Global Market Quick Take: Asia – May 31, 2024 Global Market Quick Take: Asia – May 31, 2024 Global Market Quick Take: Asia – May 31, 2024

Global Market Quick Take: Asia – May 31, 2024

Macro 6 minutes to read
APAC Research

Key points:

  • Equities: Dell plunges after disappointing results
  • FX: USD back lower but yen weakness persists
  • Commodities: All eyes on OPEC+ meeting
  • Fixed income: BOJ bond buying adjustment on the watch
  • Economic data: US PCE, OPEC+ meeting (Sunday)


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

Equities: The S&P 500 Index tumbled to a nadir unseen in over a fortnight on Thursday, briefly pausing due to a pricing hiccup, amid persistent anxieties that the Federal Reserve may persist with its stringent monetary stance, casting a pall over market sentiment.

Dragging the index down to 5,235 were notable declines in the technology sector. This was exacerbated by a slowdown in the approval process for export licenses by U.S. authorities, impacting prominent chip manufacturers like Nvidia Corp. and Advanced Micro Devices Inc. These firms have reportedly been facing delays in obtaining permissions necessary for shipping advanced AI accelerators to the Middle East, insiders say.

In contrast, Asian equities are poised for an uptick on Friday, buoyed by the latest tranche of U.S. economic figures which suggest a deceleration in economic activity, potentially bolstering arguments for the Federal Reserve to commence a rollback of interest rates within the current year. Futures markets signal a positive opening for stocks in Australia, Japan, and Hong Kong, while the Golden Dragon Index—a barometer of Chinese firms traded on the Nasdaq—saw an ascent of over 1%. Meanwhile, futures tied to U.S. equities dipped following a downturn in Dell Technologies Inc.'s stock during after-hours trading, as the company's reported revenue growth fell short of investor expectations.

FX: The US dollar slumped again yesterday, erasing Wednesday’s gains as US economic data sent dovish signals and brought yields lower. Fedspeak had little new message and continued to reiterate high-for-longer. USDJPY slid from highs of 157.60+ to dive back below 157 handle as intervention threat picked up, but yen still continues to be a favored funding currency for carry trades as we discussed here, and pair was back higher in early Asian trading. AUDUSD took a look below 0.66 but bounced back higher to 0.6630 in the overnight session, while NZDUSD ended the session broadly unchanged and trades close to 0.6120. Eurozone inflation print is on the radar today ahead of the likely ECB rate cut next week, and EURUSD traded higher to 1.0830+ levels.

Commodities: Gold prices inched up 0.2%, reaching $2,341.92 per ounce and crude prices extended their decline for a third consecutive session, with market indicators pointing to excess supply ahead of an upcoming OPEC+ gathering this weekend.

West Texas Intermediate crude dipped below the $78 mark, following a 1.7% drop on Thursday, and Brent crude hovered around $82, with both benchmarks on track for their second successive monthly decline. The immediate Brent futures spread shifted into a contango—a market scenario where near-term prices are lower than those in future months—for the first time in months, signaling concerns of a supply glut.

Copper continued to backpedal from its peak, while aluminum receded from its highest level in two years, as traders seized the opportunity to realize profits following a sustained surge in the industrial metals sector. In a widespread pullback on the London Metal Exchange, it witnessed declines for the sixth session out of seven, shedding up to 3.8%.

Fixed income: A day before the Federal Reserve is set to review its preferred inflation metric, new data indicated that the U.S. economy expanded at a more modest rate, with revisions suggesting both consumer spending and inflation have moderated. This economic downshift may strengthen the argument for the Fed to begin reducing interest rates within the year. However, the prospect of subdued consumer spending could raise red flags for U.S. businesses. In the bond market, yields on two-year Treasury notes fell by five basis points to 4.92%.

Market participants are also closely monitoring the Bank of Japan for any signs of adjustments in its bond-buying activities and its strategy for June, alongside the release of Tokyo's May inflation figures, which could provide clues about the BOJ's trajectory toward policy normalization. Additionally, traders are keeping an eye on the Ministry of Finance's currency intervention records, especially with the yen hovering near the 157 level against the dollar—a threshold where Japanese authorities are rumored to have previously intervened to bolster the currency.


  • US economic data continued to show that cracks were emerging. Q1 GDP growth was revised down to 1.3% from 1.6% as consumer spending estimates eased from 2.5% to 2.0%. Price metrics such as Q1 PCE prices were also revised down. Meanwhile, weekly jobless claims for the week of May 25 were a notch higher at 219k (vs. 217k expected and 216k prev) signaling that labor market is loosening slowly and unemployment rate may rise. April PCE data today is the next key test of inflation dynamics in the US.
  • The NY Fed President Williams was on the wires, but largely suck to the script. He acknowledged the lack of progress on lowering inflation but did suggest it should moderate in the second half of the year. He believes the policy is well positioned to get inflation back to target. Although there was no clear signaling on how many cuts may come this year, his comments continued to suggest that a rate hike is not on the table.
  • Japan’s May Tokyo CPI jumped higher to 2.2% YoY on the headline from 1.8% previously, coming in as expected, signaling that the nation-wide print may face upside pressure as well. Inflation ex-fresh food rose to 1.9% YoY from 1.6% in April, although the core-core measure which excludes fresh food and energy came in softer at 1.7% YoY from 1.8% previously. The BOJ has been signaling further tightening, and this inflation print continues to leave room for the central bank to take further action to normalize policy and support the yen.

Macro events: China PMIs (May), EZ Flash CPI (May), US PCE (Apr), Canadian GDP (Q1), US Dallas Fed (Apr).

Earnings: BRP, Genesco


  • DJT stock drops 8% after Trump found guilty in hush money trial (Yahoo)
  • DELL shares tumble as solid results, AI server orders fail to satisfy investors (Investing)
  • Core inflation in Japan's capital accelerates, keeps BOJ rate hike view alive (Investing)
  • Fed officials see inflation falling, signal no rush to cut rates (Reuters)
  • Oil falls as US reports surprise fuel build, weak demand (Investing)


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