Market drivers and catalysts
Equities: Tech-led selloff in the U.S., Europe softer with cyclicals lagging, Asia weaker with Hong Kong tech hit
Volatility: Data risk this week, Vol implied/realised gap remains wide, higher skew
Digital Assets: Bitcoin flows weak, Ethereum under pressure, Alt-coins follow broader trend
Currencies: US dollar and Japanese yen strength eased overnight, Sterling slumped on Chancellor Reeves' ambiguous pre-budget briefing
Commodities: Gold rebounds ahead of ADP, US stockpile jump weighing on crude
Fixed Income: Modest rally in US treasuries, given weak risk sentiment in risky assets. High yield corporate bond spreads widened sharply
Macro events: US Oct ADP Employment Change & US Treasury Quarterly Refunding Announcement
Macro headlines
The White House stated it currently has no interest in selling NVIDIA (NVDA) Blackwell chips to China.
The RealClearMarkets/TIPP Economic Optimism Index fell 9.1% to 43.9 in November 2025, missing expectations and hitting its lowest point since June 2024. This marks the third month below the neutral 50 mark. Investor confidence dropped 3.1% to 58.6, while non-investor sentiment fell 10.4% to 38.0, widening the gap to 20.6 points. Economic, personal financial, and federal policy outlooks all weakened, and the Financial-Related Stress Index rose 3% to 65.2, indicating high financial strain. Persistent inflation, high food prices, tariff worries, and cautious monetary policy are key issues affecting sentiment.
The US trade deficit widened to $78.3 billion in July 2025, it's largest in four months as the deficit “normalizes” in the wake of tariff impacts, exceeding the expected $75.7 billion and June's $59.1 billion. Exports edged up 0.3% to $280.5 billion, with increases in nonmonetary gold and civilian aircraft, while imports rose 5.9% to $358.8 billion, led by nonmonetary gold and telecom equipment. Major deficits were with Mexico ($16.6 billion), Vietnam ($16.1 billion), China ($14.7 billion), and Taiwan ($13.5 billion). Deficits with the EU, India, and Canada were $8.6 billion, $5.5 billion, and $5.4 billion, respectively.
The US Logistics Manager’s Index (LMI) held steady at 57.4 in October 2025, reflecting continued sector growth. Inventory levels fell (-5.6 to 49.5) and warehousing utilization slowed (-8.8 to 56.5), likely reflecting the start of holiday sales, reducing warehousing tightness and increasing transportation activity.
Zohran Mamdani, a democratic socialist, won the New York mayor election on a promise to tackle New York City’s affordability crisis. The election attracted the highest level of voter interest since 1969. Democrats registered their biggest political victories since their loss to Donald Trump a year ago with a series of wins besides New York in Virginia, New Jersey, and California.
Macro calendar highlights (times in GMT)
US Government data are impacted by shutdowns and are likely to be delayed
0700 – Germany Sept Factory Orders
0745 – France Sept Industrial Production
0830 – Sweden’s Riksbank Rate Decision
1315 – US Oct ADP Employment Change
1330 – US Treasury Quarterly Refunding Announcement
1500 – US Oct. ISM Services
1530 – EIA's Weekly Crude and Fuel Stock Report
Earnings events
Today: 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 fell 1.2%, the Nasdaq Composite dropped 2.0%, and the Dow slid 0.5% as valuation warnings and AI fatigue hit megacap tech. Palantir sank 7.9% despite raising full-year revenue guidance to about $4.4bn, as investors questioned lofty multiples. Nvidia fell 4.0% alongside chips, while AMD lost 3.7% into earnings; after the bell it guided Q4 revenue to $9.6bn and said AI revenue could reach “tens of billions” by 2027, with shares easing in extended trade. Defensive tone showed up in Berkshire Hathaway, up 2.7%, while Coca-Cola rose 1.0%. Focus turns to AMD’s call and further U.S.–China chip headlines.
Europe: Euro Stoxx 50 fell 0.3% to 5,660 and Stoxx 600 slipped 0.3% to 570.6 as tech and resources dragged; the FTSE 100 edged up 0.1%, outperforming peers. ASML eased 0.9% on chip-spending jitters, while Nokia dropped 3.3% after a weak tape for telecoms. Associated British Foods fell 3% after results and talk of a potential Primark separation. Ferrari rose 3.2% after beating Q3 expectations and holding guidance, aided by pricing power. Earnings momentum at large caps remains the swing factor as guidance updates land.
