Global Market Quick Take: Asia – March 12, 2024 Global Market Quick Take: Asia – March 12, 2024 Global Market Quick Take: Asia – March 12, 2024

Global Market Quick Take: Asia – March 12, 2024

Macro 6 minutes to read
APAC Research

Summary:  Tech sentiment continued to weaken and drag on broader equities, even as Gold consolidated and Bitcoin printed fresh highs. Oracle jumped 13% in after-hours on strong earnings. In the FX space, Japanese yen outperformed with eyes now turning to US CPI release and Japan’s wage talk results. GBP eyes UK labor data, and could be prone to deteriorating equity sentiment. China’s NPC ended on an underwhelming note, and further measures will be awaited.


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

US Equities: Ahead of the CPI release, the S&P 500 Index ticked down by 0.1% while the Nasdaq 100 Index pulled back 0.4%. Nvidia declined for the second day in a row, falling 2%. Meta, shedding 4.4%, was the worst performer in the Nasdaq 100, followed by Advanced Micro Devices. Surging 8.7%, Moderna was the best former in the S&P 500 and the Nasdaq 100. In the extended hours, Oracle jumped more than 13% after it reported a 7% Y/Y growth in revenue to $13.3 billion, in line with analyst estimates but the management said growth could be higher if not due to supply constraints. The enterprise software giant beat earnings forecasts with an EPS of $1.41, surpassing $1.38 projected by analysts.

Hong Kong/China Equities: The Hang Seng Index surged 1.4% to 16,588, driven by the reduction of deflation fears following a larger-than-expected CPI increase in China. Positive market sentiment was further supported by the chairman of Hong Kong's Securities and Futures Commission calling for a lower minimum asset requirement for south-bound Stock Connect investors, potentially boosting mainland investment in stocks traded in Hong Kong. Notable sector outperformance included China's Internet, EV, and consumer names, with Bilibili rising 11.6% and JD.com gaining over 6%. The solar space also witnessed positive momentum, as Xinyi Solar gained 11.2% on reported declines in photovoltaic glass inventory. In the A-share market, the CSI300 climbed 1.3%, driven by new energy stocks, particularly lithium battery companies like CATL, which surged more than 14%. Despite the market's resilience on Monday, the underwhelming Two Sessions, the Chinese authorities' firm stance on deleveraging the property sector, and the widening volume decline in property sales in the 21 major cities in March so far may limit the improvement in the market sentiments.

Fixed income: Treasuries pulled back, with yields rising most in the short end of the curve ahead of today’s CPI report. The rise in the 3-year and 5-year inflation expectations in the New York Fed’s survey of consumers had muted impacts. The 2-year yield rose 6bps to 4.54% while the 10-year yield added 2bps to 4.10%.

FX: The dollar saw mild gains, but DXY index faced resistance at 103. Japanese yen was the outperformer in G10 and the only currency that could end up in gains. USDJPY eyeing a test of 200DMA at 146.25 break of which opens the door to Feb low of 145.90 especially is US CPI reaffirms soft landing hopes today. Equity sentiment turning sour weighed on the closely correlated sterling and GBPUSD was the worst performer of the day as it slipped to 1.28 handle and EURGBP bounced higher from 0.85 support. UK wage data is due today and sticky wages could support sterling. EURUSD also stayed rather resilient and bounced higher from 1.0915. AUDUSD tested the 0.66 handle but was seen bouncing higher to 0.6620 in early Asian hours. Bitcoin (XBTUSD) rallied to fresh record highs of 72K amid ETF demand frenzy and fears of coin supply shortage.

Commodities: The rally in Gold seems to have cooled ahead of the US CPI release today, and the 3% gains of the last week could be at risk if a hot print is seen. However, if we get a soft print, $2,200 may be on the radar for yellow metal which is supported by central bank buying and safe-haven demand as well. Iron ore futures slumped over 6% in Singapore on Monday as stockpiles in Chinese ports were the highest in a year, signaling pressure in real estate and manufacturing sectors. Crude meanwhile trading mixed ahead of US inflation, as well as oil market reports from OPEC and EIA on tap.

Macro:

  • US CPI preview: Markets will be watching the US inflation release for February today. Headline CPI is expected to come in firm at 3.1% YoY and slightly stronger on a MoM basis at 0.4% from 0.3% in Jan. Core CPI is expected to soften to 3.7% YoY from 3.9% and 0.3% MoM from 0.4% in Jan. Saxo’s Strats team expect the market is positioned for a softer or mildly hot print, that will reaffirm soft-landing hopes, and this could bring Nasdaq 100 up as much as 1%, USDJPY lower to test Feb lows of 145.90 and broadly support commodities like silver, copper and Gold. An upside surprise could mean as much as 3% correction in Gold. For more details, read this article.
  • Japan’s February PPI was also stronger than expected and prior prints as it came in at 0.6% YoY (vs. 0.2% prior, 0.5% exp) and 0.2% MoM (0.0% prior, 0.1% exp). BOJ’s Ueda speaks in the parliament today at 0200 GMT.

Macro events: EIA STEO, OPEC OMR; UK Labour Market Report (Jan/Feb), US CPI (Feb)

Earnings: Archer-Daniels-Midland, Assicurazioni Gernerali, MINISO, Qifu Technology

In the news:

  • Biden Budget Seeks More Aid for Families, Higher Taxes on Wealthy Households, Corporations (WSJ)
  • Hong Kong’s SFC proposes slashing Stock Connect threshold by 80% to draw mainland Chinese funds to city’s market (SCMP)
  • Chinese regulators ask large banks to step up support for Vanke (Reuters)
  • White House Forecasts Somewhat Higher Interest Rates (WSJ)
  • US companies to announce investments of over $1 bln in the Philippines (Reuters)
  • OPEC, IEA at most divided on oil demand since at least 2008 (Reuters)
  • Reddit Launches Long-Awaited IPO With $748 Million Target (Bloomberg)

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

For a global look at markets – go to Inspiration

 

 

 

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.