Global Market Quick Take: Asia – January 11, 2024

Macro 5 minutes to read
Saxo Be Invested
APAC Research

Summary:  The Japanese Yen experienced steep declines, with USDJPY reaching 145.83, nearing a test of 146. Notable movements occurred in crosses, with EURJPY testing 160, the highest since December. The Nasdaq 100 and S&P 500 approached record highs at 16,793 and 4,783, respectively. Meta surged 3.7% post a positive analyst report. The SEC approved spot bitcoin ETFs. Focus turns to the US CPI report today and the start of the US earnings season, featuring leading U.S. banks tomorrow.


Saxo’s Q1 2024 Outlook titled “What happened to the future” is now out. You can read it here.

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

US Equities: The Nasdaq 100 Index climbed 0.7% to 16,793, and the S&P 500 Index added 0.6% to 4,783, both just a touch shy of record highs. Meta rose 3.7% after a favorable analyst report. Nvidia gained 2.3%, and Microsoft was 1.9% higher. The SEC approved several spot bitcoin ETFs for the first time for trade starting Thursday. These approved ETFs include ARK 21Shares Bitcoin ETF, Bitwise Bitcoin ETF, Blackrock’s iShares Bitcoin Trust, Hashdex Bitcoin ETF, Fidelity Wise Origin Bitcoin Fund, Franklin Bitcoin ETF, Grayscale Bitcoin Trust GBTC, Invesco Galaxy Bitcoin ETF, Valkyrie Bitcoin Fund, VanEck Bitcoin Trust, and WisdomTree Bitcoin Fund. Eyes are now on the CPI report later today and the kickoff of the earnings season with leading U.S. banks reporting tomorrow.

Fixed income: Ahead of the CPI data on Thursday, Treasuries were steady. The 2-year yield ticked down 1bp to 4.36%, while the 10-year yield edged up 2bps to 4.03%. The money market is pricing in an approximately 70% chance of a 25bp rate cut at the March FOMC. Increasing discussion among traders about the timing of a slowdown or end to quantitative tightening has also increased. For more information, see this Saxo article.

China/HK Equities: The Hang Seng Index declined for the seventh consecutive day, falling 0.6% on Wednesday. The weakness was across the board, with notable underperformance in auto names. Pharmaceutical stocks bucked the market decline, seeing some gains. The CSI300 shed 0.5% while healthcare and solar outperformed. In anticipation of monetary easing, deflation, and sluggish economic growth, the Chinese 10-year government bond yield fell below 2.5% to close at 2.49%. At the CES consumer electronics show in Las Vegas, Xpeng announced that it will begin accepting orders for its flying cars later this year, with deliveries scheduled for late 2025.

FX: The dollar was mostly sideways ahead of the US CPI data scheduled for release today, however steep declines seen in the Japanese yen again. USDJPY rose to highs of 145.83, approaching a test of 146 which has held up last week and also for much of December. Bigger moves however seen on the crosses, with EURJPY testing 160, the highest levels since the start of December, and GBPJPY just shy of 186. EUR strength was also broad, and EURUSD surged above 1.0970 and 1.10 remains on watch. AUDUSD stuck around 0.67 despite the miss in Nov CPI yesterday, while kiwi slipped. Bitcoin was back in the spotlight following the SEC approval of ETFs, and XBTUSD now trades above 46,500 after an initial gain to over 47,500.

Commodities: Crude oil traded lower after the EIA reported a surprise 1.3m barrels stock build driven by a 2m b/d export slump, coming in contrast to API data that had shown inventory drawdown. Supply concerns also however accelerated with Houthi rebels escalating attacks. Gold struggled to keep its gains and reversed after touching $2,040, slipping back lower to sub-$2,030 levels.

Macro: Fed’s John Williams (voter) said that monetary policy is tight enough to nudge inflation down to the Fed’s 2% goal but policymakers need more evidence before they can “dial back” interest rates. He noted that risks to the economy are two sided, and rate decisions will be made meeting-by-meeting and driven by the totality of data. The NY Fed President sees 2024 GDP at around 1.25% (beneath Fed median Dec SEP of 1.4%), 2024 unemployment at 4% (beneath Fed median of 4.1%), 2024 inflation at 2.25% (beneath Fed median of 2.4%) and 2% in 2025 (beneath Fed median of 2.1%).

Macro events: US CPI (Dec) – preview here, US Jobless Claims, US Budget (Dec), Italy Industrial Production (Nov), Spain Industrial Production (Nov), Japan Regional Economic Report (Jan), Japan Economic Coincident Index (Nov).

