Global Market Quick Take: Asia – July 25, 2023 Global Market Quick Take: Asia – July 25, 2023 Global Market Quick Take: Asia – July 25, 2023

Global Market Quick Take: Asia – July 25, 2023

Macro 7 minutes to read
APAC Research

Summary:  While Germany’s manufacturing PMI dampened sentiment in Europe, China’s policy support announcement helped energy and China ADRs outperform. Crude oil prices rose to 3-month highs as demand concerns eased, adding to supply tightness worries. Geopolitical and weather concerns continued to underpin food grain prices with wheat up 8% and corn up 6%. Earnings season heats up today and focus will be on Alphabet and Microsoft.

What’s happening in markets?

US equities (US500.I and USNAS100.I): Energy stocks surge

The S&P500 advanced 0.4%, driven by energy, financials, and real estate. Technology lagged, seeing the Nasdaq100 ticking up 0.1%. Energy stocks surged as the WTI crude rose more than 2% to a three-month high. Regional banks rebounded, with the SPDR S&P Regional Bank ETF (KRE:arcx) adding 2.5%. Tesla (TSLA:xnas) gained 3.5% after revealing strong global sales outside China and the US markets. The maker of Barbie dolls, Mattel (MAT:xnas) climbed 1.8% led by the strong box office performance of the film Barbie. IMAX surged 3.0% on the strong box office of Oppenheimer. On the other hand, Spotify (SPOT:xnys) plunged 4.5% after the headline of subscription price increases.

Treasuries (TLT:xnas, IEF:xnas, SHY:xnas): Yields rose on an upside surprise in a manufacturing activities gauge

Treasuries pared the initial price gains (decline in yields) in European hours after the softer UK and EU PMI prints and reversed to a fall in price (rise in yields) throughout the New York session. A surprise increase in the S&P Global Manufacturing PMI, a nearly 43k contract block sale in the 2-year note futures, and a slightly disappointing 2-year auction weighed on the market. Adding to the negative sentiment was a Wall Street Article by Nick Timiraos saying the Fed is not ready to declare victory on inflation. The 2-year yield rose 8bps to 4.92% while the 10-year finished the day 4bps cheaper at 3.87%.

Hong Kong & Chinese equities (HK50.I & 02846:xhkg): China property stocks tumble; China ADRs surge

The Hang Seng Index tumbled 2.2% as stocks of China property developers, as well as services companies got sold off badly. Country Garden Services (06098:xhkg), Country Garden (02007:xhkg), and Longfor (00960:xhkg) plummeted by 17.9%, 8.7%, and 8.5% respectively. The selloff since last Friday in bonds issued by Country Garden weighed on market sentiments. Likewise, the Hang Seng TECH Index declined by 2.2%, weighed down by Internet stocks. Baidu (09888:xhkg) paced the decline with a loss of 3.8% as other mega-cap Internet names shed more around 2%. Southbound flows from mainland investors registered a net buying of HKD9.8 billion. In A-shares, the CSI300 slid 0.4%. Northbound flows were net selling of RMB5.2 billion.

China’s Politburo held its much-awaited meeting on Monday and released the readout from the meeting after the market close. The Hang Seng Index futures surged 512 points or 2.7% overnight and the Nasdaq Golden Dragon Index jumped 4.3%. The ADRs of Alibaba and Meituan closed in New York more than 5% higher than their Monday Hong Kong closing.

FX: EUR weakness drives the dollar higher

The US dollar was higher on Monday as Treasury yields surged in the NY session. Earlier weakness in EUR and GBP underpinned by a set of disappointing July PMIs also boosted the dollar. EURUSD broke below 1.11 and the 1.10 may also be threatened if ECB makes a dovish shift today. GBPUSD also tested a break below 1.28 but was rejected. Japanese yen remained under pressure with USDJPY still above 141.50. Kiwi returned higher with NZDUSD back above 0.62 but fresh selling pressure emerged in the Asian morning. AUDUSD also erased gains to 0.6750+ seen after China’s announcement.

Crude Oil: jumps higher on China stimulus

While crude oil prices have been supported lately due to supply tightness, demand concerns also eased now with proposed stimulus measures from China. Both WTI and Brent jumped over 2%, climbing to three-month highs and topping their 200-day moving averages. Demand is also rising amid the summer driving season. Week ahead brings a bout of tests but hawkish guidance surprises from either Fed or ECB remain difficult to expect.

Wheat: up over 8% on weather and war worries

CBOT wheat contracts finished Monday’s session with 8.6% gains, and other grain prices moved substantially higher as Russian attacks on Ukrainian ports and grain storage facilities continued on the Danube river. Corn prices were also 6% higher. Meanwhile, Europe’s crop monitoring service reduced its crop yield forecasts for this year’s harvest on concerns on dry and hot weather. Agri stocks and funds may remain in focus.


