Global Market Quick Take: Asia – January 2, 2025

Key points:

• Macro: Australia home prices fell for the first time in almost 2 years
• Equities: S&P 500 rose 24%, Nasdaq 27%, and Dow 13% in 2024
• FX: USD continued to surge in the last month of 2024, gaining 2.6%
• Commodities: Cocoa tripled, coffee rose 75%, natural gas 55% in 2024
• Fixed income: In 2024, 10-year yield rose 50bps due to inflation risks

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Disclaimer: Past performance does not indicate future performance.

Macro:

• In December 2024, Australia's CoreLogic Home Value Index experienced a 0.1% month-on-month decrease, representing the first negative change in almost two years. This decline came after an unexpectedly strong growth phase from February 2023 to October 2024, despite challenges such as high interest rates, cost-of-living pressures, and decreased borrowing capacity.
• Singapore Q4 GDP grew 4.3% yoy, beating estimates of 3.8%. 2024 GDP growth is expected to be at 4% as announced by PM Wong earlier this week.

Equities: 

• US - In 2024, the S&P 500 rose 24%, Nasdaq gained 27%, and Dow increased nearly 13%. Nvidia, which surged almost 179% this year, fell 2.4% on Tuesday as traders took profits. Similarly, Tesla, up 63% year-to-date, experienced a 3.7% decline on Tuesday.
• Hong Kong - In 2024, it surged nearly 18%, ending four years of losses, driven by China's support measures and expected fiscal spending.
• Australia - The ASX 200 rose about 7.5% in 2024, driven by Fed rate cuts and anticipated U.S. tax and regulation changes under Trump.

FX:

• USD continued its strength towards the year end, with the DXY gaining a further 0.33% on the last day of 2024, taking the December monthly gain to 2.6% despite seasonality factors that favour a weak USD at the year end.
• In 2024, the CAD fell over 8% to 1.43 against USD, nearing its March 2020 low, due to economic struggles despite the Bank of Canada's easing policy. AUD fell 9% to below 0.62, influenced by the RBA's dovish shift, economic slowdown signs, and China's weak economy. NZD declined nearly 11% and EUR fell over 5%.
• MXN dropped 19% to 20.87 against USD, driven by economic reform concerns, U.S. dollar strength, and Banxico's rate cut, making it a poorly performing emerging market currency in 2024.

Commodities:

• Gold achieved a 26% gain in 2024, its best performance since 2010. Driven by U.S. monetary easing, geopolitical tensions, and central bank purchases, it outperformed most commodities despite a stronger U.S. dollar and higher Treasury yields.
• WTI crude oil hit $71 per barrel after three days of gains, supported by China's manufacturing growth, but still faces a slight annual loss.
• U.S. natural gas futures dropped 5.7% to $3.71/MMBtu but are poised for the largest annual gain since 2016 due to rising exports and strong LNG demand. European natural gas futures reached €48/MWh, up 45% this year, driven by supply concerns, cold weather, and halted Russian flows.
• In 2024, cocoa nearly tripled, becoming one of the top commodity gainers. Coffee also saw substantial gains, rising over 75%. Conversely, coking steel and soybeans were major losers, dropping around 44% and 25%, respectively.

Fixed income:

• In 2024, the 10-year yield increased by 50bps, influenced by slow disinflation and inflation risks from President-elect Trump’s proposed policies.

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