Global Market Quick Take: Asia – July 7, 2023 Global Market Quick Take: Asia – July 7, 2023 Global Market Quick Take: Asia – July 7, 2023

Global Market Quick Take: Asia – July 7, 2023

Macro 6 minutes to read
Charu Chanana

Head of FX Strategy

Summary:  Risk off ensued in the US markets with stocks ad bonds being sold-off after a slew of hot economic data sending signal of re-heating in the US economy. Private ADP jobs data smashed expectations led by a surge in services jobs, while ISM services also beat expectations comfortably. US dollar however failed to get much strength, but other safe-havens such as JPY and CHF outperformed.

What’s happening in markets?

US equities (US500.I and USNAS100.I): Hot jobs and ISM numbers weigh

US equities plunged lower with S&P 500 taking a look below 4,400 before a slight recovery and closing down 0.8%. NASDAQ 100 also closed lower by 0.75% with Treasury yields seeing a push above critical levels as 2-year rose above 5% in the session and 10-year closed above 4%. NFP data in the US will be the next key test today and further strength could change the setup for equities from here after markets have been on a tear after banking crisis and debt ceiling risks were overturned and AI-led rally continued to add fuel. Meta, meanwhile, gave up its early-day gains despite launching its Twitter rival app Threads which saw over 30 million subscribers in a day.

Hong Kong & Chinese equities (HK50.I & 02846:xhkg): Tumble as China fears return

After the disappointment from Caixin services PMI earlier in the week, China economic concerns grew further as property sector risks re-emerged. Hang Seng Index was down 3% with Chinese banks leading the declines. CSI300 was down 0.7% and further tremors may be felt with fears of US Fed tightening gathering pace after strong private jobs data overnight.

FX: Choppy USD despite higher Treasury yields

Treasuries were sold off as US economic indicators suggested the economy was re-heating, but a weaker risk sentiment supported the safe havens JPY and CHF, but not the greenback. USDJPY slid below 144 in a choppy move while USDCHF touched lows of 0.8950. EURUSD stayed below 1.09 despite a surge in German factory orders, which seemingly came from a one-off military order. GBPUSD slumped 1 big figure from highs of 1.2780 before a recovery to 1.2740 as expectations of BOE terminal rate touching 7% rose. AUDUSD touched 0.66 big figure while NZDUSD slumped from 0.6220 to 0.6160.

Crude oil: mixed as risk off ensues

Crude oil prices were relatively unchanged, as the broader risk off sentiment was offset by signs of tightness in the market. Saudi Arabia lifted official selling prices for its flagship Arab light crude to all regions, a sign of stronger demand. EIA data showed crude stockpiles dropping for a third week as they slid by 1.5mn barrels. Saudi Arabia Energy Minister Prince Abdulaziz bin Salman said that recent output cuts will turn the tide of "exaggerated negativity" that has flooded the market. WTI prices slid below $70.50 before a recovery back to $72 while Brent touched lows of $75 before a return to $76.50.


What to consider?

US ISM shows services part of the economy may be reheating

The US services PMI for came in above expectations at 53.9 from 50.3 last and 51.2 expected. The jump was led by a massive surge in business activity, which rose from 51.5 to 59.2, well above the 51.9 forecast. The employment metric saw a strong rise, returning to expansionary territory at 53.1 from 49.2, which serves as an upside risk to today's NFP data due. New Orders also rose to 55.5 from 52.9, laying the path for future activity. Prices paid component cooled but still remained in expansion at 54.1 from 56.2.

ADP’s surge signals a tight US labor market

ADP report was also hot for June, rising 497k, well above the prior 267k and expected 225k. Job creation surged in June with strong gains in leisure and hospitality, trade and transportation, and education and health services, with total services gains coming is at a solid 373k. While ADP data can encounter double counting issues and lacks any direct correlation to the NFP data due today, there has emerged a risk of an upside surprise in NFP too after a series of strong economic data indicators over the last two weeks. July rate hike probability has jumped to 89% from 85% previously, and terminal rate forecast rose to 5.5% from 5.4% previously.

US NFP will be the next key test for yields

While the ADP data was hot, jobless claims and JOLTs job openings continued to signal that US labor market may be cooling, albeit at a slow pace. Initial Jobless Claims rose to 248k in the week ending July 1 from the downwardly revised 236k (initially 239k), just above the expected 245k. JOLTS job openings in May fell to 9.824mln from the prior 10.320mln, which was revised lower from the initial 10.103mln and coming in beneath the expected 9.935mln.

Next focus is the June NFP which could show headline gains of 225K from 339K in May, while the unemployment rate is expected to dip to 3.6% from 3.7% in April reversing part of the jump in April. Average hourly earnings is expected to slow slightly to 4.2% YoY from 4.3% previously, remaining unchanged at 0.3% MoM. Any hints of wage pressures remaining firmer could make the July rate hike a done deal, bringing 10-year yield further above the key 4% level.

Japan’s wage soar, BOJ comments on July tweak

Japan’s nominal labor cash earnings for May came in at 2.5% YoY, above the 1.2% expected and 0.8% in April. Real cash earnings was still negative at -1.2% YoY but better-than-expected -2.7% YoY. The numbers suggest that the higher pay negotiated at the spring wage negotiation in March may be now filtering through, and may prompt the central bank to consider tweaking its policy as market pressure sustains. BOJ Deputy Governor Uchida was on the wires saying that they will continue YCC “for the time being” to keep monetary conditions easy. He also noted there is still a long way to go before rate hikes and there are no plans to change the 2% inflation target


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.