Market drivers and catalysts
Equities: Wall Street rebounded, Europe stayed under oil pressure, while Asia bounced as crude cooled and nerves briefly steadied.
Volatility: Iran conflict driving markets, volatility elevated, downside hedging remains strong
Digital Assets: Crypto rebounds with risk sentiment, Bitcoin above $70k
Fixed Income: US treasury yields drop on lower oil prices, US high yield bonds still under pressure
Currencies: USD weakens, JPY firmer than EUR as risk sentiment rebounds on hopes global oil markets will normalize.
Commodities: Crude oil tumbles back below USD 100 but supply risks remain high; gold returns to challenge USD 5,200 resistance
Macro events: US Feb. Small Business Optimism, US Treasury to auction 3-year notes
Macro headlines
President Donald Trump said he would waive “certain oil-related sanctions to reduce prices” without offering any specifics while having the US Navy escort tankers through the Strait of Hormuz. Saying that the war with Iran would resolve “very soon” as he confronted mounting economic and political pressure and days of dramatic fluctuations in oil markets.
Japan’s Q4 2025 GDP was revised up to 1.3% annualised q/q as stronger corporate investment—upgraded to 1.3% q/q from 0.2%—lifted growth, while PM Sanae Takaichi urges further spending to develop key industries.
China’s export growth accelerated much faster than expected in the first two months of the year before the Middle East war broke out potentially triggering a global demand shock. Exports soared almost 22% from a year earlier, and with imports rising around 20% the surplus reached USD 214 billion – an all-time high for the period.
Macro calendar highlights (times in GMT)
0700 – Norway Feb. CPI
1000 – US Feb. NFIB Small Business Optimism
1215 – US Weekly ADP Employment Change for 4 weeks through Feb 21
1400 – US Feb. Existing Home Sales
1700 – US Treasury to auction 3-year Notes
Earnings this week
Today: Oracle, Volkswagen, Franco-Nevada, Chocoladefabriken Lindt & Spruengli,
Wednesday: Inditex, Rheinmetall, Porsche, Henkel
Thursday: Adobe, Wheaton Precious Metals, Assicurazioni Generali, BMW, RWE, Hannover Re, Dollar General, Ulta Beauty, Lennar
For all macro, earnings, and dividend events check Saxo’s calendar.
Equities
USA: The Dow rose 0.5%, the S&P 500 gained 0.8%, and the Nasdaq climbed 1.4% as Wall Street staged a late rebound after President Donald Trump said the Iran conflict looked close to ending, which helped pull oil sharply off its highs and eased some inflation fear. The move still had a defensive undertone, with banks and homebuilders lagging while investors kept one eye on higher energy costs and another on a softer U.S. jobs backdrop. Hewlett Packard Enterprise rose 3.2% after guiding second-quarter revenue above estimates and highlighting an AI backlog above $5 billion, while Hims & Hers jumped 40.8% after striking a new obesity-drug distribution deal with Novo Nordisk.
Europe: Europe remained the awkward part of the global picture. The STOXX 600 fell 0.6%, the FTSE 100 slipped 0.3%, and Germany’s DAX lost 0.8% as oil’s surge toward $120 fed fresh inflation worries, pushed bond yields higher, and revived talk that the European Central Bank may need to stay tighter for longer. That weighed on rate-sensitive and cyclical names: Schneider Electric fell 1.7%, and UniCredit lost 1.6%, while Roche slid 2.3% after a late-stage breast-cancer trial disappointed. Energy was the rare bright spot, which is helpful if you own energy and less helpful if you own almost anything else.
Asia: Asia bounced back on Tuesday after Monday’s heavy selloff, helped by Wall Street’s late reversal and a sharp drop in oil prices. Japan’s Nikkei 225 rose 2.9%, South Korea’s Kospi climbed 5.4%, Hong Kong’s Hang Seng gained 2.1%, and Australia’s ASX 200 added 1.1%, as investors took Trump’s comments as a sign the war might not spiral immediately, even if Iran’s response kept the mood fragile. In Seoul, Samsung Electronics rose 7.6% and SK Hynix jumped about 12.6% as chip names led the rebound, while in Hong Kong Tencent gained about 5.8% and Alibaba added about 1.4% as risk appetite returned and China’s export data offered some support.
Volatility
Volatility remains elevated even after Monday’s dramatic reversal from deep losses to a higher close. The main driver continues to be the war involving Israel, the US and Iran, and particularly the risk that disruptions in the Middle East could feed through into oil prices, inflation expectations and global growth. Oil prices have pulled back from Monday’s spike near $120 per barrel after comments from US President Donald Trump suggesting the conflict could eventually de-escalate, which has helped calm markets somewhat. Still, volatility indicators remain high, with the VIX closing Monday at 25.50, while short-term volatility measures such as VIX1D (22.68) and VIX9D (27.85) show investors are still preparing for potential sharp moves in the coming days.
