Market drivers and catalysts
Equities: US inched higher on AWS-led tech strength, Europe slipped on mixed earnings, Asia split as Japan hit records while China/HK fell
Volatility: steady vigilance, SPX ±1.4% move, skew slight call-lean, macro data focus
Digital Assets: BTC/ETH holding pattern, IBIT & ETHA small inflows, alts follow macro/liquidity
Currencies: US dollar and sterling firmed against a weaker euro.
Commodities: Gold holds above USD 4000, crude supported by OPEC+ constraint
Fixed Income: US Treasury yields eased slightly lower after FOMC-inspired runup earlier in the week.
Macro headlines
The White House announced Saturday that China will lift export controls on rare earths and end probes into U.S. semiconductor firms under a new trade pact. China will issue general export licenses for key materials, reversing previous curbs. In exchange, the U.S. will pause certain tariffs and cancel a planned levy on Chinese goods. China will halt restrictions on rare-earth magnets, while the U.S. eases some curbs on Chinese firms. Additionally, China pledged to buy 12 million metric tons of soybeans this season and 25 million tons annually for three years. The pact aims to reduce trade tensions affecting global markets. Trump told Xi that chip sales are "between you and Nvidia".
Friday, the Chicago PMI Business Barometer rose to 43.8 from 40.6, exceeding expectations. While below 50 for the 23rd month, it signaled the mildest contraction in three months, driven by a rebound in new orders and improvements in output and backlogs. Employment growth hit its lowest since February.
September 2025, Canadian GDP grew by 0.1%, indicating a similar increase in Q3 according to a flash estimate. This uptick follows a revised 0.3% contraction in August, the steepest monthly drop since December 2022, driven by Canada-U.S. trade war impacts and high BoC interest rates. Goods industries fell 0.6%, notably utilities by 2.3% and mining by 0.7%, due to lower global prices. Services dipped 0.1%, as transport and warehousing fell 1.7% and wholesale trade contracted 1.2%, despite retail trade's 0.9% gain. Year-on-year, GDP grew 0.7% in August.
Euro area consumer inflation fell to 2.1% in the flash estimate of October 2025 CPI, nearing the ECB's 2% target and meeting expectations. Food, alcohol, and tobacco prices rose 2.5% compared to 3.0% in September. Non-energy goods inflation dropped to 0.6%, and energy costs decreased by -1.0%. Meanwhile, services inflation increased to 3.4%, the highest since April, while core inflation, excluding energy and food, held at 2.4%.
Macro calendar highlights (times in GMT)
US Government data are impacted by shutdowns and are likely to be delayed
0730 – Switzerland Oct. CPI
1500 – US Oct. ISM Manufacturing (Delayed?)
0330 – Australia RBA Cash Target Announcement
Earnings events
Today: Palantir, Vertex Pharmaceuticals
Tue: AMD, Shopify, Arista, Uber, Amgen, Eaton, Pfizer, Spotify, Ferrari
Wed: Toyota, Novo Nordisk, McDonalds, AppLovin, Qualcomm, Robinhood, DoorDash
Thu: AstraZeneca, Rheinmetall
Fri: Constellation Energy, ConocoPhillips, KKR
For all macro, earnings, and dividend events check Saxo’s calendar.
Equities
USA: The S&P 500 rose 0.3%, the Nasdaq Composite 0.6%, and the Dow 0.1% as megacap tech outperformed into month-end. Amazon +9.6% powered the tape after a strong cloud print lifted confidence in AI workloads driving margins. Netflix +2.7% firmed after approving a 10-for-1 stock split. Energy was mixed as Chevron +2.7% advanced on results while Exxon Mobil −0.3% eased on softer profit. AbbVie −4.5% fell as drug-pricing and expense headlines offset a guidance lift. Attention turns to ISM services and Friday’s payrolls for the next macro cue.
Europe: European equities faded: Euro Stoxx 50 −0.7% and Stoxx 600 −0.5% as earnings misses met stable inflation and an ECB on hold. Linde −2.9% slipped on a cautious Q4 guide; AXA −4.4% weakened on mixed life/asset trends; Saint-Gobain −3.6% softened after its update; while Danske Bank +3.1% climbed on a profit beat and upper-end guidance. Month-to-date, broader European indices still finished higher as rate-cut hopes stayed intact.
