Global Market Quick Take: Asia – December 2, 2024

Key points:

• Macro: China Nov manufacturing PMI beats
• Equities: CSI 300 rallied 1.1% on Friday, driven by stimulus expectations
• FX: Euro drops on worries about political tension in France
• Commodities: Oil and gold fluctuate amid geopolitical tensions
• Fixed income: 10-year yields declined to a five-week low

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Disclaimer: Past performance does not indicate future performance.

Macro:

• China Nov manufacturing PMI came in at 50.3, beating expectations while non-manufacturing PMI came up short at 50 vs 50.3 estimate.
• Finance Minister Antoine Armand affirmed that France will not comply with budget deadlines set by Marine Le Pen. The far-right leader has urged the prime minister to revise the 2025 budget by Monday, coinciding with the expected initiation of a no-confidence vote by opposition lawmakers.
• Ueda said in an exclusive interview with Nikkei that the weakening of the yen coupled with inflation rising above 2% may pose a large risk and require countermeasures, suggesting that interest rate hikes are nearing.

Equities: 

• US - The S&P 500 and Dow Jones reached new record highs with gains of 0.6% and 0.4%, respectively with semiconductor companies leading - Nvidia, Applied Materials, and Lam Research added 2.2%, 2%, and 3.2% respectively.
• China - CSI 300 rallied 1.1% on Friday, driven by expectations of new stimulus measures from Beijing. Markets await key policy meetings and Chinese PMI data, despite concerns over potential US trade tariffs. Baidu received a license to test autonomous Apollo Go Robotaxi service in Hong Kong as it expands beyond the Chinese Mainland.
• Earnings - Zscaler

FX:

• The euro fell on concerns that French Prime Minister Michel Barnier might be ousted this week, while the dollar strengthened due to US economic strength and demand for safe-haven assets. EURUSD dropped 0.3% to 1.0540.
• USDJPY rose 0.1% to 149.89 after a 1.2% fall on Friday. Bank of Japan Governor Kazuo Ueda indicated interest-rate hikes are "nearing" as trends meet forecasts.
• AUDUSD held steady at 0.6512, trimming its monthly decline to 1.1%.
• NZDUSD remained stable at 0.5914, down 1% in November for a second monthly drop.

Commodities:

• WTI crude oil dropped 1% to $68 amid Israel-Hezbollah tensions and Putin's missile warning. Traders awaited OPEC+'s December 5th meeting to decide on supply restoration or extended cuts, with oil prices set to decline 3% weekly. Brent crude fell 1.3%.
• Gold rose 0.2% to over $2,640, marking a fourth consecutive session of gains due to a weaker US dollar and geopolitical tensions. Despite this, gold is expected to decline 2% for the week as markets await US data for Federal Reserve insights. Silver rose 1.3% to above $30.6.
• Copper futures rose to $4.10 per pound on Friday, recovering losses amid speculation of additional Beijing stimulus to counteract potential impacts from Trump's proposed tariffs.

Fixed income:

• On Friday, Treasuries rose as 10-year yields fell to a five-week low, reducing yields by at least 5 basis points. Month-end index rebalancing at 1 PM New York time increased duration by about 0.11 years, prompting investors to extend duration, with futures volume spiking.

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