Earnings: Infosys, Tesco, Marks & Spencer, Fast Retailing, Seven I, Largan Precision, Tata Consultancy

In the news:

  • US SEC approves bitcoin ETFs in watershed for crypto market (Reuters)
  • BlackRock, Ark lower fee for planned spot bitcoin ETFs  (Reuters)
  • Nikkei 225 hits highest since Japan's 1990 bubble economy era (Japan Times)
  • US, UK forces repel 'largest attack' by Houthis in Red Sea (Reuters)
  • China Tensions Dominate Taiwan Election as Voters Head to Polls (Bloomberg)
  • Focus: At CES, legacy automakers scramble to keep up in AI arms race (Reuters)
  • Xpeng to deliver flying cars 'in 2025' as China aims to lead in rule-setting (Nikkei Asia)

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

For a global look at markets – go to Inspiration.


 

 

 

Quarterly Outlook

01 /

  • Macro Outlook: The US rate cut cycle has begun

    Quarterly Outlook

    Macro Outlook: The US rate cut cycle has begun

    Peter Garnry

    Chief Investment Strategist

    The Fed started the US rate cut cycle in Q3 and in this macro outlook we will explore how the rate c...
  • 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

  • Equity Outlook: Will lower rates lift all boats in equities?

    Quarterly Outlook

    Equity Outlook: Will lower rates lift all boats in equities?

    Peter Garnry

    Chief Investment Strategist

    After a period of historically high equity index concentration driven by the 'Magnificent Seven' sto...
  • FX Outlook: USD in limbo amid political and policy jitters

    Quarterly Outlook

    FX Outlook: USD in limbo amid political and policy jitters

    Charu Chanana

    Chief Investment Strategist

    As we enter the final quarter of 2024, currency markets are set for heightened turbulence due to US ...
  • Commodity Outlook: Gold and silver continue to shine bright

    Quarterly Outlook

    Commodity Outlook: Gold and silver continue to shine bright

    Ole Hansen

    Head of Commodity Strategy

  • FX: Risk-on currencies to surge against havens

    Quarterly Outlook

    FX: Risk-on currencies to surge against havens

    Charu Chanana

    Chief Investment Strategist

    Explore the outlook for USD, AUD, NZD, and EM carry trades as risk-on currencies are set to outperfo...
  • Equities: Are we blowing bubbles again

    Quarterly Outlook

    Equities: Are we blowing bubbles again

    Peter Garnry

    Chief Investment Strategist

    Explore key trends and opportunities in European equities and electrification theme as market dynami...
  • Macro: Sandcastle economics

    Quarterly Outlook

    Macro: Sandcastle economics

    Peter Garnry

    Chief Investment Strategist

    Explore the "two-lane economy," European equities, energy commodities, and the impact of US fiscal p...
  • Bonds: What to do until inflation stabilises

    Quarterly Outlook

    Bonds: What to do until inflation stabilises

    Althea Spinozzi

    Head of Fixed Income Strategy

    Discover strategies for managing bonds as US and European yields remain rangebound due to uncertain ...
  • Commodities: Energy and grains in focus as metals pause

    Quarterly Outlook

    Commodities: Energy and grains in focus as metals pause

    Ole Hansen

    Head of Commodity Strategy

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

Disclaimer

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 Inspiration Disclaimer and (v) Notices applying to Trade Inspiration, 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.

Trading in financial instruments carries risk, and may not be suitable for you. Past performance is not indicative of future performance. Please read our disclaimers:
Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
Full disclaimer (https://www.home.saxo/en-sg/legal/disclaimer/saxo-disclaimer)

None of the information contained here constitutes an offer to purchase or sell a financial instrument, or to make any investments. Saxo Markets 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 Markets or its affiliates.

Saxo Markets
88 Market Street
CapitaSpring #31-01
Singapore 048948

Contact Saxo

Select region

Singapore
Singapore

Saxo Capital Markets Pte Ltd ('Saxo Markets') is a company authorised and regulated by the Monetary Authority of Singapore (MAS) [Co. Reg. No.: 200601141M ] and is a wholly owned subsidiary of Saxo Bank A/S, headquartered in Denmark. Please refer to our General Business Terms & Risk Warning to consider whether acquiring or continuing to hold financial products is suitable for you, prior to opening an account and investing in a financial product.

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 such as Margin FX products may result in your losses exceeding your initial deposits. Saxo Markets does not provide financial advice, any information available on this website is ‘general’ in nature and for informational purposes only. Saxo Markets does not take into account an individual’s needs, objectives or financial situation.

The Saxo trading platform has received numerous awards and recognition. For details of these awards and information on awards visit www.home.saxo/en-sg/about-us/awards.

The information or the products and services referred to on this website 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 intended for residents of the United States, Malaysia and Japan. Please click here to view our full disclaimer.

This advertisement has not been reviewed by the Monetary Authority of Singapore.

Apple and the Apple logo are trademarks of Apple Inc, registered in the US and other countries and regions. App Store is a service mark of Apple Inc. Google Play and the Google Play logo are trademarks of Google LLC.