclaimer (
Full 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.