Options pricing suggests markets expect continued swings this week. Based on current SPX options levels, the S&P 500 is pricing an expected move of roughly ±137 points (about 2.02%) into Friday, 13 March, while today’s expiry implies a move of around ±67 points (about 0.99%).
The options chain also shows a clear downside skew: around the 6800 strike, put implied volatility is roughly 36% compared with about 27% for calls, indicating investors are still paying more for downside protection than upside exposure. The SKEW index near 158 reinforces that message, signalling persistent demand for tail-risk hedging even as markets attempt to stabilise.
Digital Assets
Digital assets are trading higher this morning as risk sentiment improves across global markets. Bitcoin is holding above $70,000, while Ethereum trades around $2,050, with other major altcoins such as Solana (~$86) and XRP (~$1.38) also posting gains. The rebound follows a sharp drop earlier this week when oil surged and investors briefly moved away from risk assets. As oil prices retreated and equity markets stabilised, cryptocurrencies moved higher again, continuing to behave more like high-beta risk assets rather than traditional safe havens.
Among listed crypto investment products, IBIT is trading around $39.13 and ETHA near $15.37, both recovering alongside the underlying crypto market. Institutional interest in these vehicles continues to grow, highlighted by Cboe’s plan to launch the BITVX index, a volatility index based on options on the iShares Bitcoin Trust (IBIT), later this month. At the same time, recent options activity in crypto-linked equities suggests investors remain cautious in the short term, with notable downside hedging seen in names such as Coinbase and MicroStrategy. For now, the crypto rebound appears closely tied to broader macro sentiment: if energy markets stabilise and geopolitical risks ease further, digital assets could continue to recover, but renewed escalation in the Middle East would likely bring volatility back quickly.
Fixed Income
US Treasury yields rallied on the retreat from the spike high in oil prices and hopes that the Iran war will wind down soon. The benchmark 2-year treasury yield spiked as high as 3.63% Monday from a 3.56% close Friday on the nearly unprecedented volatility in oil markets and then retreated to close near 3.53% before rebounding to 3.56% in Asian trading hours on Tuesday. The benchmark 10-year treasury yield retreated from spike highs Monday above 4.20% to close just below 4.10% Monday before rebounding to 4.11% early Tuesday.
US high yield corporate bonds failed to find the kind of support seen in US treasuries Monday as the Bloomberg measure of the spread between high yield bond yields and US treasury yields widening another five basis points to 301 basis points, the highest level since November and nearing the range high since June of last year at 304 basis points.
Japan’s government bond yields saw little volatility with the yield curve flattening slightly as the benchmark 2-year JGB yield remained anchored near 1.25% while the benchmark 30-year JGB yield had retreated nearly four basis points in late Tokyo trading hours Tuesday to 3.43%.
Commodities
Oil prices underwent their biggest slump on Monday since the pandemic era, before steadying above USD 90. The move that started with talks about a coordinated SPR release accelerated following comments from Trump—facing political backlash at home and abroad and growing concerns over fuel affordability—who said the Iran war could end soon. He also indicated that oil-related sanctions, likely involving Russia, may be waived, while the U.S. Navy would escort tankers through the Strait of Hormuz. However, the conflict—which has directly affected more than a dozen countries—shows no clear signs of easing, with Iran so far unwilling to halt its counterattacks. For now, the crude market remains in flux. Ongoing disruptions to regional energy flows continue to underpin prices, leaving Brent exposed to another upside jolt above USD 100, while a credible move toward de-escalation could see prices retreat toward USD 80.
Gold advanced toward the upper end of its established USD 5,000 to 5,200 range, while silver trades close to USD 90 after touching USD 80 on Monday. For now, the precious metals sector has lost some of the intense recent attention and it may allow volatility to moderate, thereby improving trading conditions. The rebound has been supported by a softening dollar as crude prices tumbled. Current developments in the Middle East have, in our view, not derailed the underlying reasons why investors and central banks have been flocking to hard assets in recent years.
Currencies
The US dollar retreated as a function of calming global oil markets and bounce in risk sentiment on hopes that the war in Iran will end soon and oil and gas flows through the Persian/Arabian Gulf will resume quickly. EURUSD reached as high as 1.1646 after its 1.1507 low Monday before retreating below 1.1620 by late trading hours in Asia on Tuesday. The JPY was a bit firmer, with USDJPY near 157.70 early Tuesday after a high Monday of 158.90.
EM currencies like MXN and ZAR rebounded on the rebound in risk sentiment and retreat in oil prices from the nearly unprecedented spike Monday, while the Swiss franc retreated on easing safe haven demand after EURCHF had punched below 0.9000 intraday Monday, trading 0.9035 early Tuesday.
