Global Market Quick Take: Asia – July 21, 2023 Global Market Quick Take: Asia – July 21, 2023 Global Market Quick Take: Asia – July 21, 2023

Global Market Quick Take: Asia – July 21, 2023

Macro 7 minutes to read
APAC Strategy Team

Summary:  Post-earnings selloff in Tesla and Netflix, coupled with weakness in the semiconductor industry after TSMC lowered its full-year 2023 revenue guidance to a 10% Y/Y decline weighed on the Nasdaq 100, which tumbled 2.3%. Meanwhile, the US banking sector saw mixed results, with some regional banks gaining on deposit growth. Johnson & Johnson impressed investors with strong Q2 earnings, gaining 6.1%. Treasuries sold off and yield rose after a large decline in jobless claims. Hong Kong & Chinese equities experienced mixed market reactions despite a government pledge of support to private enterprises. USDCNH fell following the PBOC raised the macro-prudential parameter, paving the way for approving more cross-border borrowing.

What’s happening in markets?

US equities (US500.I and USNAS100.I): Tech Stocks Plunge on Post-Earnings Selloff; Johnson & Johnson Impresses with Strong Q2 Earnings.

Tesla and Netflix’ post-earnings selloff weighed on the Nasdaq 100, which plunged 2.3% while the S&P slid 0.7%. In addition, semiconductor stocks declined after TSMC revised down its 2023 sales outlook, seeing the PHLX Semiconductor Index tumbling 3.6%, Nvidia (NVDA:xnas) shedding 3.3%, and Intel (INTC:xnas) dropping by 3.2%.

The performance of the banking sector was mixed, with the KBW Bank Index gaining 0.7% while the SPDR S&P Regional Bank ETF (KRE:arcx) slid 0.4%. Zions Bancorp (ZION:xnys) jumped 10% after reporting better than expected pre-provision net revenues and deposit trends, as well as improved guidance,  KeyCorp (KEY:xnys) added 4% while Fifth Third Bancorp (FITB:xnys) climbed 2.7% following the regional lending reporting increases in deposits from a quarter ago. On the other hand, Truist Financial (TFC:xnys) plummeted 7.1% after reporting largely flat deposit growth.

Johnson and Johnson, gaining 6.1%, was the second-best performer among the S&P 500, after reporting adjusted EPS USD2.80, beating consensus USD2.62 and raising its 2023 earnings guidance.

Treasuries (TLT:xnas, IEF:xnas, SHY:xnas): sell off on a smaller jobless claims print

US Treasuries declined (rose in yields) following the initial jobless claims coming in at the lowest level in two months. Selling was heaviest in the 5-year segment. The 10-year TIPS auction received strong demand. The Treasury announced a USD120 billion auction schedule for next week in 2-year, 5-year, and 7-year notes. The 2-year yield finished the session 7bps higher at 4.84% while the 10-year yield rose 10bps, reaching 3.85%. The 2-10 yield curve steepened by 3bps to -98.

Hong Kong & Chinese equities (HK50.I & 02846:xhkg): ): property stocks extend rally

The joint statement from the Communist Party of China’s central committee and the State Council pledging support to private enterprises did not stir up much excitement in the market. The Hang Seng Index ticked down 0.1%. Southbound flows from mainland investors recorded a net sale of HKD13.8 billion, the second-largest daily outflow on record, reversing most of the HKD16.5 billion outflow the day before.

China property stocks extended their rally since yesterday, with Country Garden Services (06098:xhkg), Country Garden (-2007:xhkg), and Longfor (00960:xhkg) gaining over 3%, helped by news headlines suggesting that China is considering relaxing home purchase restrictions, including mortgages in Tier-1 cities. On the other hand, Sunny Optical (02382:xhkg) plummeted 13.7% after warning about a 65%-70% fall in earnings in H1.

In the A-share market, the CSI300 Index dropped by 0.71%. Telecommunication, computing, AI stocks, electronics, and media were the top losers while e-commerce, retailing, and property outperformed.

FX: Dollar pushed higher on gains in yields

The DXY index pushed higher to touch 101-levels overnight on lower jobless claims after being initially pressured yesterday on CNH and AUD strength following PBoC support measures and Australia’s firm employment data. EURUSD plunged 1 big figure to lows of 1.1119 while GBPUSD dipped below 1.29 as a dovish shift in ECB comments and softer UK CPI continued to underpin. USDJPY surged to 140.50 overnight on higher Treasury yields but was back below 140 later. USDCNH slipped from 7.23+ to 7.17 as China’s central bank moved to support the yuan with a strong fixing and a tweak to rules on how much Chinese companies can lend in foreign currencies.

Crude Oil: battling tightness vs. demand concerns

Crude oil prices were choppy but eventually closed higher on Thursday. Supply cuts from Saudi Arabia and Russia continue to signal that a tighter market may be in store for H2, but a firm weekly US claims report last night fueled fears of more policy tightening. Brent futures are closing in at $80, about the high of the recent range.


What to consider?

