Market drivers and catalysts
Equities: Equities face a reality check as Oracle-led AI jitters drag S&P futures lower, offsetting yesterday’s Fed-driven relief rally
Volatility: Implied volatility stays subdued, with VIX in the mid-teens even as index options show renewed demand for downside hedges.
Digital Assets: Bitcoin slips below 90k and options flow stays bearish in single names, while ETF activity turns more balanced into year-end.
Currencies: The USD weakened on the back of the FOMC guidance and lower US treasury yields
Commodities: Precious metals ease after FOMC-driven spike; crude steadies ahead of IEA/OPEC reports; EU gas sinks to 20-month low on mild weather
Fixed Income: US treasuries rallied on the FOMC decision and guidance.
Macro events: US weekly jobless claims, trade balance and 30-year bond auction
Macro headlines
The US Federal Reserve cut the Fed Funds rate by 25 bps to 3.5%–3.75% at its meeting on Wednesday, in a 9-3 vote, with two hawkish dissenters (Goolsbee and Schmid, who favoured no cut) and one dovish dissenter (Stephen Miran, who favoured a larger 50 bp cut). Members were split over whether inflation or the job market should be their bigger worry. In the end, the decision was made to protect against a sharper-than-anticipated slowdown in hiring. The Fed kept its rate projections steady, forecasting a 25bps cut in 2026, while revising GDP growth forecasts higher and slightly lowering PCE inflation estimates. Unemployment forecasts stayed at 4.5% for 2025 and 4.4% for 2026.
Fed Chair Powell suggested the possibility of additional cuts beyond the single one planned for next year. This led traders to increase the odds of two or more cuts in 2026 to about 68%. The statement indicated a potential pause to evaluate data, making the pace of cuts conditional on incoming data. Policymakers also raised growth expectations and slightly lowered inflation forecasts for 2025 and 2026.
The Bank of Canada kept the target rate at 2.25% in December 2025, seeing it as appropriate. GDP grew 2.6% in Q3, unemployment dropped to 6.5%, and CPI inflation slowed to 2.2%. Policymakers noted global uncertainty impacting GDP. They find the current rate suitable for maintaining 2% inflation but are prepared to adjust if needed.
The Swiss Government announced that 15% US tariffs on Swiss goods will be applied retroactively starting from November 14th.
- Australia saw an unexpected loss of 21,300 jobs in November, the largest monthly decline since February while the jobless rate held steady at 4.3%. Signs of a cooling labour market could force the RBA to hold rather than raise interest rates in the new year.
Macro calendar highlights (times in GMT)
0830 – Switzerland Rates Decision
0900 – IEA’s Monthly Oil Market Report
1330 – US Weekly Initial Jobless Claims
1330 – US Sept Trade Balance
1530 – EIA's Weekly Natural Gas Storage Change
1800 – U.S. to Sell USD 22 Billion of 30-year T-Bonds
During the day: OPEC’s Monthly Oil Market Report
Earnings this week
Today: Broadcom, Costco, Lululemon
For all macro, earnings, and dividend events check Saxo’s calendar.
Equities
USA: After yesterday’s Fed-driven bounce, S&P 500 futures now point to a drop of almost 1% as investors reassess the cut. The Dow Jones rose 1.1%, the S&P 500 gained 0.7% and the Nasdaq reversed early weakness to close 0.4% higher after the Federal Reserve cut rates by 25 basis points and signalled one more cut next year. The tone of Chair Powell’s press conference reassured markets that further hikes are very unlikely, and traders now see decent odds of two or more cuts in 2026. Industrials led the move, while Amazon climbed 1.7% on plans to invest 35 billion dollars in India and JPMorgan added 3.2%. In contrast, Microsoft fell 2.8% after outlining a 17.5 billion dollar India investment, and Oracle slumped more than 11% after hours as softer cloud revenue and heavy AI data-centre spending raised questions about debt-funded expansion. The latter helped change the mood in the market towards a more defensive stance with the S&P 500 trading down 0.9% ahead of the European session.
Europe: European equities slipped on Wednesday as investors stayed cautious ahead of the Fed decision, with the STOXX 50 down 0.2% and the STOXX 600 roughly flat. Risk appetite was limited, but there were sharp stock-specific moves. Aegon dropped close to 10% after confirming plans to shift its headquarters to the United States and rebrand as Transamerica, while Vinci and Rheinmetall also weighed on indices. On the positive side, Siemens Energy gained over 4% after upbeat guidance from US peer GE Vernova highlighted power grid demand, and Ocado jumped in double digits. Strength in HSBC, Novo Nordisk and Roche helped cushion the broader market as investors now look to upcoming European Central Bank and Bank of England meetings.
