Market drivers and catalysts
Equities: U.S. tech sold off on chips and capex fears, Europe mixed with sharp stock dispersion, Asia steady on China services optimism.
Volatility: Short-dated volatility elevated as central banks and U.S. data keep investors cautious.
Digital assets: Crypto weaker; IBIT and ETHA soft as risk appetite remains fragile.
Currencies: USD sees new and broad comeback. EURUSD threatening local support.
Commodities: Fresh silver slump on souring sentiment in Asia; a record weekly stockpile draw expected in natural gas.
Fixed income: Long Japanese government bonds find buyers, US treasuries steady.
Macro events: Bank of England, ECB, US JOLTS job openings.
Macro headlines
US private businesses added 22K jobs in January, led by health care with 74K. Medium-sized firms gained 37K jobs, while large employers lost 18K. Professional services dropped 57K jobs, and manufacturing fell 8K. Job creation slowed in 2025 to 398K from 771K in 2024, with stable wage growth, per ADP's Dr. Nela Richardson. US private businesses added 22K jobs, led by health care with 74K. Medium-sized firms gained 37K jobs, while large employers lost 18K. Professional services dropped 57K jobs, and manufacturing fell 8K. Job creation slowed in 2025 to 398K from 771K in 2024, with stable wage growth, per ADP's Dr. Nela Richardson.
Trump and President Xi discussed trade, military, and Trump's China visit in a call. Xi stressed positive US relations and caution on Taiwan. VP Vance proposed a critical minerals trade bloc, and USTR Greer will detail the agreement.
US ISM Services PMI stayed at 53.8 in January 2026, beating the 53.5 forecast. Business activity grew, but new orders, employment, and supplier deliveries slowed. Inventories and backlogs contracted, while price pressures increased. ISM's Steve Miller noted tariff impacts and geopolitical tensions affecting pricing.
The S&P Global Canada Composite PMI dropped to 46.4, below the neutral 50.0 for a third month. Services declined to 45.8, driving the slump, while manufacturing stabilised. New business fell for the 14th month, affecting output. Employment saw a slight decline, and business confidence weakened. Input cost inflation eased, but output charges remained steady.
US Services PMI increased to 52.7 in January 2026 from 52.5, marking three years of growth. Domestic sales offset tariff-related foreign softness and marginally increased employment. Higher payroll costs and tariffs raised input inflation. Business confidence dipped to a three-month low.
Tehran will engage in talks with Washington on Friday in Oman, easing concerns over oil disruptions. Iran seeks to focus on nuclear issues, while the US wants to also address missiles, regional militancy, and human rights.
Macro calendar highlights (times in GMT)
0700 – Germany Dec. Factory Orders
0900 – Eurozone Dec. Retail Sales
1200 – UK Bank of England Rate Decision
1230 – US Jan. Challenger Job Cuts
1315 – ECB Rate Decision
1330 – Czechia Central Bank Rate Announcement
1330 – US Weekly Initial Weekly Jobless Claims
1345 – ECB President Lagarde Press Conference
1500 – US Dec. JOLTS Job Openings
1530 – EIAs Weekly Natural Gas Storage Change
1740 – Canada Bank of Canada Governor Macklem to speak
1900 – Mexico Rate Announcement
2230 – Australia RBA Governor Bullock testimony to parliament
Earnings events
Today: Amazon.com, Shell, Linde, Unilver, KKR
Friday: Toyota, Philip Morris
For all macro, earnings, and dividend events check Saxo’s calendar.
Equities
USA: U.S. equities ended mixed, with the S&P 500 down 0.5%, the Nasdaq falling 1.8%, and the Dow rising 0.5%. Semiconductor selling intensified after AMD dropped 17.3% on a weak outlook, dragging Micron, Broadcom, Lam Research, and Applied Materials sharply lower, while Uber fell 5.2% after missing earnings. Outside tech, defensives outperformed as Amgen surged 8.2% on earnings and Eli Lilly jumped 10.3% on strong Zepbound and Mounjaro sales, supporting healthcare and the Dow. After hours, Alphabet beat on sales but shares slid on sharply higher capex guidance, keeping focus on AI spending discipline.
Europe: European equities were mixed, with the STOXX 50 down 0.4% and the STOXX 600 flat. Tech pressure followed the U.S. lead as ASML fell nearly 5%, while Infineon outperformed on strong earnings. Siemens dropped 6.4% after announcing a $1 billion U.S. manufacturing investment, Santander fell 3.5% after earnings and its Webster Bank acquisition, and UBS slid almost 6%. Novo Nordisk plunged 17.2% on a weaker drug outlook, while Air Liquide and BASF gained on hopes of softer EU emissions rules as easing inflation supported banks.
