Market drivers and catalysts
Equities: U.S. rose on firmer services, Europe edged higher on autos and wind, Asia firm with Japan and Korea up
Volatility: VIX softens, light put skew, data and BoE in focus
Digital Assets: BTC/ETH steady, IBIT & ETHA outflows, Solana ETF inflows, selective rebound in crypto equities
Fixed Income: US Treasury yields rose sharply, with 10-year benchmark challenging 1-month highs.
Currencies: US dollar weakens as risk sentiment sees broad recovery, GBP steady ahead of Bank of England rate decision
Commodities: Gold holds near USD 4,000, oil stays under supply pressure, and the CBOT wheat rally extends
Macro events: UK and Norway Rates Decision. US Weekly Jobless Claims
Macro headlines
The US Supreme Court appeared skeptical of Donald Trump’s tariffs, with some justices suggesting he had overstepped his authority. Even if they are struck down, the president has other legal avenues to pursue, leaving companies and countries in limbo. A ruling against the current measures might trigger refunds of past duties, but new tariffs could quickly follow, keeping the outlook unsettled.
US private businesses added 42K jobs, rebounding from September's 29K job cuts and surpassing the 25K forecast. The service sector gained 33K jobs, mostly in trade/transportation/utilities (47K), education/health services (26K), and financial activities (11K), while losses continued in professional/business services (-15K), information (-17K), and leisure/hospitality (-6K). The goods sector added 9K jobs, though manufacturing shed 3K jobs. Annual pay growth was flat at 4.5% for job-stayers and 6.7% for job-changers, indicating balanced supply and demand.
The ISM Services PMI rose to 52.4 in October 2025 from 50 in September, beating forecasts. This marks the strongest sector growth since February, with business activity (54.3) and new orders (56.2) improving. Employment contraction (48.2) signals economic uncertainty, while the federal shutdown impacts business activity. The order backlog fell (40.8), as companies manage orders well. Price pressures increased (70) due to tariffs.
US household debt reached a record $18.59 trillion in Q3 2025, up $197 billion. Mortgages increased by $137 billion, credit card debt by $24 billion, HELOC by $11 billion, and student loans by $15 billion, while auto loans stayed at $1.66 trillion. Mortgage originations hit $512 billion. Donghoon Lee from the New York Fed noted moderate debt growth and stable delinquencies, reflecting housing market resilience.
Nvidia’s Jensen Huang says China “Will win” AI race with the US due to lower energy costs and looser regulations, saying the west, including the US and UK, is being held back by “cynicism” (FT)
Bloomberg reports that a major trade union in Japan representing 1.9 million workers will push for a 6% rise in wages ahead of next year’s round of wage negotiations.
Macro calendar highlights (times in GMT)
US Government data are impacted by shutdowns and are likely to be delayed
0700 – Germany Sept Industrial Production
0830 – Germany Oct HCOB Construction PMI
0900 – Norway Rate Decision
1000 – Eurozone Sept Retail Sales
1200 – BOE Rate Decision
1330 – US Weekly Jobless Claims
1530 – EIA's Weekly Natural Gas Storage Change
Fed Speakers: Barr (1600), Williams (1700), and Hammack (1700)
Earnings this week
Today: AstraZeneca, ConocoPhillips, Parker-Hannifin, Rheinmetall, AirBnB, Monster Beverage, Vistra, Datadog, Warner Brothers Discovery
Fri: Constellation Energy, KKR, Enbridge, Duke Energy, Mitsubishi Heavy Industries, Honda Motor
For all macro, earnings, and dividend events check Saxo’s calendar.
Equities
USA: Stocks rose as tariff anxiety cooled after Supreme Court skepticism and services activity hit an eight-month high. The S&P 500 +0.4%, Nasdaq +0.7%, Dow +0.5%. Alphabet +2.4% and Tesla +4.0% paced megacaps, while Amgen jumped 7.8% on a clean beat and outlook lift. Super Micro Computer fell 11.3% after disappointing results, tempering the chip rebound. Solid ADP hiring (+42k) and a stronger ISM services print supported risk, while the tariff case remains a watch item into the Court’s decision and next inflation data.
Europe: The STOXX 600 added 0.2% to 571.9 and the Euro Stoxx 50 rose 0.2% as autos and energy offset softer tech. BMW rallied 6.9% after stronger Q3 margins, lifting Mercedes-Benz, Renault and Volkswagen. Vestas surged 14.8% on a profit beat and a new buyback, while Novo Nordisk fell 4.5% after trimming its outlook amid U.S. pricing headlines. FTSE 100 closed up 0.6% at a fresh record as defensives underpinned the tape.
