Market drivers and catalysts
Equities: US records and chips led, Europe softened on geopolitics, Asia stayed mixed as Korea’s AI rally kept drawing flows.
Volatility: VIX contained, oil and Iran tensions rise, CPI and retail sales ahead
Digital Assets: Bitcoin above USD 80k, crypto equities attract bullish call flow
Currencies: US dollar, NOK firm on latest surge in crude oil prices
Commodities: Oil rebounds, gold weakens on Trump’s Iran rebuff; hedge fund rush into agriculture continues
Fixed Income: Global yields rebound on latest surge in crude oil prices
Macro: US Apr. Existing Home Sales, US Treasury to auction 3-year notes
Macro headlines
US President Trump rejected Iran’s latest response to his proposal to end the 10-week conflict as “totally unacceptable”, prolonging the effective closure of the Strait of Hormuz.
The US added 115K jobs in April 2026, beating forecasts but down from a revised 185K in March, with gains in health care, transport/warehousing, and retail partly offset by losses in information, federal government, and manufacturing. Revisions left February–March employment 16K lower, pointing to a cooling but still resilient labor market.
China’s exports rose 14.1% y/y to a record USD 359.4bn in April 2026, far above forecasts, as firms stockpiled components amid Iran-war cost fears. US shipments rebounded 11.3% despite tariffs, while Jan–Apr exports climbed 14.5% to USD 1.34tn, with sales to the US down 10.2%. Trump-Xi meeting will happen this week 14-15 May.
The Michigan Consumer Sentiment Index hit a record low of 48.2 in early May 2026, below April and forecasts, as current conditions slumped on price concerns. About one-third of consumers cited gas prices and 30% tariffs.
US year-ahead inflation expectations eased to 4.5% in May 2026 from 4.7% in April, while the five-year outlook dipped to 3.4% from 3.5%, preliminary May University of Michigan survey data showed.
Canada lost 18,000 jobs in April 2026, missing expectations for a 15,000 gain. Full-time employment fell by 47,000 while part-time rose by 29,000; the employment rate edged down to 60.5%, with youth and core-aged male unemployment up and Ontario adding 42,000 jobs.
China's factory prices grew at the fastest pace since the pandemic as the Iran war raises costs and leaves profits under pressure, with producer prices rising 2.8% in April from a year earlier. Consumer inflation unexpectedly climbed to 1.2% from a year earlier, driven by higher motor fuel and gold prices, despite food prices slumping.
Macro calendar highlights (times in GMT)
- 0600 – Norway Apr. CPI
- 1400 – US Apr. Existing Home Sales
- 1700 – US Treasury to auction 3-year notes
- 0130 – Australia Apr. NAB Business survey
Earnings events
Monday (today): Petrobras, Constellation Energy, AST SpaceMobile
Tuesday: Siemens Energy, KBC Group, Bayer, Constellation Software
Wednesday: Cisco Systems, Siemens, Softbank Group, Deutsche Telekom, Merck, E.ON, RWE, Nebius Group
Thursday: Applied Materials, Ross Stores, Nu Holdings
For all macro, earnings, and dividend events check Saxo’s calendar.
Equities
USA: The S&P 500 rose 0.8% to 7,398.93 on Friday, while the Nasdaq Composite gained 1.7% to 26,247.08 and the Dow was almost flat at 49,609.16, as stronger jobs data and another AI-chip surge pushed both the S&P 500 and Nasdaq to records. Semiconductors drove the tone, with Micron up about 15.5% on AI memory demand, AMD up more than 11% on renewed data-centre optimism, and Intel up strongly after reports of a potential Apple foundry deal. Monster Beverage surged 13.6% after better-than-expected results. Markets now watch whether Monday’s Iran headlines cool the record mood.
Europe: The Stoxx Europe 600 fell 0.7% to 612.14 on Friday, while the DAX dropped 1.3%, the CAC 40 lost 1.1% and the FTSE 100 declined 0.4%, as renewed US-Iran tensions and tariff noise hit risk appetite. Financials and industrials dragged, with Commerzbank down 3.9% after announcing up to 3,000 job cuts and higher targets as it pushed back against UniCredit’s takeover approach. IAG fell 2.8% after warning on annual profit due to higher fuel costs, while Amadeus gained 1.9% after strong earnings. Investors now watch oil, tariffs and whether earnings can keep doing the heavy lifting.
Asia: Asian markets ended mixed on Friday before Monday’s cautious open. Japan’s Nikkei 225 slipped 0.2% to 62,713.65 after profit-taking, while Hong Kong’s Hang Seng fell 0.9% to 26,393.71 and Singapore’s Straits Times Index lost 0.4% to 4,921.90. South Korea remained the standout story, with the Kospi up more than 13% over the week as Samsung Electronics and SK Hynix continued to anchor the global AI memory trade. Hongkong Land gave back 5.2% on Friday after leading gains the day before, while Venture Corp had jumped 10.9% on May 7. Korea is now the market everyone watches, because subtle it is not.
Volatility
Volatility remains relatively contained despite a market backdrop that is becoming more complex. The VIX closed at 17.19 on Friday while the S&P 500 and Nasdaq pushed to fresh record highs, supported by resilient US payrolls data, strong AI-related earnings momentum and continued buying in semiconductor stocks. At the same time, investors are becoming more cautious around the inflation outlook after President Trump rejected Iran’s latest peace proposal, sending Brent crude back above USD 105 and renewing concerns about energy-driven price pressures. This week’s focus now shifts toward US CPI, PPI and retail sales data, alongside the Trump-Xi meeting and several important bond auctions, all of which could influence rate expectations and market sentiment.