Asia: Asian markets were steadier, with Hong Kong’s Hang Seng edging up to 26,847 and extending gains for a second session. Sentiment improved after a private survey showed China’s services sector expanding at its fastest pace in three months, while mainland markets also rose as policymakers convened ahead of March meetings. In Hong Kong, CK Hutchison gained 2.1%, with China Resources Land, Pop Mart, and Nongfu advancing on domestic demand optimism. Tech lagged as Tencent fell 3.7% and SMIC dropped 2.3% on renewed AI-related concerns, keeping investors selective into the holiday period.
Volatility
Market volatility remains elevated but contained. The VIX closed at 18.64 on Wednesday, a level that signals caution rather than stress, while short-dated measures stayed higher, reflecting investor sensitivity to near-term headlines. This fits a market that is reacting day-by-day to macro signals rather than pricing a deeper drawdown.
Attention today is on central bank communication from the bank of england and the ecb, alongside U.S. labour market data, including initial jobless claims and JOLTS. With earnings season still active, these events can quickly shift sentiment, especially after recent weakness in global technology stocks.
SPX expected move: based on current options pricing, the market is implying a move of roughly ±84 points (±1.2%) into Friday, 6 February.
0DTE skew (today’s expiry): near the current index level, upside protection is priced richer than downside, indicating demand for calls over puts into the close. This “reverse skew” suggests investors are cautious but still guarding against sharp rebounds.
Digital assets
Digital assets weakened further, extending their pullback as broader risk sentiment stayed fragile. Bitcoin traded around $70,700, while ether slipped toward $2,080, with major altcoins such as solana (~$90) and xrp (~$1.42) also under pressure. The move mirrors ongoing volatility in global equities, reinforcing crypto’s behaviour as a risk-sensitive asset in the current environment.
For investors, the key signal remains ETF demand. Both IBIT and ETHA traded lower in the latest session, reflecting a lack of fresh inflows rather than forced selling. As long as equity volatility remains elevated, crypto may struggle to stabilise decisively. A shift toward steadier prices in IBIT and ETHA would be an early sign that risk appetite is improving.
Fixed income
US treasury yields edged very slightly lower in a quiet trading session, ignoring the drama in equity markets. The benchmark US 2-year treasury yield fell more than two basis points by late Asian hours on Thursday relative to the Tuesday’s US closing levels, trading below 3.55%, while the benchmark 10-year treasury yield likely eased slightly lower to 4.26%.
Long Japanese government bonds see buying interest Thursday. The Japanese government bond yield curve bull flattened as he benchmark 2-year benchmark JGB yield was unchanged on the day near the cycle high at 1.28% while the benchmark JGB yield fell almost two basis points to 2.4% and the benchmark 30-year JGB yield fell more than six basis points to a more than two week low below 3.58%.
Commodities
Silver suffered a sharp reversal during the Asian session, wiping out two days of gains. Heavy selling emerged in the Chinese futures market and on the CME after failing to break resistance at USD 90.50, the 38.2% retracement of the recent slump. Weaker Chinese demand ahead of Lunar New Year, combined with reports of a large short position by a Chinese investor, further soured sentiment. At the same time, the Shanghai spot premium over London slid to a three-week low. China’s only pure silver fund, which closed at a 60% premium to NAV last Thursday, remains limit down, leaving investors unable to exit and adding to the negative mood. Until market plumbing improves—through lower volatility and better liquidity—silver is likely to continue trading violently in both directions.
Gold failed to gain a foothold above USD 5,000, reversing lower as silver slumped, albeit at a much more moderate pace. Souring sentiment across risk assets—from equities to cryptocurrencies—offered some offsetting support. The XAUXAG ratio trades around 10% higher at 62.6, having rebounded sharply from a recent low near 43.3, highlighting renewed relative strength in gold versus silver.
Oil prices continue to gyrate, with US–Iran developments firmly in focus. Brent rallied back toward USD 70 on Wednesday before retreating after Iran confirmed it would hold negotiations with the US on Friday. OPEC production fell by 230 kb/d last month, according to a Bloomberg survey, with most members reporting lower output, led by declines in Venezuela and Libya.
Natural gas trades firmer following Monday’s 25% slump, as attention turns to today’s storage report. After the recent winter storm, inventories are expected to show a record weekly draw of around 379 bcf, compared with a five-year average of around 190 bcf.
Currencies
The US dollar rose broadly Wednesday and in Thursday’s Asian hours, with EURUSD pushing back below 1.1800 and eyeing the consolidation low of 1.1776, while GBPUSD sold off more steeply as sterling was broadly weak, hitting on the recent low water mark of its consolidation near 1.3623 in early European hours Thursday. AUDUSD fell back to 0.6970, erasing the gains to 0.7050 the previous day that were inspired by the RBA rate hike.
The JPY was weak Wednesday as nearly all JPY crosses rose sharply, but steadied in Thursday’s Asian session. USDJPY has steadied near 156.85 and EURJPY just below 185.00 after a 185.28 high on Wednesday.