Asia: Risk-off persisted across the region. Nikkei 225 fell 1.8% as tech weakness outweighed yen support, Hang Seng lost 0.8% to 25,952 with the Hang Seng Tech Index down 1.8%, and CSI 300 slipped 0.8%. Hong Kong tech softened after the White House confirmed Nvidia’s top Blackwell chips won’t be sold to China; Alibaba fell 2.6% and Xiaomi 2.7%. Property stress stayed in focus as New World launched a US$1.9bn debt swap and Vanke faced tighter rescue-loan terms. Attention shifts to policy follow-through and whether chip export rules tighten further.
Volatility
Equity volatility is creeping higher but hasn’t yet blown out - the S&P 500-implied volatility gauge (VIX) is around 19.00, up from the mid-teens in recent sessions.
There are a few things to keep in mind: major data this week such as the ADP employment print, the ISM services PMI and Friday’s non-farm payrolls could trigger a sharp move. Also, the implied-versus-realised volatility spread remains wide, hinting that investors are paying up for protection even though realised moves have been modest.
In this environment options imply roughly ±0.7 % on the S&P 500 for today and about ±1.2 % into the end of the week, which means about ±46 points today and ±82 points into Friday (based on current contracts). There’s a modest “put skew” evident - out-of-the-money puts cost more than comparable calls, indicating that many are hedging for downside risk.
All told: things look orderly for now, but the setup is sensitive - with data or policy surprises, volatility could ramp quickly.
Digital Assets
The crypto-complex remains under pressure. Bitcoin is hovering just above the US $100 k mark, but flows into spot-bitcoin ETFs and large-holder holdings appear to be weakening, signalling that the structural support may be under strain. Meanwhile, Ethereum and its related ETF (e.g., ETHA) are showing even more signs of stress with sizeable relative outflows. Beyond those two, broader alt-coins such as Solana, XRP and Cardano are tracking the down-draft: some loss of speculative momentum is visible.
For investors that means we’re in a “wait and see” phase: if bitcoin/ethereum stabilise and flows improve, the risk-on lever might return; if not, the tape could drift lower, especially around macro risks (dollar strength, rate hikes, regulatory headlines).
- Keep an eye in particular on large institutional flows in products like IBIT — any shift there will likely ripple through the crypto space.
Fixed Income
Treasury futures ended modestly higher on Tuesday supported by a US equity slump, as executives warned of a pullback and crude fell 0.8%; ranges were narrow and SOFR options saw demand for upside hedges on increased Fed easing expectations.
High yield corporate debt came under pressure yesterday amidst widespread risk aversion, with the Bloomberg index we track of high yield spreads to US treasuries widening 10 basis points to 296 basis points, which is just eight basis points shy of the October high of 304 basis points – which in turn was the widest level since June.
Commodities
Gold rebounded in Asia after once again finding support near USD 3,930, following its biggest one-day drop in a week as the dollar climbed to a multi-month high and traders reassessed the Fed’s rate outlook. The ongoing consolidation phase continues to be shaped by the dollar’s longest winning streak since July, which has pressured dollar-priced commodities. However, a weaker risk appetite stemming from AI valuation concerns may lend gold some short-term support ahead of today’s US ADP employment data.
Copper extended its retreat from last week’s record high, dropping 1.8% as the stronger dollar made metals more expensive for non-US buyers. Supply concerns were tempered after Codelco said its output this year and next will exceed 2024 levels.
Oil declined for a second consecutive session on Tuesday after API data indicated the largest US crude inventory build in more than three months, with stockpiles rising by 6.5 million barrels last week. If confirmed by the EIA later today, it would mark the biggest gain since late July. Market attention also remains on escalating attacks against Russian energy infrastructure, with seaborne exports in October falling to the lowest since January 2024.
Currencies
The Dollar Index rose above 100 for the first time since May, driven by risk-off sentiment in US equities and global liquidity concerns. Amid a 35-day US government shutdown, today’s ADP jobs data is expected to show a 30k rise in October following a 32k drop in September.
AUD rose to a 12-year high versus the NZD, with AUDNZD above 1.1500 briefly before pulling back. The rally in there has been driven by differing monetary policies. The RBNZ cut rates amid rising unemployment, while the RBA held steady this week, buoyed by strong commodity prices.
GBP lost ground following Chancellor Reeves' ambiguous pre-budget briefing, pushing GBPUSD nearly all the way to 1.3000 before support was found, its lowest since April. Sterling also fell to a new low versus the Euro, with EURGBP closing at its highest level yesterday since early 2023 at 0.8818.
JPY outperformed amid safe-haven demand yesterday and potential FX intervention talk, pushing USDJPY to 152.96 lows, although the JPY strength faded overnight, with USDJPY bouncing to 153.70 in early European hours today.
