Global Market Quick Take: Asia – December 12, 2023

US Equities: US stocks saw cautious gains on Monday, despite the ‘Magnificent 7’ closing down as Meta slipped 2.2% and Nvidia slid 1.85%. Semiconductors, however, rose led by a ~9% surge in Broadcom and 4.3% gain in Intel which saw NASDAQ 100 outperforming. In the after-hours, Oracle dropped 9% following the announcement of Q2 results that showed a miss on revenues and forecasted Q3 revenue to come in lower than consensus amid an uncertain economy and competition in the cloud computing market. The S&P 500 held above 4,600.

Fixed income: Treasuries traded mixed ahead of key central bank announcements, showing little reaction to NY Fed survey of inflation expectations seeing cooling price pressures. The 3yr and 10yr auctions were poor and the 30yr auction will be in focus today. 2yr yields were down 1.3bps while the 10yr was up 0.8bps.

China/HK Equities: China equities came under pressure earlier on Monday after deflation concerns added to the current headwinds from property sector. However, there was a sharp rebound into the close of the session probably as bargain hunters stepped in. There are reports that China’s key meeting to discuss the GDP target is underway, and market participants may be watching for monetary, fiscal and industrial policy outlooks for next year to remain supportive. CSI 300 closed in gains of ~0.6% while HSI was down 0.8%.

FX: The dollar traded sideways on Monday with the fate of JPY turning steeply. USDJPY rose back to highs of 146.59 after the BOJ said that it sees little need to end negative rate in December after traders had started to pile in to hawkish BOJ bets following last week’s comments that had pushed USDJPY lower to 141.71. Other currencies were mostly on the sidelines ahead of the US CPI today and Fed announcement on Wednesday (Thursday morning in Asia). AUDUSD retreated slightly from 0.6580-levels while EURUSD took a look below 1.0750 before returning to 1.0765 later. Swiss franc strengthened however, with USDCHF down close to 0.8780 and EURCHF at 0.945 after strong gains on Friday.

Commodities: Crude oil prices remained steady with OPEC and IEA monthly oil market reports awaited this week. Gold saw a sharp plunge lower to $1980-levels with eyes on US inflation data and Fed announcement. Meanwhile, Copper declined despite concerns of a supply deficit going into 2024, as China’s deflation and underwhelming fiscal stimulus underpinned and focus turns to growth target and other announcements from Central Economic Work Conference today along with the US CPI.

Macro:

• NY Fed survey showed cooling inflation expectations, with one seen at 3.4% vs. 3.6% prior, the lowest since April 2021. Three-year ahead was unchanged at 3% and five-year ahead was unchanged at 2.7%.
• RBA Governor Bullock said this morning that Australia is not falling behind other countries in the fight against inflation, and that the bank will take a cautious approach with policy, keeping data on the radar.

Macro events: UK Employment, EZ & German ZEW, US NFIB, US CPI (tune in to our Macro podcast to know more), Japanese Tankan Index, EIA STEO

Earnings: BHP Group

In the news:

• Hasbro to lay off 900 more employees amid weak toy sales (Reuters)
• Xi Makes First Vietnam Visit in Six Years to Counter US Clout (Bloomberg)
• Taiwan Calls on US Support to Defend Banks Against Cyberattacks (Bloomberg)
• New COP28 draft text does not mention phase out of fossil fuels (Reuters)
• Semiconductor giants race to make next generation of cutting-edge chips (FT)

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

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