Global Market Quick Take: Asia – October 4, 2024

Global Market Quick Take: Asia – October 4, 2024

Macro 6 minutes to read
Saxo Be Invested
APAC Research

Key points: 

  • Equities: S&P 500 fell 0.2% after ISM services massive beat 
  • FX: British pound plunged on BOE Governor’s dovish comments 
  • Commodities: WTI crude oil surges 5%, marking highest increase in nearly a year 
  • Fixed income: 10 year yield rises to highest since early September  
  • Economic data: US NFP 

------------------------------------------------------------------ 

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

  QT 4 Oct

Disclaimer: Past performance does not indicate future performance. 

 In the news:

  • Stock market today: S&P 500 slips on rising Mid-East tensions; jobs report looms (Investing)
  • US port workers and operators reach deal to end East Coast strike immediately (Investing
  • China stimulus draws investors back to offshore bonds of troubled property sector (Investing
  • Oil jumps over $3 a barrel as Middle East conflict stokes supply worry (Reuters

Macro: 

  • US ISM Services PMI saw a massive beat, as the headline soared to 54.9 from 51.5, above all analyst forecasts, and was led by a surge in New Orders and Business Activity, to 59.4 (prev. 53.0) and 59.9 (prev. 53.3), respectively. However, the inflationary gauge of Prices Paid lifted to 59.4 from 57.3, and the Employment component slipped into contractionary territory. Inventory sentiment dipped. 
  • Initial Jobless Claims rose to 225k from 219k, above the 220k forecast, while continued claims for the preceding week were little changed at 1.826mln, beneath the 1.832mln consensus. The 4wk average of initial claims fell to 224.25k from 225k, while the unadjusted numbers totalled 181k, down from the prior 182k. NFP preview: US jobs data is always key to track, but even more so now as the Fed has shifted its focus to labour market with cyclical disinflation giving them some comfort. Consensus expects headline payrolls growth of 150k from 142k in August with unemployment rate steady at 4.2%. Leading indicators for the payrolls have been mixed, with employment sub-index of ISM PMIs leaning weaker while JOLTS jobs openings and August ADP survey data have been higher. Good data can be bad data for the markets, as there has already been some pushback to easing expectations priced in by markets from Chair Powell this week and markets may have to adjust hawkish further. Weaker data, however, will increase the odds of a 50bps rate cut at the November Fed meeting. Market is still split with 35bps of easing priced in.  

Macro events: US Jobs Report (Sep), Mainland China market holidays 

Earnings: Apogee,

Equities: All three major US indexes ended in the red on Thursday as investors grew concerned about escalating Middle East tensions ahead of the September payroll report. The S&P 500 fell by 0.2%, the Dow Jones dropped 185 points, and the Nasdaq 100 finished almost flat. Market sentiment turned negative after President Biden suggested support for Israel striking Iran’s oil facilities, raising fears of disruptions to global energy supplies. Oil prices surged over 5% on the back of those comments, boosting energy stocks with Valero Energy Corp rising 6% and Occidental Petroleum gaining 2.5%. On the US data front, ISM services data showed expansion in September, beating estimates comfortably just before the NFP data tonight. Earnings include Levi Strauss’ (-7.6%) due to revenue forecast miss and Tesla (-3.3%) halting orders for its cheapest Model 3. 

Fixed income: Treasuries fell, pushing yields to their highest levels since early September. This was driven by a stronger-than-expected ISM services index and a surge in crude oil prices due to Middle East supply risks. Both the US 10-year and 30-year yields were set to close above their 50-day moving averages for the first time in at least two months. Yields rose by 5 to 7 basis points across various maturities, with the 5-year maturity seeing the largest losses, flattening the 5s30s curve by about 2 basis points. The 10-year yield was around 3.85%, over 6 basis points higher, compared to its 50-day moving average of about 3.83%. Meanwhile, investors funneled $38.7 billion into US money-market funds, pushing total assets to a record $6.46 trillion, marking the largest quarterly inflow since the March 2023 banking crisis. 