What to consider?

Disappointing German PMIs sets up stage for a dovish ECB

Eurozone PMIs came in weaker than expected, highlighting the significant growth risks in parts of the region. German July manufacturing PMI was shockingly low at 38.8 from 40.6 previously while France’s manufacturing PMI also dipped further into contraction to come in at 44.5 from 46 in June. Services PMIs held up slightly better but still in a declining trend. German services PMI slid to 52 in July from 54.1 previously while France services PMI was in contraction at 47.4. Overall, Eurozone manufacturing PMI for July was at 42.7 from 43.4 in June while services PMI slid to 51.1 from 52. These weak prints have put further focus on ECB meeting scheduled for this week and whether there will be any scope for them to guide for another rate hike after the one expected this week.

China Politburo meeting remains tight on stimulus

The recent Politburo meeting in China reflected a cautious approach to economic stimulus with limited commitments. One of the notable relatively bullish signals is the removal of the “housing is for living in, not for speculation” phrase from the readout of the meeting. Investors welcomed the omission and heightened the expectation of some relaxation on home buying restrictions in higher-tier cities. Another mildly bullish sign is the Politburo’s explicit recognition of the challenges faced by the economy including mentioning “insufficient domestic demand” and “some business enterprises are facing difficulties”. You can find more details and our takes on the investment implications of the Politburo meeting in this article.

US PMIs were mixed

US S&P Global Manufacturing PMI survey beat, rising to 49 from 46.3 and above expectations of 46.2. Services PMI missed, however, falling to 52.4 from 54.5 and beneath expectations of 54.1, albeit still remaining in expansionary territory. Overall, the composite fell, but remained in expansionary territory, printing 52 from the prior 53.2. While this may give further boost to the soft-landing narrative, it is worth noting that commentary hinted at business optimism about the year-ahead outlook deteriorating sharply to the lowest seen so far this year, and there were also some concerns about the stickiness of inflation.

Earnings season heats up: Today’s focus on Alphabet and Microsoft

As big tech companies prepare to release their earnings reports, there is a sense of caution in the air after Tesla and Netflix reported underwhelming results. The focus for today is on Alphabet (GOOGL:xnas) and Microsoft (MSFT:xnas). Alphabet is expected to experience a 13.7% Y/Y dip in revenue at USD 60.2 billion, but an increase of 14.6% Y/Y in Adjusted EPS at USD 1.44, according to analysts surveyed by Bloomberg. On the other hand, Microsoft is anticipated to register a 7% Y/Y revenue growth at USD 55.49 billion and a 13% Y/Y increase in Adj. EPS at USD 2.55. Given the significance of these big tech companies in the broader equity market, these earnings reports will likely have implications for the market as a whole. For a more in-depth analysis of the potential impact of these upcoming earnings on the broader equity market, you can refer to Charu Chanana’s article for further information.

Additionally, General Electric, 3M and Visa will inform about the global economy while Acher-Daniels-Midland can tell investors more about the performance of agricultural commodities and Raytheon about defence.

Adidas seeing surging demand for Yeezy shoes, improves earnings guidance

Demand for Adidas's Yeezy sneakers exceeded expectations in their first online sale since the company ended its collaboration with Kanye West. This could help restore the brand image of Adidas and reduces the risk of a large writedown on its remaining stock. Adidas received orders worth over 508 million euros for 4 million pairs of unsold Yeezy shoes at the end of May and early June. Adidas reports earnings on August 3 and shares are down 47% from the 2021 peak.


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.

Quarterly Outlook 2024 Q3

Sandcastle economics

01 / 07

  • Macro: Sandcastle economics

    Invest wisely in Q3 2024: Discover SaxoStrats' insights on navigating a stable yet fragile global economy.

    Read article
  • Bonds: What to do until inflation stabilises

    Discover strategies for managing bonds as US and European yields remain rangebound due to uncertain inflation and evolving monetary policies.

    Read article
  • Equities: Are we blowing bubbles again

    Explore key trends and opportunities in European equities and electrification theme as market dynamics echo 2021's rally.

    Read article
  • FX: Risk-on currencies to surge against havens

    Explore the outlook for USD, AUD, NZD, and EM carry trades as risk-on currencies are set to outperform in Q3 2024.

    Read article
  • Commodities: Energy and grains in focus as metals pause

    Energy and grains to shine as metals pause. Discover key trends and market drivers for commodities in Q3 2024.

    Read article
  • The rise of populism: Far-right parties will influence the future

    The disheartening cycle of unresolved geopolitical conflicts, the rise of polarizing political parties, and the stagnation of productivity.

    Read article
  • Investing in China: Navigating Q1 amid economic challenges

    Understand China's political landscape in Q4 2023 and the impact on counter-cyclical initiatives, with a focus on the pivotal Q1 2024.

    Read article

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.