Options markets suggest investors still expect relatively orderly conditions overall, but with downside hedging quietly building underneath the surface. Based on SPX options pricing, the market is implying an expected move of roughly 97 points, or around 1.31%, into the 15 May weekly expiry. For today’s expiry, the implied move is around 38 points or 0.51%. The daily skew indicator continues to show a modest defensive bias, with implied volatility in near-the-money puts around the 7,400 strike remaining above equivalent calls. However, strong call open interest and continued upside flow in mega-cap technology stocks suggest investors are still participating in the rally rather than positioning for an outright reversal.
Friday’s options flow reinforced that mixed-but-constructive picture. Confirmed opening flow remained heavily concentrated in upside call positioning across semiconductors and AI-linked names, including AMD, MCHP and SOXX, while Mag7 activity showed continued bullish participation in AAPL, AMZN, TSLA and NVDA. At the same time, investors continued to buy SPX, SPY and QQQ downside protection, indicating that institutional money remains involved in the rally but is not abandoning hedges completely.
Digital Assets
Digital assets started the week on a relatively firm footing, with Bitcoin trading around USD 80,800 and briefly pushing back above USD 82,000 after renewed geopolitical tensions triggered another wave of short covering. Markets reacted sharply after President Trump rejected Iran’s latest peace proposal, extending uncertainty around the Strait of Hormuz and oil markets. Despite that geopolitical backdrop, crypto sentiment remains supported by institutional adoption trends, improving US regulatory momentum and continued interest in crypto-linked equities.
US spot ETF flows remain mixed beneath the surface. Bitcoin ETFs saw net outflows on Friday, including modest selling in IBIT, while Ethereum ETF flows were broadly flat and ETHA finished slightly higher.
Crypto-linked equities, however, continued to attract aggressive upside positioning in the options market, particularly in MSTR, COIN, MARA, IREN and CRCL, suggesting investors are still willing to position for another leg higher in the sector. Among major altcoins, Ethereum held near USD 2,334, Solana traded around USD 95.75, XRP near USD 1.45, while Dogecoin slightly lagged broader crypto performance. Investors will also continue monitoring progress around the US Senate’s proposed CLARITY Act, which could become an important medium-term catalyst for institutional participation across digital assets.
Commodities
Oil prices climbed after U.S. President Donald Trump rejected Iran’s latest response to his proposal to end the 10-week conflict as “totally unacceptable.” The two sides continue to maintain a fragile ceasefire while the effective closure of the Strait of Hormuz drags on. After briefly trading down to USD 96 last week on renewed hopes the strait would reopen, Brent has rebounded above USD 105. Morgan Stanley has described the situation as a “race against time,” warning that recent mitigating factors - such as a surge in U.S. exports (+3.8 mb/d YoY over the past 30 days) and weaker Chinese imports (-5.5 mb/d) - cannot persist indefinitely. That increasingly leaves demand destruction through slower consumption growth and higher prices as the only viable mechanisms to rebalance the market.
All three of the major oil forecasting agencies will publish their monthly market outlooks during the week, starting with EIA on Tuesday, followed by OPEC and IEA on Wednesday.
- Gold trades lower after Donald Trump rejected Iran’s latest proposal, lifting both the dollar and U.S. bond yields. Additional pressure came after India’s Prime Minister Narendra Modi urged Indians - the world’s second-largest bullion consumers - to avoid buying gold for at least a year to preserve foreign-exchange reserves as the Middle East war and energy shortages widen India’s trade deficit and weigh on the rupee. Overall, gold remains rangebound, with support established ahead of USD 4,500, while resistance is seen at the 50-day moving average, currently near USD 4,768.
The latest COT report covering the week to 5 May showed continued hedge funds rotation into a rising agricultural sector led by corn, soybeans, sugar, cotton, and cattle. Continued strength in the U.S. beef market lifted the live cattle net long to a 13-month high, and valued at USD 14.4 billion, making it the third-largest hedge fund long after gold and Brent crude. Led by corn and the soybeans complex, the combined crop long surged to a record high since data began in 2006, while CBOT wheat, by contrast, flipped back to a net short as elevated contango continued to favor bearish carry trades.
Fixed Income
US treasury yields rebounded after Friday’s dip, as a fresh surge in crude oil prices on the lack of a US-Iran deal at the weekend weighed. After dipping a few basis points Friday in the wake of the US jobs report, treasury yields rebounded early Monday to levels slightly above where they closed last Thursday, with the benchmark 2-year treasury yield trading near 3.92% and the benchmark 10-year treasury yield just above 4.39%
Japan’s government bond yield curve steepened Monday on the latest surge in crude oil prices as the world still awaits the opening of the Hormuz strait. Yields at the front end of the curve remain little changed, while longer dated JGB’s came under pressure. The benchmark 10-year JGB yield rose just under three basis points to 2.51%, while the benchmark 30-year JGB yield rose a similar amount to above 3.76%, its highest daily close since late March.
Currencies
The US dollar firmed on the latest surge in crude oil prices on the lack of progress in US-Iran negotiations related to opening the Hormuz Strait for shipping. The US remains seen as less impacted by ongoing disruptions to global energy supplies through the strait. USDJPY rose above 157.00 Monday after closing Friday at 156.68, while EURUSD dropped back to just above 1.1750 after closing Friday at 1.1787.
The surprise Norges Bank rate hike last Thursday and the latest surge in crude oil prices has NOK rallying again, with EURNOK pushing back toward cycle lows that nearly reached 10.80 last week, while NOKSEK rallied to a new high since mid-2024 Monday, clear of 1.0050.