Asia: Tone improved into local closes. Nikkei 225 rose 1.5% as a steadier tech tape and softer yen helped sentiment; Korea’s Kospi gained 1.2% with semis retracing part of Tuesday’s slide. By contrast, Hong Kong’s prior session finished −0.1% at 25,935 with tech and property weak ahead of China data, even as later headlines pointed to tariff suspensions and growth guidance. Focus stays on chip cyclicals and Chinese services momentum into upcoming prints.
Volatility
Volatility eased further on Wednesday as traders looked past Tuesday’s wobble and refocused on data and earnings. The VIX fell to 18.01 (–5.2%), while ultra-short-term gauges like VIX1D (–14%) and VIX9D (–11%) show nerves receding ahead of today’s BoE rate decision and US labour data. The tone is cautious but constructive—investors appear more focused on fundamentals again after the brief speculative shakeout that hit AI and crypto names earlier in the week.
SPX expected move (this week): roughly ±37 points (~0.55%) into today’s expiry, based on front-week options pricing. Skew (06-Nov expiry): mild put skew, with 6,800–6,820 strikes trading 1–2 volatility points above calls—reflecting modest demand for downside protection, not panic hedging.
Earnings from Airbnb, Monster Beverage, and Rheinmetall could still add intraday swings, while macro focus shifts to US productivity data and the Bank of England’s rate announcement. Broader volatility sentiment remains steady, suggesting investors see recent selloffs as corrections, not the start of a deeper unwind.
Digital Assets
Crypto markets steadied overnight as Bitcoin held near $103.4k and Ether around $3.39k, with both recovering slightly after dipping below key levels earlier this week. Still, caution prevails: IBIT and ETHA ETFs have now logged five consecutive days of outflows, signalling persistent institutional hesitancy.
Yet pockets of optimism remain. Solana continues to attract capital, marking its sixth straight day of inflows into Solana-based ETFs—a bright spot amid broader crypto weakness. On the equities side, Coinbase, MicroStrategy, and Cipher Mining all rallied, tracking crypto’s rebound. Analysts from Galaxy trimmed their 2025 Bitcoin target to $120k, citing slower institutional momentum, but maintained a long-term bullish stance.
Fixed Income
Treasury yields jumped on heavy selling of US treasuries, with the benchmark 2-year yield jumping over five basis points to its highest daily close in over a month near 3.63% before falling back. Likewise, the 10-year benchmark jumped to a new local high near 4.15% before the market steadied.
China sold 4 billion USD-denominated bonds, half of them 3-year bonds that priced at the same yield as their US Treasury counterparts, while the other half of 5-year bonds only had a yield premium of two basis points to benchmark US treasuries.
- High yield corporate debt yields steadied amidst the strong risk sentiment recovery yesterday, with the Bloomberg index we track of high yield spreads to US treasuries tightening 9 basis points to 287 basis points.
Commodities
Oil steadied after a two-day slide as the EIA confirmed the largest US crude stock build since July, leaving WTI below USD 60 and Brent under USD 64. Sentiment remains challenged by persistent oversupply concerns, echoed by several industry insiders at the ADIPEC conference in Abu Dhabi, and after Saudi Arabia cut its December selling price to Asia to an 11-month low.
Gold trades near USD 4,000 following its strongest rebound in around a week, while silver has recovered above USD 48. A jump in Treasury yields (see above) has been offset by a softer dollar, and the stronger-than-expected ADP report was balanced enough to imply cooling labour demand without pointing to a sharper downturn.
CBOT wheat is holding near a four-month high above USD 5.50 after a strong rebound from multi-year support below USD 5. The broader grains recovery following China’s suspension of retaliatory tariffs is now being reinforced by signs of actual purchases—not only of soybeans but, more recently, wheat. With the CBOT contract having been one of the most heavily shorted by speculators for months, the key question is what comes after the current short-covering phase.
Currencies
The Dollar Index eased back lower as risk sentiment improved yesterday, but still trades just barely above the key 100 level, this morning at 100.04 as EURUSD bounced back above 1.1500 after yesterday’s 1.1469 low.
GBP is steady ahead of today’s important Bank of England meeting, with a minority looking for a rate cut today and only a slightly larger minority looking for a rate cut in December (about 36% probability of a cut at that meeting priced)
JPY weakened broadly on the surge in US treasury yields and recovery in risk sentiment. USDJPY traded near 154.00 this morning after a 154.14 high overnight.