Commodities: Oil prices continued to climb, following their largest single-day surge in nearly a year, amid concerns that Israel might retaliate against Iranian crude facilities after a missile barrage earlier this week. West Texas Intermediate (WTI) rose toward $74 a barrel after jumping more than 5% on Thursday, while Brent settled near $78. Oil is on track for its biggest weekly gain since March 2023. Gold remained steady ahead of a jobs report that could provide insights into the health of the US economy, as markets considered the potential for further monetary easing by the Federal Reserve. After three consecutive weekly gains, including a record high for bullion in late September, the precious metal was set to end the week relatively unchanged. Meanwhile, copper gave back some of its recent gains driven by China’s stimulus measures, with better-than-expected US jobs data also contributing to the decline. 

FX: The US dollar extended its gains further with the ISM services data coming in much stronger than expected, and lingering geopolitical risks also underpinning. The British pound underperformed, after the dovish comments from BoE Governor Bailey. He said the bank could be a "bit more aggressive" in cutting rates provided the news that inflation continues to be good. Other cyclical currencies like kiwi dollar and Aussie dollar were also down, with 0.8% and 0.65% respectively, as momentum in Chinese stocks listed in HK started to deflate with onshore China markets on holiday and questions around whether current stimulus measures could prove enough to address the structural headwinds. The euro was the most resilient, while Japanese yen and Swiss franc were down modestly.  

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

For a global look at markets – go to Inspiration. 

Quarterly Outlook

01 /

  • 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

  • Commodity Outlook: Commodities rally despite global uncertainty

    Quarterly Outlook

    Commodity Outlook: Commodities rally despite global uncertainty

    Ole Hansen

    Head of Commodity Strategy

  • 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, ...
  • 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

  • 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

None of the information provided on this website constitutes an offer, solicitation, or endorsement to buy or sell any financial instrument, nor is it financial, investment, or trading advice. Saxo Capital Markets UK Ltd. (Saxo) and the Saxo Bank Group provides execution-only services, with all trades and investments based on self-directed decisions. Analysis, research, and educational content is for informational purposes only and should not be considered advice nor a recommendation. Access and use of this website is subject to: (i) the Terms of Use; (ii) the full Disclaimer; (iii) the Risk Warning; and (iv) any other notice or terms applying to Saxo’s news and research.

Saxo’s content may reflect the personal views of the author, which are subject to change without notice. Mentions of specific financial products are for illustrative purposes only and may serve to clarify financial literacy topics. Content classified as investment research is marketing material and does not meet legal requirements for independent research.

Before making any investment decisions, you should assess your own financial situation, needs, and objectives, and consider seeking independent professional advice. Saxo does not guarantee the accuracy or completeness of any information provided and assumes no liability for any errors, omissions, losses, or damages resulting from the use of this information.

Please refer to our full disclaimer for more details.

Saxo
40 Bank Street, 26th floor
E14 5DA
London
United Kingdom

Contact Saxo

Select region

United Kingdom
United Kingdom

Trade Responsibly
All trading carries risk. To help you understand the risks involved we have put together a series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. Read more
Additional Key Information Documents are available in our trading platform.

Saxo is a registered Trading Name of Saxo Capital Markets UK Ltd (‘Saxo’). Saxo is authorised and regulated by the Financial Conduct Authority, Firm Reference Number 551422. Registered address: 26th Floor, 40 Bank Street, Canary Wharf, London E14 5DA. Company number 7413871. Registered in England & Wales.

This website, including the information and materials contained in it, are not directed at, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in the United States, Belgium or any other jurisdiction where such distribution, publication, availability or use would be contrary to applicable law or regulation.

It is important that you understand that with investments, your capital is at risk. Past performance is not a guide to future performance. It is your responsibility to ensure that you make an informed decision about whether or not to invest with us. If you are still unsure if investing is right for you, please seek independent advice. Saxo assumes no liability for any loss sustained from trading in accordance with a recommendation.

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. Android is a trademark of Google Inc.

©   since 1992