Asia: Tone diverged across the region. Japan set fresh records with the Nikkei 225 +2.1% and Topix +0.9% as tech and exporters rallied. China/Hong Kong lagged on weak official PMIs—Hang Seng −1.4% to 25,907 and CSI 300 −1.5%—pressuring tech: Tencent −2.4% and SMIC −3.6%. Macro focus stays on whether Beijing’s policy support can offset manufacturing contraction while services tread water.
Volatility
Volatility has settled into a moderate range as markets brace for fresh data rather than global shocks. The SPX implied move this week is roughly ±96 points (~1.4 %), based on current option pricing. With the VIX at ~17.4 — comfortably below major stress levels yet elevated enough to signal some caution — investors are in “steady vigilance” mode.
Key upcoming catalysts include the US ISM manufacturing report, University of Michigan sentiment and JOLTS job openings. A stronger-than-expected print on any of these could snap markets out of their lull, pushing volatility higher; weaker prints may keep things quiet, but complacency is the risk.
On the skew front, this week’s expiration shows a slight call-lean (calls implied a hair richer than puts), suggesting the market is not aggressively prepping for a sharp downside — though that doesn’t mean a surprise can’t trigger one.
Digital Assets
Crypto remains in a holding pattern, again reflecting broader market sentiment rather than independent momentum. Bitcoin is trading just above ~$107k and Ether around ~$3.7k, both down roughly 2-5 % on the day. Notably, the spot ETF flows remain negative: the IBIT fund posted a small inflow (~+3.1 %) on Friday in contrast to the heavy outflows earlier in the week, while the ETHA fund shows a ~+5.5 % move (though absolute dollars remain modest). This could signal early signs of stabilisation or simply intra-week choppiness.
Outside BTC/ETH, look at Solana, XRP and other major alts—these tend to amplify the direction set by flows and macro. If risk appetite picks back up (e.g., via soft inflation or easing yields), crypto could get a modest lift; if macro surprises to the upside (raising yields) or dollar strength returns, crypto could drag again.
Fixed Income
US treasury yields retreated on Friday, with the benchmark 2-year treasury yield easing back a couple of basis points to 3.57% and the benchmark 10-year treasury down two basis points to 4.08%.
- US high yield bond spreads widened further, with the Bloomberg index we track of the spread between US treasuries and high yield bonds widening three basis points to close at the high of the week at 281 basis points.
Commodities
Gold remains rangebound around USD 4,000, with China’s decision to end tax rebates for some jewelry retailers having limited negative market impact as investment gold — including ETFs and bars — remains exempt. Support continues to be seen near USD 3,840, underpinned by ongoing concerns over U.S. fiscal imbalances, sticky inflation, currency debasement, persistent central bank demand, and expectations for further U.S. rate cuts into 2026.
Oil prices advanced after OPEC+ announced a pause on further production increases in the first quarter, following a modest 137 kb/d rise planned for December. Brent climbed above USD 65 per barrel, while WTI traded near USD 61. Actual output growth from the group remains well below the touted 2.2 mb/d this year, as some members offset earlier overproduction and others face capacity constraints, limiting the effective impact on global supply. Traders will look for comments from the ADIPEC conference starting today in Abu Dhabi.
Copper extended its decline on Friday, as traders judged that current fundamentals are insufficient to sustain prices above last year’s LME record. The drop followed weaker-than-expected economic data from China, renewed concerns about demand, a cautious tone from Fed Chair Powell on potential December rate cuts, and a U.S.–China trade deal that failed to address key structural issues.
Currencies
The US dollar firmed broadly again Friday, but with restrained volatility even as EURUSD broke to new lows since early August, trading below the prior range low of 1.1542, but only posting a 1.1522 low so far before consolidating. USDJPY price action was muted and sideways just above 154.00 after the big post-Bank of Japan move.
Sterling firmed sharply on Friday after its weakness earlier in the week, after an attempt to hit new highs in EURGBP above 0.8818 was rejected. The pair dipped back to 0.8775, hovering just above the 0.8750-60 area that capped the exchange rate multiple times since early 2023 and ahead of the Bank of England decision on Thursday of this week.
The Australian dollar firmed broadly overnight ahead of Tuesday’s RBA meeting that is not expected to produce any policy adjustment. The Aussie rose to new three-year highs versus the New Zealand dollar above 1.1450 as AUDNZD eyes the highest level since 2013, the 1.1491 level from late 2022.
