Equity Market Updates
Market Daily
14/01/2026
Macro Update:
Nikkei hits record high on "Takaichi Trade"
Japan equities stole the spotlight on Tuesday, as the Nikkei 225 surged 3.1% to a new all time high, driven by growing speculation that Prime Minister Sanae Takaichi might dissolve parliament for a snap election to cement her mandate for expansionary fiscal policy. We continue to stay positive on Japan equities. Meanwhile, the "Takaichi Trade" also sent the Japanese Yen tumbling toward 159 per dollar, the lowest in 1.5 years.
In the US, market sentiment was balanced between an unprecedented Department of Justice probe into Federal Reserve Chair Jerome Powell and a stabilising December CPI report, which showed headline inflation holding at 2.7% and core inflation at 2.6%. However, disappointing quarterly results from major lenders overshadowed the markets. Looking ahead, market awaits Wednesday's PPI and Thursday's retail sales data to gauge the economy's underlying momentum.
Main Upcoming Macro Indicators
US EQUITIES
US equities retreated from records on Tuesday as markets weighed muted US inflation data, mixed bank earnings and a jump in oil prices.
EUROPE EQUITIES
European shares ease from all time high, weighed down by the construction sector.
Europe’s main equity benchmark has had a stellar start to the year, prompting debate over how much good news is already priced in.
HK EQUITIES
Hong Kong stocks gave back part of their early-session gains but still managed to close higher.
The pullback followed local press reports that several funds have announced purchase restrictions.
SK Hynix (000660 KS)
SK Hynix said on Tuesday it has decided to invest KRW19T to build an advanced chip packaging plant in South Korea to meet rising memory chip demand related to artificial intelligence.
The chipmaker said in a statement that the construction of the new factory will begin in April, with completion targeted by the end of next year.
Accelerating global competition in AI is driving a sharp rise in demand for AI-focused memory, underscoring the need to respond proactively to growing demand for high-bandwidth memory (HBM) chips.
Hynix’s profit outlook continues to improve with ongoing increase in memory ASPs.
MARKET CONSENSUS: 42 BUYS, 1 HOLD, 1 SELL, AVERAGE TP KRW823892.75
Diageo (DGE LN)
Diageo is considering options for its Chinese assets, including potential divestments, people familiar with the matter said, as the maker of Guinness and Jonnie Walker seeks to streamline its portfolio.
The firm has been trimming its global holdings as falling alcohol consumption has impacted its attempts to get drinkers to trade up to pricier beverages.
Diageo would join a cadre of global companies reviewing their assets in the world’s 2nd larges economy amid intensifying competition from domestic players, which have evolved into nimble and sophisticated rivals with deep connections to local consumers.
MARKET CONSENSUS: 15 BUYS, 8 HOLDS, 3 SELLS, AVERAGE TP GBp2112.82
GigaDevice (603986 CH)
GigaDevices Semiconductor’s shares rose in its Hong Kong debut, underscoring growing investor interest in Chinese stocks related to AI.
GigaDevice’s Hong Kong debut comes amid memory-chip price gains driven by supply shortages, as global producers rush to meet surging needs for AI. It joins a flurry of Chinese tech listings, fueled by Beijing’s push to foster local competitors to the likes of Nvidia and Micron.
The firm mainly provides so-call niche memory chips. It was the world’s 2nd largest supplier of NOR Flash memory for cars, industrial automation and networking last year, according to a listing document filed.
MARKET CONSENSUS: 31 BUYS, 2 HOLDS, AVERAGE TP CNY250.94
JPMorgan (JPM US)
JPMorgan reported on Tuesday that its net revenue for 4Q25 came to $46.8B, 7% more than in the same period in 2024 and beating estimates. Net income fell by 7% to $13B, with diluted EPS down 4% to $4.63.
"These results were the product of strong execution, years of investment, a favorable market backdrop and selective deployment of excess capital. Looking ahead, we remain committed to investing our capital to drive future growth, and the Apple Card is one example of patient and thoughtful deployment of our excess capital into attractive opportunities," CEO Jamie Dimon said.
MARKET CONSENSUS: 19 BUYS, 13 HOLDS, 2 SELLS, AVERAGE TP USD337.91
Moderna (MRNA US)
Shares rallied 17% to close their best day since December 2022 after the company revealed that it expects full-year revenue for FY25 of approximately $1.9B, revising its previous estimates.
The drug maker also lifted its 2025 expenses projections to a range of $5B to $5.2B and affirmed its target of up to 10% revenue growth for FY26.
