Global Market Quick Take: Asia – March 26, 2024

Equities: The S&P 500 and Nasdaq 100 both pulled back 0.3%, retreating for the second day in a row. Bucking the decline, Super Micro Computer and Micron Technology surged 7.2% and 6.3% respectively. Take-Two Interactive was the worst-performing stock among the S&P 500, falling 4.2% after a reported delay in the latest instalment of a blockbuster game.

Likewise, the Nikkei 225 pulled back from its record high, down 1.2% to close at 40,414. In China and Hong Kong, the Hang Seng Index and CSI300 fluctuated between small gains and losses, finishing the session 0.2% and 0.5% lower despite China’s central bank fixed the renminbi basket on the strong side, and better-than-expected earnings from China Hongqiao, seeing its share price surge 13.4%. BYD, China Telecom, and Anta Sports are reporting results today.

FX: As USDJPY hovered above 151, Masto Kanda, Vice Finance Minister for International Affairs, who is Japan’s top currency official, warned about “clearly seeing speculative movements in FX markets” on Monday. While Kanda’s remarks have increased the probability of the Minister of Finance’s intervention to draw a line to stop the weakening of the Yen, market reactions were muted, with USDJPY trading at around 151,40 in Tokyo Tuesday morning. Meanwhile, USDCNH reversed nearly all its gain from last Friday, plunging to finish Monday at around 7.2530 after the People’s Bank of China fixed the USDCNY rate at 7.0996 and sold USDCNY heavily in the onshore market.

Commodities:  WTI crude oil and Brent crude oil front month futures both climbed 1.6% to $81.95 and $86.75 respectively as Ukrainian drones hit another Russian oil refinery, adding to the list of casualties of Russian refining infrastructure, estimated to amount to 7% of Russian capacity that has been knocked out by drone attacks. A decline in oil drilling rig count in the US also added to traders’ concerns about supply.

Fixed income: Treasuries pulled back from their post-FOMC rallies, with yields climbing across the yield curve. The $66 billion 2-year Treasury note auction met with subdue demand. The benchmark 10-year yield finished the session 5bps higher at 4.25%.

Macro:

• The US released a mixed bag of data, with new home sales sliding to 662k, below 677k expected in February while the January data was modestly revised up to 664k from previously reported 661k. The Chicago Fed National Activity Index came in at 0.05, stronger than the -0.34 expected and last month’s -0.54 (revised down from -0.3) but the Dallas Fed Manufacturing Activity  Index weakened to -14.4 from -11.3, below the -10.0 expected.

Macro events: US Durable Goods Orders (Feb), US Conference Board Consumer Confidence (Mar), Germany GfK Consumer Confidence (Apr), Singapore Industrial Production (Feb)

Earnings: BYD, China Telecom, Nongfu Spring, CITIC Securities, PICC Property & Casualty, ANTA Sports, People’s Insurance, SF Holding

In the news:

• Japan Inc. to return record $165bn to shareholders as profits rise (Nikkei Asia)
• Trump Can Post Smaller $175 Million Bond in Civil Fraud Case (WSJ)
• Biggest Challenge Facing New Boeing CEO Is Winning Over Airlines (Bloomberg)
• Japan's corporate service inflation steady in February (Reuters)
• New chairman is named for US House select committee on China (SCMP)
• CATL to Keep Expanding in the Face of Slower EV Growth, Chairman Says (Bloomberg)
• Mumbai becomes Asia's billionaire capital, topped by Mukesh Ambani (Nikkei Asia)

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

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