Market drivers and catalysts
Equities: Equities traded mixed, with flat U.S. and softer Europe and Asia as investors wait for the Fed and key China data
Volatility: VIX mid-teens, short-term vols jump into Fed, SPX 0DTE implies ±0.6%
Digital Assets: Options heavy put demand in IBIT/MSTR/miners, ETHA balanced and structured
Fixed Income: US Treasury yields at high end of recent range ahead of FOMC
Currencies: FX volatility extremely muted ahead of FOMC, JPY weak
Commodities: Silver trades above USD 60 as industrial demand fuels supply concerns
Macro events: Bank of Canada Rate Decision, FOMC rate decision
Macro headlines
SpaceX, the Elon Musk-led company, is said to be moving ahead with plans for an IPO in mid-to-late 2026 that would value the company at USD 1.5 trillion and raise more than USD 30 billion, making it the largest IPO ever.
France’s National Assembly approved next year’s social security bill by 247–234, boosting the odds of a year‑end budget and easing calls for Prime Minister Sebastien Lecornu to resign, with Lecornu saying the vote shows compromise is possible even as the main budget will be tougher and the government’s stance unchanged.
US job openings rose to a five‑month high of 7.67 million in October while layoffs climbed to 1.85 million, the highest since early 2023, and hiring fell by 218,000, with Stephen Stanley saying the labour market is slowing but not as sharply as some alternative indicators suggest.
Ahead of today’s widely expected hawkish rate cut from the FOMC, bond traders are betting on a shallower path of Federal Reserve interest-rate cuts in the year ahead, with just two 25 bps cuts expected during the first half. The change is part of a global move to wager that major central banks will slow or halt their monetary easing.
Macro calendar highlights (times in GMT)
0700 – Norway Nov CPI
1330 – US 3Q Employment Cost Index
1445 – Canada Bank of Canada Rate Decision
1530 – EIA's Weekly Crude and Fuel Stock Report
1900 – FOMC Rate Decision
Earnings this week
Today: Oracle, Adobe, Synopsis
Thu: Broadcom, Costco, Lululemon
For all macro, earnings, and dividend events check Saxo’s calendar.
Equities
USA: U.S. equities ended mixed, with the S&P 500 flat, the Nasdaq slightly higher and the Dow down 0.4% as traders weighed fresh labour data ahead of the Federal Reserve decision. Job openings rose to about 7.67 million in October, keeping the Fed’s data-dependent stance in focus while markets price a 25 basis point cut this week, and JPMorgan fell 4.7% after guiding 2026 expenses to roughly 105 billion, dragging peers. Nvidia eased 0.3% on talk China may curb H200 chip purchases despite U.S. export clearance with a surcharge, while Home Depot slipped 1.3% and Paramount, Netflix and Warner Bros Discovery moved on the evolving Hollywood deal saga, with investors now watching the Fed’s guidance on the 2026 rate path.
Europe: European equities edged lower, with the Euro Stoxx 50 down 0.1% and the Stoxx 600 near flat as investors stayed cautious ahead of Wednesday’s Federal Reserve decision, where a 25 bp cut is widely expected but the 2026 policy path remains unclear. EssilorLuxottica dropped 5.6% after Warby Parker unveiled glasses with built-in artificial intelligence (AI) features in partnership with Google, while Thyssenkrupp slid around 6.5% on guidance that pointed to a possible 800-million-euro loss in 2026. By contrast, defence stocks rallied after reports that German lawmakers will sign off on 29 procurement deals totalling about 52 billion euros next week, lifting Hensoldt, Rheinmetall, Leonardo, BAE Systems and Thales as markets focus on European rearmament and budget debates.
Asia: Asian trading was weaker, with Hong Kong’s Hang Seng index down 1.3% to around 25,434, a two-week low as losses spread across sectors ahead of the Federal Reserve decision and key Chinese inflation data. Talk of a “hawkish cut” and uncertainty around U.S. policy in 2026 kept investors cautious, while mainland shares eased before November consumer price index (CPI) and producer price index (PPI) releases even as the Politburo pledged stronger 2026 support through proactive fiscal and loose monetary policy. Tech and consumer names led declines, with Pop Mart off 5.4%, SMIC down 4.2% and Xiaomi, Meituan and China Resources Land losing about 3–4%, and the focus now shifts to how Beijing’s support plans feed through to earnings and sentiment.
