Market drivers and catalysts
Equities: U.S. stocks stayed flat on jobs data, Europe hit a record as energy beat tech, Asia edged higher on China support.
Volatility: VIX contained, macro data and auction in focus, mild upside skew
Digital Assets: Macro-sensitive consolidation, ETF outflows
Fixed Income: US treasury yields rise on strong US jobs report. Long Japanese bonds in heavy demand as JGB yield curve flattens.
Currencies: Japanese yen strengthens again, but then consolidates. USD mixed after strengthening post US jobs report.
Commodities: Sugar slumps on weight-loss demand shock; gold and crude track macro and geopolitics
Macro events: US Weekly Jobless Claims, US Treasury to auction 30-year T-bonds
Macro headlines
US added 130K payrolls in January 2026, far exceeding December's revised 48K and the 70K forecast. Health care added 82K jobs, social assistance 42K, and construction 33K. Manufacturing grew by 5K jobs. Federal jobs fell by 34K and financial activities by 22K. Other sectors showed little change. BLS revisions reduced nonfarm payrolls by 862k as of March 2025, exceeding the 825k expected but less than the initial 911k. This indicates a weaker labor market and raises doubts about January's job growth sustainability.
China's annual inflation fell to 0.2% in January 2026 from 0.8% in December, below the 0.4% forecast. Food prices dropped 0.7%, non-food inflation slowed to 0.4%, and core inflation rose 0.8%, the weakest in six months. Monthly CPI held at 0.2%, under the 0.3% expectation.
US January private nonfarm payrolls saw average hourly earnings rise by 15 cents (0.4%) to $37.17, exceeding the 0.3% forecast. Production and nonsupervisory employees' earnings grew by 12 cents (0.4%) to $31.95. Annually, earnings increased by 3.7%, surpassing the 3.6% forecast.
Japan’s producer prices rose 2.3% year-on-year, the slowest since May 2024, easing from 2.4% in December and matching expectations. Costs moderated in several sectors, while prices for chemicals and metals remained weak. Monthly inflation edged up to 0.2%.
Trump is mulling an exit from the North American trade pact, raising uncertainty during US, Canada, and Mexico talks. He asked aides about withdrawing but hasn't confirmed any plans; a White House official calls the speculation baseless.
Macro calendar highlights (times in GMT)
0700 – UK 4Q GDP
0700 – UK Dec. Manufacturing Production
0700 – UK Dec. Visible Trade Balance
0900 – IEAs monthly Oil Market Report
1330 – US Initially Weekly Jobless Claims and Continuing Claims
1330 – US January Existing Home Sales
1530 – EIAs Weekly Natural Gas Storage Change
1800 – US Treasury to auction 30-year T-bonds
Earnings this week
Today: Hermes, L’Oreal, Applied Materials, Siemens, Arista Networks, Unilever, Softbank Group, Anheuser-Busch InBev, British American Tobacco, Vertex Pharmaceuticals, Brookfield, Agnico Eagle Mines, Howmet Aerospace, Airbnb, Vale, Mercedes Benz, Japan Tobacco, KBC Group, American Electric Power, Zoetis, Coinbase
Thu: Safran, Enbridge, NatWest, Tokio Marine Holdings, Japan Post Bank, TC Energy, Cameco
For all macro, earnings, and dividend events check Saxo’s calendar.
Equities
USA: U.S. equities were mixed: the S&P 500 was flat at 6,941.47, the Dow fell 0.1% to 50,121.40, and the Nasdaq slipped 0.2% to 23,066.47. Stocks digested a stronger-than-expected January jobs report as payrolls rose 130,000 versus about 70,000 expected and unemployment dipped to 4.3%, while downward revisions tempered the upside. Micron jumped 9.9% on tight memory supply tied to AI demand, while Zillow sank 16.5% after weak results and outlook and Shopify fell 6.7% on a profit miss despite approving a $2 billion buyback. After the bell, Cisco slid 7.6% as higher memory costs squeezed gross margin; investors next focused on inflation data and more earnings.
Europe: European equities were steady overall as the STOXX 600 rose 0.1% to a record 621.58, while the Euro STOXX 50 slipped 0.2% to 6,035.64. Commodity-linked sectors did the heavy lifting as energy and miners rallied, while technology lagged amid renewed debate about whether AI could pressure software revenues. Siemens Energy surged 8.4% after profit nearly tripled on strong grid and turbine demand, Heineken gained 4.4% on a major cost-cut plan, and Ahold Delhaize jumped 11.5% after upbeat U.S. trading, while Dassault Systèmes plunged 20.8% on weak guidance. With U.S. data nudging yields higher, investors next watched more earnings and fresh signals on the spring rate path.
Asia: Asian markets edged higher, led by Hong Kong, as the Hang Seng rose 0.3% to 27,266.38 and Japan’s Nikkei 225 added 0.4% to 57,903.00, while China’s Shanghai Composite rose 0.1% to 4,131.98 and the CSI 300 fell 0.2% to 4,713.82. The mood improved after the People’s Bank of China reiterated support for domestic demand, and softer inflation data reinforced expectations of more policy help. SenseTime gained 2.9% after being added to the MSCI China Index, Minth Group rose 1.5% as investors leaned into the pro-demand message, while SMIC fell 2.2% after warning that AI-linked memory tightness was triggering panic behaviour; markets next watched for follow-through in China policy steps and credit data.