US initial claims come in below expectations

US initial jobless claims fell to 228k from 237k in the latest week, coming in short of the expectations at 240k. This marked the lowest number of claims since early May and the second lowest since February, and has once again sparked concerns of labor market remaining tight. Philly Fed index marginally improved to -13.5 from -13.7, short of the consensus -10.0.

Japan June CPI will keep traders on edge

June inflation report out of Japan this morning was mixed. Headline CPI increased slightly to 3.3% YoY from 3.2% previously, coming in above expectations of an unchanged print. Core measures were as expected, with the ex-fresh food print coming in at 3.3% YoY from 3.2% YoY previously while the ex-fresh food and energy print was only a notch softer at 4.2% YoY from 4.3% YoY previously. With expectations of a July tweak running high until last week but dampened somewhat this week after Governor Ueda’s comments, there is little to read in the inflation report to guide the markets about what to expect at the BOJ meeting next week. Inflation remains above BOJ’s 2% target but the central bank isn’t convinced that it is driven by wage gains.

The PBOC eases restrictions on cross-border borrowing capital inflows

The People’s Bank of China (PBOC) raised the macro-prudential parameter from 1.25 to 1.5 on Thursday which pave the way for approving more cross-border borrowing in foreign currencies by Chinese corporate and financial institutions going forward. According to the PBOC’s notice in 2017, approvals for cross-border borrowings for corporate and financial institutions are referenced to a product of net assets, cross-border financing leverage ratio, and the macro-prudential parameter. After the PBOC lowered the macro-prudential parameter from 1.0 for financial institutions in Dec 2020 and for corporate in Jan 2021, the appreciation of the Chinese yuan slowed. When the PBOC raised it from 1.0 back to 1.25 in October 2022, it happened to coincide with the high point of USDCNH (low point in the Chinese yuan) at 7.37.

Janet Yellen’s Vietnam visit highlights the fragmentation game

US Treasury Secretary Yellen was in Vietnam to push for reshaping of logistics as US tries to cut its dependence on China. She said that diversified global supply chains are key to achieving long term economic resilience and that the US will pursue a strategy of friend-shoring. We have highlighted earlier that Vietnam, Mexico, Brazil, India, Indonesia and others are the likely winners of the global fragmentation game.

TSMC Q2 earnings beat but lowers full-year sales guidance

Taiwan Semiconductor Manufacturing (TSM:xnys) shed 5.1% overnight in ADR trading after the largest chip foundry in the world reported Q2 earnings beat analyst estimates but lowered its full-year 2023 revenue guidance to a 10% Y/Y decline from previously suggested low-to-mid single digit decline. The management attributed the downward revision to weaker economic environments and a deeper than expected downturn in smartphone chips and end-market handset demand. TSMC also said that it is postponing the start of production at its new Arizona plant to 2025.





For a detailed look at what to watch in markets this week – read our Saxo Spotlight.

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


The Saxo 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 is not intended to and does not change or expand on this. 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 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 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 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 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 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 (

None of the information contained here constitutes an offer to purchase or sell a financial instrument, or to make any investments. Saxo does not take into account your personal investment objectives or financial situation and makes no representation and assumes no liability as to the accuracy or completeness of the information nor for any loss arising from any investment made in reliance of this presentation. Any opinions made are subject to change and may be personal to the author. These may not necessarily reflect the opinion of Saxo or its affiliates.

Saxo Capital Markets HK Limited
19th Floor
Shanghai Commercial Bank Tower
12 Queen’s Road Central
Hong Kong

Contact Saxo

Select region

Hong Kong S.A.R
Hong Kong S.A.R

Saxo Capital Markets HK Limited (“Saxo”) is a company authorised and regulated by the Securities and Futures Commission of Hong Kong. Saxo holds a Type 1 Regulated Activity (Dealing in Securities); Type 2 Regulated Activity (Dealing in Futures Contract); Type 3 Regulated Activity (Leveraged Foreign Exchange Trading); Type 4 Regulated Activity (Advising on Securities) and Type 9 Regulated Activity (Asset Management) licenses (CE No. AVD061). Registered address: 19th Floor, Shanghai Commercial Bank Tower, 12 Queen’s Road Central, Hong Kong.

Trading in financial instruments carries various risks, and is not suitable for all investors. Please seek expert advice, and always ensure that you fully understand these risks before trading. Trading in leveraged products may result in your losses exceeding your initial deposits. Saxo does not provide financial advice, any information available on this website is ‘general’ in nature and for informational purposes only. Saxo does not take into account an individual’s needs, objectives or financial situation. Please click here to view the relevant risk disclosure statements.

The Saxo trading platform has received numerous awards and recognition. For details of these awards and information on awards visit

The information or the products and services referred to on this site may be accessed worldwide, however is only intended for distribution to and use by recipients located in countries where such use does not constitute a violation of applicable legislation or regulations. Products and services offered on this website are not directed at, or intended for distribution to or use by, any person or entity residing in the United States and Japan. Please click here to view our full disclaimer.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the US and other countries. AppStore is a service mark of Apple Inc. Android is a trademark of Google Inc.