Volatility
Equity volatility is edging higher into tonight’s Fed decision, but we are still in a mid-teens regime rather than full risk-off. VIX closed near 16.9 (+1.6%), with short-dated gauges like VIX1D jumping more sharply as traders pay up for very local protection. SPX finished around 6,840, down just 0.1%, yet 0DTE options price an intraday move of about ±43 points (≈0.6%), while FOMC-day straddles imply almost ±1% after the announcement, the largest expected Fed move since March.
Skew remains contained and VVIX is below 100, so demand is focused on near-the-money hedges rather than crash protection, with some strategists even advocating selling rich FOMC straddles given how small recent realized moves have been.
Digital Assets
Crypto markets are firm but not euphoric as traders also key in on the Fed. Bitcoin trades around 92–93k after bouncing from November’s sharp drawdown, with price action choppy but range-bound ahead of the “hawkish cut” many expect. Ether holds just above 3,300 and continues to slightly outperform, while majors like Solana, XRP and the miner complex (MSTR, MARA, RIOT, CLSK, CIFR) trade higher, helped by the prospect of easier policy and improving risk sentiment.
Options flow in crypto remains put-heavy, with sizeable long-dated protection in IBIT and MSTR as investors hedge equity-style proxies and miners, whereas ETHA shows a more balanced mix of calls and puts, pointing to structured upside rather than outright downside bets.
Fixed Income
US treasury yields trade near the highs of the recent range since September ahead of the FOMC meeting Wednesday, with the benchmark 2-year treasury yield near 3.61%, while the 10-year benchmark yield closed about a basis point higher near 4.19% on Tuesday before pulling back slightly overnight.
Japanese government bonds traded quietly and within recent ranges, save for at the front end of the yield curve, where the 2-year JGB benchmark yield poked to a marginal new high for the cycle above 1.08% before easing to within Tuesday’s trading range below 1.075%.
The German 10-year Bund yield rose to marginal new highs since March yesterday, nearly touching 2.88%, before easing back to 2.85% into the close.
Commodities
Silver surged to a fresh record above USD 60, supported by rate-cut expectations and after The Silver Institute said demand is set to expand across key technology sectors such as solar (PV), EVs and related infrastructure, as well as data centres and AI. The gold-silver ratio has slipped to a four-year low around 68.5, marginally below its 25-year average, underscoring silver’s strong relative performance.
Gold trades calmly around USD 4,200 ahead of today’s widely expected US rate cut. An uptrend from the October correction low offers support at USD 4,118 while resistance remains firm around USD 4,250.
Crude trades near recent lows amid ongoing concerns about global oversupply in the coming months. In its latest monthly update, the EIA said US production hit a record this year before slowing in 2026. Meanwhile, the API reported a 4.8 million barrel draw in crude stockpiles, partly offset by a sharp build in gasoline inventories. Brent remains stuck in a narrow four-dollar range, with downside attention focused on support around USD 62.
The BCOM Grains Index fell to a six-week low following the December WASDE report. Wheat came under pressure after the USDA raised world ending stocks for the 2025–26 season by slightly more than expected, while soybeans remain weighed down by the lack of Chinese buying. Corn, by contrast, edged higher on stronger export demand expectations.
Currencies
The dollar traded quietly ahead of today’s FOMC meeting, with the expectation that the Fed is likely delivering the last cut until after a new Fed Chair takes over next May, but with significant delays in US data meaning that odds might shift in coming weeks. EURUSD edged below the 1.1650, while USDJPY rose, mostly as a function of JPY weakness.
The Australian dollar remains firm after the recent hawkish RBA meeting and on rising Australian bond yields. AUDUSD, trading near 0.6650, is eyeing the huge overhead resistance level, the top of the range for 2025 at 0.6707, while AUDJPY rose above 104.00 for the first time since July of 2024.