Volatility
Volatility remains contained, but markets are clearly in “event-watch” mode. The VIX closed at 17.65 on 11 February, a level that reflects caution rather than stress, while the Cboe SKEW index eased to 143.78, suggesting tail-risk pricing has moderated compared with recent peaks. Together, this points to investors staying invested, but not complacent.
Today’s US data flow, including initial jobless claims and existing home sales, alongside the 30-year Treasury auction, could influence rate expectations and equity sentiment. With the January jobs report surprising to the upside earlier this week, markets remain sensitive to any data that shifts the path of Federal Reserve policy.
Options pricing implies an expected move for the S&P 500 of roughly ±62 points (around ±0.9%) into Friday’s weekly expiry, indicating measured but meaningful event risk.
Skew check (today’s expiry): your options chain shows a mild upside skew, with calls priced slightly richer than comparable puts around the money. That suggests investors are still willing to pay for upside participation rather than aggressively hedging for an immediate downside break.
Digital Assets
Digital assets continue to trade in line with broader macro sentiment. Bitcoin is hovering around the mid-$67,000 area, while ethereum trades near $1,950, both struggling to sustain upside momentum after the stronger-than-expected US jobs data reinforced a “higher for longer” rate narrative.
ETF flows underline this cautious tone. On 11 February, US spot bitcoin ETFs saw net outflows, including approximately -$73 million from IBIT, while US spot ethereum ETFs also recorded net redemptions, with ETHA around -$29 million. The message is not capitulation, but selective de-risking.
Altcoins remain mixed rather than trending. Solana is holding near $80 and XRP around $1.38, reflecting consolidation rather than a decisive risk-on move. Broader crypto-linked equities have also seen pressure in recent sessions, consistent with investors trimming high-beta exposure rather than rotating aggressively back into the space.
Overall, the digital asset market reads as cautious but orderly: positioning is being adjusted, not abandoned.
Fixed Income
US Treasury yields jumped on a stronger than expected US January jobs report, which showed strong private payrolls gains and a drop in the unemployment rate (See above). The benchmark 2-year treasury yield rose as much as nine basis points Wednesday from near range lows before pulling back slightly to close the day at 3.51%. The 10-year benchmark treasury yield jumped from new local lows intraday on Wednesday below 4.12% to as high as 4.20% after the jobs report. A 10-year treasury auction saw tepid demand.
Europe’s sovereign bond yields shrugged off the jump in US treasury yields Wednesday, with the benchmark German 2-year Schatz yield erasing an intraday surge in yields and posting a marginally lower close below 2.07%, the lowest daily close since early December.
Japan’s government bond yield curve flattened sharply Thursday as the 2-year benchmark yield remains pinned near the cycle highs, almost unchanged from the prior day’s close near 1.31%, while the very longest 30-year and 40-year Japanese bonds were snapped up once again. The 30-year benchmark JGB yield plunged over eight basis points to trade near 3.42% late in Tokyo hours Thursday, it’s lowest yield in over a month and relative to the spike high of 3.876% from just three weeks ago.
Commodities
Sugar futures slid to a five-year low at 13.5 cents/lb and have now more than halved since the November 2023 peak above 28 cents/lb, pressured by prospects of a bumper Brazilian crop that is set to widen the global surplus, while the risk of producer hedging may add further downside pressure. The downturn has also been reinforced by a sharper-than-expected slowdown in sugar consumption across the US and other developed economies—partly linked to the growing uptake of GLP-1 weight-loss drugs, which curb appetite for the sweetener.
Gold eased back from above USD 5,100 and silver from above USD 86 after stronger-than-expected US jobs data tempered expectations of imminent Fed rate cuts, lifting both the dollar and bond yields. The renewed focus on incoming economic data suggests a degree of normalisation following the recent volatility spike, while the upcoming Lunar New Year holiday in China may further dampen risk appetite and liquidity.
Brent crude briefly traded back above USD 70 as US–Iran tensions flared, before retreating after President Trump signalled his preference for a negotiated agreement with Tehran. Additional pressure came from swelling US supply, with the EIA reporting an 8.5 million barrel increase in crude inventories last week alongside rising gasoline stocks, reflecting softer mobility during the recent winter period.
Currencies
The yen firmed broadly again late Wednesday and early in Thursday’s Asian session before sellers finally came in after USDJPY approached the recent lows, trading as low as 152.27 (recent low and low since October was the late January mark of 152.10) before rebounding to 153.50 late in Thursday’s Tokyo session, though trading remained choppy. EURJPY hit its lowest level of the year below 181.00, posting a 180.85 mark before rebounding to the 182.00 area later Asian hours on Thursday.
The USD rebounded sharply on Wednesday’s US jobs data, but the move was cut short after a spiky advance. EURUSD slipped from 1.1900 to below 1.1840, but rebounded to close the day nearer 1.1880 before the USD rose again modestly in Asia’s Thursday session.
AUDUSD managed to recover quickly from the strong US jobs data Wednesday. After slipping below 0.7075, the pair quickly rebounded and even posted a modest new high for the cycle just shy of 0.7150 before getting pushed back below 0.7120 early Thursday.
