Global Market Quick Take: Asia – March 28, 2024

Global Market Quick Take: Asia – March 28, 2024

Macro 6 minutes to read
Redmond Wong

Chief China Strategist

Summary:  USDJPY surged to 151.97, its highest in 34 years, then retreated slightly to around 151.30. Japan's Finance Minister issued a cautionary statement, signalling readiness for "decisive steps" against currency fluctuations. A joint emergency meeting of Japan's Ministry of Finance, Bank of Japan, and Financial Services Agency discussed yen weakening. Vice Finance Minister hinted at potential foreign exchange intervention. In the US, Trump Media & Technology soared 14.2%, while the S&P 500 rose 0.9% to 5,248 and Nasdaq 100 climbed 0.4% to 18,281. Core PCE data is due Friday, coinciding with the Good Friday market closure.


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

Equities: Risk sentiments abounded in the US equities market. Trump Media & Technology added 14.2% after surging 16% the day before. The S&P 500 gained 0.9% to 5,248 while the Nasdaq 100 climbed 0.4% to 18,281. Merck surged 5% following the approval of a potential blockbuster drug. Nvidia dropped by 2.5%, pulling back for the second day in a row. The US equity market will be closed for the Good Friday holiday on March 29. For long-term investors, read this Saxo article highlighting some attractive sectors for the longer term.

In Japan, the Nikkei 225 rallied amid a weaker Yen, rising 0.9% to 40,763, having its record highs in sight.

In Hong Kong, market sentiment soured as Alibaba's share price dropped 2.1% following the cancellation of its logistics subsidiary, Cainiao, coupled with persistent anxiety about a weaker renminbi dragged down by the Japanese Yen which hit a 34-year low on Wednesday. Also weighing on the market, EV stocks plunged 3%-6%, driven by a downbeat 3.6 million volume guidance from BYD, falling short of the 3.7 million expected by analysts. Factoring in the fast growth in exports, the growth in the domestic EV market looks decelerating and dampens the share prices of other EV stocks. The Hang Seng Index dropped by 1.4% and the mainland’s CSI300 finished 1.2% lower. The Hong Kong market has a busy earnings calendar today ahead of the long weekend starting on Friday.

FX:  On Wednesday, USDJPY surged to 151.97, reaching its highest level in 34 years, before slightly pulling back to around 151.30. Japan's Finance Minister, Shunichi Suzuki, issued a cautionary statement, indicating the Ministry of Finance's readiness to take "decisive steps" in reaction to currency fluctuations. Later in the day, the Ministry of Finance, the Bank of Japan, and the Financial Services Agency held an emergency meeting to discuss about the weakening of the yen. In the briefing from the meeting, Vice Finance Minister Masato Kanda said he “won’t rule out any steps to respond to disorderly FX moves”, hinting at the potential for foreign exchange intervention. He went on to say that the BOJ could respond with monetary policies as well if the yen’s fluctuations affect the economy and inflation.

Commodities: Oil pulled back slightly as prices bounced from intraday lows after a smaller-than-expected weekly increase in commercial crude inventory according to data released by the Energy Information Administration. Precious metals rallied modestly with gold and silver trading at around 2190 and silver to 24.60 in Asian morning on Thursday.

Fixed income: In the absence of economic data and ahead of the PCE data scheduled to be released on Friday when the market is closed to observe the Good Friday holiday, Treasuries rebounded moderately, with yields falling 2bps to 5bps across the yield curve. Investor demand was strong for the $43 billion 7-year notes auction. At the close, the 10-year yield was 4bps lower at 4.19%. Today the Treasury market will close early.

Macro:

  • The S&P affirmed the long-term and short-term sovereign credit ratings of the United States at AA+ and A1+ respectively and maintains its assessment of the credit rating outlook of the US as ‘stable’.
  • In the first two months of the year, China's industrial profits amounted to 9140.6 billion yuan, marking a turnaround from a 2.3% decline the previous year to a positive growth of 10.2%. Looking at sectoral performance, profits in mining declined by 21.1% year-on-year, while those in manufacturing grew by 17.4% and utilities increased by 63.1%. Among the 41 major industries, 29 experienced year-on-year profit growth. Notably, computer, communication, and other electronic equipment manufacturing saw profits double.

     

    Macro events: On Thursday: US Initial & Continuous Jobless Claims (weekly), US Chicago PMI (Mar), US Pending Home Sales U of Michigan Consumer Survey (March, Final), US GDP (Q4 3rd revision); On Friday: US PCE and core PCE inflation (Feb), US Persona Income and Consumption (Feb )

    Earnings: Bank of China , China Construction Bank, Agricultural Bank of China, Postal Savings Bank of China, China International Capital Corporation, China Galaxy Securities, Haitong Securities, China Pacific Insurance, China Overseas Land & Investment, China Vanke, Chinasoft, Great Wall Motor, Dongfeng Motor, Guangzhou Auto, Brilliance China, Changjiang Electric, Jiangxi Ganfeng Lithium.

    In the news:

  • Fed's Waller still sees 'no rush' to cut rates amid sticky inflation data (Reuters)
  • BOJ board divided over economic strength upon negative rate exit (Nikkei Asia)
  • US Is Asking Allies to Tighten Servicing of Chip Gear in China (Bloomberg)
  • Xi Jinping to China’s central bank: restart treasury-bond trade, after 2-decade hiatus (SCMP)
  • Oil Heads for Quarterly Advance as OPEC+ Holds the Line on Cuts (Bloomberg)

 

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

For a global look at markets – go to Inspiration


 

Quarterly Outlook

01 /

  • 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 ...
  • 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...
  • 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.