Asia: Asian markets were mixed, as investors reacted to the Fed backdrop and another weak inflation print from China. The Hang Seng fell about 0.5%, marking a third straight decline and a two-week low, pressured by earlier Wall Street nerves and ongoing worries about Chinese growth. Softer producer and consumer prices highlighted weak demand, although fresh fiscal support signals from the Politburo limited the downside. Mainland Chinese indices were under strain from property and industrial names, while selected financials and technology stocks offered some support in Hong Kong. Across the region, attention now shifts to how local central banks respond to the Fed’s move and whether incoming Chinese data can stabilise sentiment.
Volatility
SPX closed at 6,886.68 on Wednesday, up 0.67%, with futures modestly softer this morning. Short-dated options now price an intraday move of roughly ±36 points (±0.52%) based on the 0DTE strangle around the 6,890 strike, keeping the expected range tight. The VIX fell to about 15.8, with very short-term measures (VIX1D, VIX9D) dropping even more, signalling fading event anxiety after the Fed but still-elevated interest in hedging around data.
Index options flow stayed defensive. New SPX positions skewed to out-of-the-money puts that only pay off in a deeper pullback, while VIX options saw notable call buying into 2026, a classic bet on future volatility spikes rather than immediate stress. Mini-SPX (XSP) flows showed similar downside positioning in smaller size. Today’s SNB rate decision, US jobless claims and a 30-year Treasury auction, plus earnings from Broadcom, Costco and Lululemon, are the next catalysts traders will watch for any break from this low-volatility, “hedged but calm” regime.
Digital Assets
Bitcoin trades just above 90,000 USD, down 2–3% after briefly slipping below that level overnight, signalling ongoing decoupling from equities even after the Fed’s rate cut. Ether holds near 3,200 USD, with broader majors also softer. Spot ETF activity remains mixed: ETHA continues to attract steady inflows, while IBIT trades heavy volume but without clear directional flow, especially after Standard Chartered cut its 2025 BTC target to 100k.
Options positioning stays defensive. Roughly USD 279m in fresh premium went into downside puts across crypto equities, led by deep ITM structures in MSTR and notable protection in COIN, CLSK and CIFR. By contrast, ETF options in IBIT and ETHA remain more balanced between hedges and selective upside, suggesting investors favour single names for aggressive bearish expression while keeping ETFs flexible into year-end.
Fixed Income
US treasuries rallied on the FOMC decision, which was marginally more dovish than expected as the Fed cut despite improving growth forecasts and revising inflation forecasts lower for next year. The 2-year benchmark treasury yield trades at 3.53%, nine basis points lower this morning from yesterday’s high, while the benchmark 10-year yield likewise fell back, trading 4.20%, eight basis points lower from yesterday’s high.
Japanese government bonds rallied, taking the lead from the US treasury market reaction to the FOMC meeting. The 10-year JGB benchmark yield dropped back to 1.925%, down almost five basis points from the Wednesday highs.
German 10-year Bunds rallied after the yield posted a new multi-month high yesterday just shy of 2.90%, closing the day near 2.85%.
Commodities
Precious metals received a lift from the expected FOMC rate cut, which helped soften the dollar and Treasury yields. Silver briefly touched a new record near USD 63 before, like the broader metals complex, running into profit taking as risk sentiment weakened across equities. Gold meanwhile remains confined to a roughly USD 90 band around USD 4,200, a range that has held for two weeks as investors take stock after an exceptional year of gains. A rising trendline from August near USD 4,180 continues to offer support, though a break below may introduce short-term downside risk.
Crude trades near the lower end of its established range despite the US seizure of a sanctioned tanker off Venezuela, a move that could curb Venezuelan flows. Ahead of key monthly updates from the IEA and OPEC today, Trafigura—one of the world’s largest commodity traders—this week said it expects a wave of new supply to hit the market just as global demand shows signs of softening.
European gas prices dropped to a 20-month low of EUR 26.6/MWh (USD 9.13/MMBtu) —a year-over-year decline of 42%—as persistent mild weather continues to suppress heating demand and traders watch for any progress toward a Russia-Ukraine peace deal. The latest long-range seasonal forecasts point to above-normal temperatures through the start of next year.
Currencies
The dollar sold off on the relatively dovish read from the FOMC meeting as US treasury yields dropped sharply all along the curve. EURUSD managed to clear 1.1700 briefly on Thursday for the first time since mid-October before easing back, while USDJPY sold off as far as 155.49 before finding support, trading near 156.00 in late Tokyo hours Thursday.
The Australian dollar suddenly lost its footing on surprisingly employment data overnight, with weak full time payrolls and the unemployment rate only managing a steady reading at 4.3% du to a drop in the participation rate. After AUDUSD pulled higher on the post-FOMC USD weakness, hitting a high of 0.6679, it dropped back to 0.6635.
