Market drivers and catalysts
Equities: US rotates into value after a US Federal Reserve cut; Europe climbs with cyclicals; Asia slips on SoftBank and China worries
Volatility: VIX mid-teens, light macro, fed speakers, ai capex sensitivity
Digital assets: Crypto's steady, ETF flows still show rotation rather than risk-on
Currencies: JPY weakens again, USD firms slightly
Commodities: Tumbling natgas add fuel to weekly divergence between weak energy and surging metals
Fixed Income: US treasury- and Japanese government bond yields bounce back
Macro events: Nothing of note today, Bank of England and ECB next Thursday, Bank of Japan next Friday
Macro headlines
US initial jobless claims rose by 44,000 to 236,000 in the week ending December 6, 2025, exceeding the 220,000 forecast and marking the largest weekly increase since March 2020. Continuing claims fell to 1,838,000, the lowest since April 2025, below the 1,950,000 forecast.
Swiss National Bank held its policy rate at 0%, maintaining a 0.25-point penalty on excess sight deposits, and remains ready to intervene in forex markets. Inflation dropped to 0.0% in November. The SNB projects inflation at 0.2% in 2025, 0.3% in 2026, and 0.6% in 2027 if the rate stays unchanged. Despite strong global Q3 growth, Swiss GDP fell due to reduced pharmaceutical exports. SNB expects GDP growth to be under 1.5% in 2025 and around 1% in 2026, with a modest rise in unemployment.
The US trade deficit decreased to $52.8 billion, the lowest since June 2020, from $59.3 billion in August. Exports increased 3% to $289.3 billion, led by nonmonetary gold and pharmaceuticals. Imports rose 0.6% to $342.1 billion, with growth in pharmaceuticals and nonmonetary gold. The largest deficits were with Ireland ($18.2 billion), Mexico, and the EU ($17.8 billion each), while the deficit with China narrowed to $11.4 billion.
Macro calendar highlights (times in GMT)
0700 – UK Oct Trade Balance
0700 – UK Oct. Manufacturing Production
1330 – Canada Oct. Building Permits
Fed speakers: Paulson (1300), Hammack (1330), and Goolsbee (1535)
Earnings events
Earnings next week:
Tuesday: Lennar
Wednesday: Micron, Jabil, General Mills
Thursday: Accenture, Nike, Cintas, Fedex, Heico, Darden Restaurants
Friday: Paychex
For all macro, earnings, and dividend events check Saxo’s calendar.
Equities
USA: Dow climbs 1.3% and the S&P 500 rises 0.2%, while the Nasdaq ends down 0.3% as investors rotate from tech into cyclicals after the US Federal Reserve (Fed) cuts rates by 0.25 percentage point. Visa leads the shift, up 6.1% after an upgrade, as rate-sensitive financial names catch a bid. Tech lags, with Oracle down 10.8% on weaker revenue and chipmakers broadly lower; after the close Broadcom slips about 4.5% in extended trading after flagging margin pressure from faster artificial intelligence (AI) sales, while Lululemon jumps 10.7% after hours on a higher full-year revenue outlook near $11 billion. Next up, markets watch whether the rotation holds once fresh inflation and growth data arrive.
Europe: Germany’s DAX rises 0.7% to 24,278 as the Fed’s rate cut lifts sentiment and investors favour industrial exposure over pricey growth stocks. Daimler Truck jumps 4.8% after a Bank of America ‘Buy’ call and a €1 billion cost-cut plan, while Brenntag gains 3.8% as cyclical winners lead the tape. Munich Re adds 2.2% after confirming its profit target, but E.ON drops 3.5% on regulation headlines as European tech slips modestly. Traders now look to upcoming European central bank communication and macro prints for confirmation that the move is more than a one-day relief rally.
Asia: Japan slides as the Nikkei 225 falls 0.9% to 50,149 and the Topix slips 0.9% to 3,357, led lower by SoftBank and talk of a Bank of Japan hike next week. SoftBank drops over 7%, with Oracle’s post-earnings slump adding to the risk-off tone. In Hong Kong, the Hang Seng dips 0.5% to 25,530 as Mexico sets new tariffs on Chinese exports from January 2026 and property-support hopes fade; SMIC falls 2.7%. China’s November credit data and Hong Kong’s jobs and industrial numbers are the next check on policy follow-through and demand.
Volatility
Volatility continued to drift lower into the end of the week, with VIX at 14.85 (down 5.83%) and short-dated measures falling more sharply (VIX1D 10.70, VIX9D 12.46), which points to a market that is less worried about an immediate shock. With the macro calendar relatively light, attention is likely to stay on Fed messaging (multiple speakers) and any renewed “AI confidence” headlines after Oracle’s results reminded investors that heavy capex needs credible payback.
SPX expected move for this week (options-implied): ~±33 points (0.48%). Skew (today’s expiry): upside skew, with calls priced richer than comparable puts around the 6900 area, suggesting investors are paying more for upside participation than for near-term crash protection.
Digital Assets
Crypto is steady but selective: bitcoin ~92.5k and ether ~3.25k are holding gains, while higher-beta names are doing more of the heavy lifting, with solana firmer and XRP slightly higher. ETF flows still show rotation rather than a broad “risk-on” wave: on 11 Dec, IBIT +$76.7m but the US bitcoin ETF complex -$77.5m overall, a reminder that investors are actively rebalancing exposure.
In ether ETFs, flows were softer, with total -$42.3m and ETHA flat, matching ETH’s more cautious tone. A notable structural tailwind for the broader “tokenisation” narrative is the SEC’s no-action letter allowing DTCC’s DTC to offer a tokenisation service for certain DTC-custodied assets, with rollout expected in 2H 2026.
Fixed Income
US treasuries sold off and the US treasury yield curve steepened slightly, nearly reaching its steepest level since early 2022 as the 2-year treasury benchmark yield rose off yesterday’s lows, trading near 3.53% this morning, while the 10-year benchmark rose more aggressively, some 6 basis points off the lows, trading near 4.16% early Friday in Europe.
Japanese government bonds sold off again after the modest rally the prior day, with the 2-year JGB benchmark yield rising back toward its cycle high, trading 1.075% late Friday in Tokyo, while the 10-year benchmark yield was likewise higher, up some two basis points o 1.954% as it eyes the high since 1999 just above the 2.00% level.
Commodities
The Bloomberg Commodity Index is heading for a weekly loss of around 1.5%, trimming its year-to-date gain to 16.1%. The week once again highlighted a sharp divergence across sectors: energy prices weakened notably, led by an 18% slump in natural gas—the worst tumble in nine months—and broader softness in crude and fuel products as concerns about a developing supply glut continue to weigh on sentiment. At the opposite end, metals delivered another dramatic performance.
Silver extended its record breaking run with an 8.7% gain (116% YTD); LME copper added 2.7% (+36% YTD) as it also hit fresh all-time highs, while gold resumed its push toward the October peak after consolidating around USD 4,200. The agriculture sector is on track for a modest loss, with renewed weakness in grains partly offset by strength across the softs and livestock markets. Meanwhile, cocoa, a returning member to the BCOM index next year, shows a 10.5% rise.
Currencies
The dollar rebounded from yesterday’s sell-off in places, with EURUSD dipping back to 1.1735 in Asia’s Friday session after a 1.1763 high yesterday, while the fresh rise in US treasury- and Japanese government bond yields applied fresh pressure on the JPY, and USDJPY rebounded to as high as 155.82 in early European hours Friday after the low yesterday just below 155.00.
- 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% due 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.
