A direct numerical simulation approach is used to investigate the effective non-linear viscoelastic stress response of non-gap-spanning magnetic chains suspended in a Newtonian fluid. The suspension is confined in a channel and the suspended clusters are formed under the influence of a constant external magnetic field. Large amplitude oscillatory shear (LAOS) tests are conducted to study the non-linear rheology of the system. The effect of inertia on the intensity of non-linearities is discussed for both magnetic and non-magnetic cases. By conducting magnetic sweep tests, the intensity and quality of the non-linear stress response are studied as a function of the strength of the external magnetic field. The Chebyshev expansion of the stress response is used to quantify the non-linear intra-cycle behaviour of the suspension. It is demonstrated that the system shows a strain-softening behaviour while the variation of the dynamic viscosity is highly sensitive to the external magnetic field. In a series of strain sweep tests, the overall non-linear viscoelastic behaviour of the system is also investigated for both a constant frequency and a constant strain-rate amplitude. It is shown that the intra-cycle behaviour of the system is different from its inter-cycle behaviour under LAOS tests.