Global Market Quick Take: Asia – September 11, 2024

Global Market Quick Take: Asia – September 11, 2024

Macro 6 minutes to read
Saxo Be Invested
APAC Research

Key points:

  • Equities: Oracle rallied 11.5% after beating earnings estimates
  • FX: Canadian dollar hurt by steep falls in crude
  • Commodities: WTI and Brent crude hit lowest levels since 2021
  • Fixed income: Yield curve bull steepens
  • Economic data: US CPI, UK July GDP
 

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

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

Disclaimer: Past performance does not indicate future performance.

In the news:

  • US stock futures inch lower with CPI data, Harris-Trump debate on tap (Investing)
  •  Fed's upcoming projections to signal deeper cuts than previously expected: Citi (Investing)
  •  JPMorgan stock slumps as interest income warning rattles market (Investing)
  •  GameStop reports fall in revenue, files for 20 million share offering (Investing)
  •  Oil prices tumble on growth worries, stocks diverge (Yahoo)
  • Oracle shares jump as AI push perks up cloud demand (Reuters)

Macro:

  • UK labor data came in mixed with average weekly wages cooling to 4.0% YoY for the 3 months to July, softer than 4.1% expected and 4.6% prior (revised higher from 4.5%). However, the unemployment rate dipped to 4.1% in July from 4.2% prior as expected while the job growth at 265k was stronger than 97k prior and 123k expected. The data is not weak enough to prompt a cut from Bank of England next week and hasten the pace of rate cuts.
  • US CPI preview: As the Federal Reserve shifts focus from inflation to the labour market and prepares for an interest rate cut next week, US inflation remains above the Fed’s target, with headline inflation at 2.9% YoY and core inflation at 3.2%YoY as of JulyWhile headline inflation is expected to drop to 2.5% in August, core inflation is expected to stay steady, suggesting persistent inflationary pressures. To read a full preview of US inflation due today, go to this article.

Macro events: UK GDP Estimate (Jul), US CPI (Aug)

Earnings: Manchester United, Tsakos Energy, Oxford, Lesaka

Equities: US stocks ended mixed on Tuesday as investors geared up for a key inflation report tonight that could shape the Federal Reserve's next interest rate moves. The S&P 500 rose by 0.4%, logging its second consecutive day of gains, while the Dow Jones slipped by 92 points due to significant declines in banking stocks. JPMorgan dropped 5.2% after lowering its 2025 net interest income forecast, and Goldman Sachs fell 4.4% following weak trading revenue projections. Tech stocks offered some support, with Nvidia (+1.5%), Microsoft (+2.1%), and Amazon (+2.4%) driving a 0.9% increase in the Nasdaq 100. Oracle shares jumped 11.5% after beating earnings estimates and securing a deal with Amazon Web Services. However, Apple dipped 0.3% after losing a court case over its $14 billion tax dispute in Ireland. Political events also added to market uncertainty, with Kamala Harris and Donald Trump set to participate in their first televised debate at 9pm ET.

Fixed income: Treasury futures held steady as investors awaited US inflation data and the Trump-Harris debate. The yield curve bull-steepened as WTI crude futures fell by up to 5%. The 10-year yield dropped 6bps, while the German 10-year yield declined 4bps. A three-year note sale had a high yield 1.7bps below the when-issued yield, indicating strong demand. Treasuries rose sharply as oil prices declined and regulators proposed less-onerous capital requirements. The three-year note auction drew strong demand despite its low yield, boosting sentiment for upcoming 10- and 30-year offerings. Yields were richer by 4bps-6bps led by front-end and intermediate tenors. The 10-year yield ended around 3.645%, near the day's lows, outperforming the German 10-year by 1.5bps. The $58 billion three-year note auction at 1pm was awarded at 3.440%, the lowest since August 2022 and about 1.7bps below expectations.

Commodities: Gold rose by 0.41% to $2,516, driven by a risk-off sentiment in equities and oil, and declining yields ahead of the CPI release and the Fed meeting. WTI crude futures dropped by 4.31% to $65.75, the lowest since December 2021, due to investor concerns despite Tropical Storm Francine's impact. Brent crude also fell by 3.69% to $69.49, marking its lowest close since December 2021. OPEC has slightly reduced its oil-demand growth forecast, now expecting demand to grow by 2.03 million barrels per day this year and 1.74 million barrels per day in 2025, down from previous estimates of 2.11 million and 1.78 million barrels per day, respectively. Total demand is projected to reach 104.2 million barrels per day in 2024 and 106 million barrels per day in 2025.

FX: The US dollar remained in a tight range in Tuesday’s session as focus turns to US presidential debate and the inflation print due later today. Low yielding currencies such as Japanese yen and Swiss franc outperformed the major currencies once again, given a sharp fall in Treasury yields helped to close the rate differentials with the US, making these currencies more attractive. Meanwhile, the Canadian dollar was the underperformer, weighed by steep selling in the crude complex. Bank of Canada governor Macklem’s dovish comments further added to the pressure on CAD, especially as markets are questioning the odds of a 50bps cut from the Fed next week. Other activity currencies were more mixed, with Kiwi dollar and British pound closing higher but Australian dollar weighed down by China deflation concerns and the fallout in commodity prices.

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