MARKET CONSENSUS: 4 BUYS, 19 HOLDS, 4 SELLS, AVERAGE TP USD36
Earnings Announcements
US Market
BofA, Wells Fargo, Citi
European Market
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HK - China Market
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Global Indices Changes (%)
Fixed Income Market Updates
Markets showed a mix of stability and cautious optimism. European bank bonds held steady after last week’s gains, while Asian bonds saw slight improvements, driven by new bond issues and local demand. However, with spreads already tight across many sectors, picking the right bonds will matter more this year as differences in credit quality become harder to spot. Investors are watching closely to see if this stability lasts or if risks like rising rates or weaker economic data could shake things up.
European Bank Coco (AT1)
European AT1 opened flat after last week’s strong rebound, with little direction from stock markets and slight weakness in government bonds. Raiffeisen Bank International launched a new AT1 bond, while UniCredit issued the tightest-ever euro AT1 at a 3% reset rate—though the new bond later dipped by 0.50 cents before stabilizing. Barclays underperformed briefly after political comments on credit cards, but its bonds recovered later. Going forward, investors will watch whether demand holds, especially as some Asian buyers add positions while others trim exposure.
Asia Investment Grade (IG)
Asian IG bonds firmed up slightly, helped by a drop in interest rates and strong demand for new issues. South Korean bonds like POSCO Holdings and SK Telecom America saw tight spreads, with local buyers driving activity. Japanese bonds also tightened, with investors favoring insurance and utility names, while Thai and Malaysian bonds traded in narrow ranges. China’s market stayed firm, with short-covering interest from hedge funds and steady demand for tech bonds like Alibaba and Meituan. The outlook remains positive if risk appetite holds, though profit-taking could limit further gains.
Asia High Yield (HY)
Asian HY bonds in Asia were mostly unchanged, with selective buying in India’s non-bank financial companies and Macau gaming bonds. China’s industrial sector saw continued interest, particularly in West China Cement, while property developers like New World Development held steady after recent weakness. The market appears to be stabilizing after a few softer sessions, but risks remain—especially if economic data disappoints. Investors will keep an eye on whether buying momentum can broaden beyond just a few sectors.
Forex Market Updates
The US Dollar Index was firmer yesterday, as the December CPI data printed roughly in line with expectations.
USD
The US Dollar was broadly higher following a brief dip on data showing that consumer prices were largely as economists expected last month. The U.S. currency briefly dipped after consumer prices were seen as potentially giving the Federal Reserve more room to cut rates as policymakers balance concerns about still sticky price pressures against a weakening labor market. Market reaction suggests that traders were positioned for a potentially larger increase in prices, noting risk-sensitive currencies including the Australian dollar rallied after the report. Fed officials are hedging about how much rising News Story will help return inflation to the U.S. central bank's 2% target, reiterating this week they need to keep interest rates at current levels until it becomes clearer that price pressures will ease.
The US Dollar Index may extend its decline as investors continue to process the implications of the Powell investigation, potentially driving the DXY down toward the 98.50 support level.
JPY
The Japanese Yen tumbled to its weakest level against the U.S. dollar since July 2024 on Tuesday on concerns about looser fiscal and monetary policy in the country. Japanese Prime Minister Sanae Takaichi may call an early general election, the head of her party's coalition partner said on Sunday, after media reported she was considering a February vote. It would give Takaichi a chance to capitalize on the strong public approval ratings she has enjoyed since taking office in October. The rapid weakening in the yen is also putting traders on watch for a possible intervention to shore up the currency. Japan's Finance Minister Satsuki Katayama said she and U.S. Treasury Secretary Scott Bessent shared concerns over what she called the yen's recent "one-sided depreciation", as Tokyo stepped up threats of intervention to stem the currency's fall.
The Yen should find some support at the psychological barrier of 160, with the previous high of 162 in view.
CAD
The Canadian Dollar edged lower against its U.S. counterpart on Tuesday as a downturn in stocks and recent widening of yield spreads weighed on the commodity-linked risk-sensitive currency. Oil prices and firm but contained U.S. dollar demand provided a mixed backdrop for the currency. Data on Friday showed a slowdown in the pace of Canadian job creation and a jump in the unemployment rate to 6.8%. With no major Canadian releases yesterday, price action was largely driven by external factors, including Fed-related headlines and broader risk sentiment. Later today, attention turns to the U.S. PPI.
USDCAD could trade range bound for now, between 1.3850 and 1.3950.
XAU
Gold hit a record high on Tuesday, as U.S. inflation data cemented bets on Federal Reserve rate cuts this year and persistent geopolitical and economic uncertainties drove safe-haven demand, while silver also hit a fresh peak. The U.S. core Consumer Price Index rose 0.2% month-on-month and 2.6% year-on-year in December, falling short of analysts' expectations of 0.3% and 2.7%, respectively. Trump reiterated his push to cut interest rates "meaningfully" after the inflation data. The Fed is expected to keep rates steady at its January 27-28 meeting, though investors currently anticipate two interest rate cuts this year. Lower interest rates tend to be favourable for non-yielding bullion.
The precious metal looks poised for a potential surge towards 4700 soon.
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