Global Market Quick Take: Asia – November 5, 2024

Key points:

• Macro: US election day ahead and latest polls show Harris gaining momentum
• Equities: Palantir surged 13% in after-hours on strong Q3 results and revenue guidance
• FX: USD weaker into the election day, JPY and MXN on watch
• Commodities: Oil surged near 3% as OPEC+ delays production increase by a month
• Fixed income:  Yield curve bull flattens

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Disclaimer: Past performance does not indicate future performance.

Macro:

• US election day ahead and the momentum has shifted slightly in favour of VP Kamala Harris after weekend polls and betting markets showed Trump losing momentum. Of the 7 key swing states, Harris leads in 4, Trump in 1 and 2 tied – but all are within the margin of error so the race still race tight. Saxo’s election hub has everything covered, from stocks to ETFs to bonds and FX or option strategies that can be useful in the volatile days ahead.
• On tap today, besides the US elections would be the China’s NPC that is underway from Nov 4-8 with eyes on a potential "bazooka" of stimulus although WSJ reported authorities will signal that China is not planning such a "bazooka". China’s Caixin services PMI for October is also due.

Equities: 

• US - S&P 500 fell 0.28% while Nasdaq 100 dropped 0.35% as markets traded lightly ahead of election day. Apple has begun a push into smart glasses with an internal study called “Atlas”.
• Palantir shares surged 13% in after-hours trading following strong third-quarter results and revenue guidance. The company reported a 30% YoY revenue increase, with net income rising to $143.5 million, or 6 cents per share, from $71.5 million, or 3 cents per share, a year earlier. Adjusted EPS were 10 cents, beating expectations of 9 cents, and revenue reached $726 million, surpassing the expected $701 million.
• Europe - European markets fell Monday ahead of the US election. The Stoxx 50 dropped 0.6%, and the Stoxx 600 decreased 0.3%. Technology stocks fell 1.1%, while banks rose 0.7%. Oil shares gained 0.4% on rising crude prices. Burberry shares jumped 4.8% on Moncler bid rumors.
• Japan - Starting November 5, the Tokyo Stock Exchange will extend its trading hours by 30 minutes, moving the closing time to 3:30 p.m., and introduce a closing auction session to boost market activity.
• Hong Kong – HSI rose 0.3% with gains led by tech and consumer stocks. Chinese stocks lifted sentiment as traders expected parliamentary approval for growth-boosting plans. Saudi Arabia's $1 billion fund for Hong Kong firms also supported the market.
• Earnings – Super Micro Computer, Apollo, Race, Melco, Coupang

FX:

• The US dollar started the election week on the backfoot after latest polls shifted slightly in favour of Harris, fuelling a reversal of some of the Trump trades which had seen higher Treasury yields and higher USD in the last few weeks. The race still remains tight and too close to call, and volatility can be expected in the next few days.
• Safe haven currencies Swiss franc and Japanese yen were the outperformers in the G10 FX space as Treasury yields fell and risk-off prevailed. USDJPY traded around the 152 mark, while  USDCHF slipped to lows of 0.8615.
• Commodity currencies were also in gains but lagged on the G10 board as further stimulus push from China was awaited given the NPC Standing Committee meeting is underway. NZDUSD took a look above 0.60 but could not hold, and AUDUSD traded close to 0.66 ahead of the RBA announcement due today.
• EURUSD also attempted a move above 1.09 amid dollar weakness, while EURGBP was close to the 0.84 handle.

Commodities:

• WTI crude oil futures jumped 2.9% as OPEC+ postponed a planned production increase, extending a 2.2 million bpd output cut into December due to weak demand and falling prices.
• Copper futures rose above $4.43 per pound on a weaker dollar and Chinese stimulus hopes, while Codelco reported increased third-quarter production of 338,000 tons.
• Gold steadied around $2,740 following two days of losses, bolstered by a weaker US dollar, as markets anticipated the US presidential election and the Federal Reserve's policy decision.

Fixed income:

• Treasuries gained as weaker demand for 3-year notes trimmed early advances following a sharp drop in yields. Weekend polls showed Vice President Harris gaining on former President Trump, including a lead in Iowa. Yields fell 3 to 8 basis points across the curve in a bull flattening trend, narrowing 2s10s and 5s30s spreads.

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