Market drivers and catalysts
Equities: US edged higher on AI optimism, Europe lagged on oil and luxury weakness, Asia rose as Korea’s chip rally widened.
Volatility: VIX firmer, oil and CPI in focus, downside hedging persists
Digital Assets: Bitcoin steady above USD 81k, ETF flows mixed, crypto equities outperform
Fixed Income: Global bond yields rise ahead of US CPI release.
Currencies: USD up, JPY down ahead of US CPI as yield rise. Sterling eyes shaky Starmer government
Commodities: Oil remains bid, silver surges on fresh momentum buying, copper hits record high
Macro events: Germany ZEW Survey, US April CPI, US Treasury to auction 10-year Notes
Macro headlines
Kevin Warsh’s Fed Board nomination cleared an initial Senate hurdle in a 49–44 vote, with a final confirmation vote to succeed Jerome Powell as chair expected later this week.
Trump warned the US–Iran ceasefire was on “massive life support” after rejecting Tehran’s proposal, raising fears Hormuz will stay effectively closed, as Iran seeks an end to the US naval blockade and some sanctions relief. Trump is weighing renewed military action and vessel escorts, while Saudi Aramco’s CEO says weekly losses of about 100 million barrels could delay market normalization into next year.
UK Prime Minister is under significant Labour party pressure to resign and will hold a cabinet meeting Tuesday morning that is seen as possibly pivotal for his government’s future.
Japan’s household spending fell 2.9% y/y in March 2026, a fourth consecutive drop and worse than the expected 1.3% decline, with broad weakness across food, utilities, clothing, and transport. Spending on housing, household goods, healthcare, and education rose, but overall outlays fell 1.3% m/m, reversing February’s 1.5% gain.
US existing home sales ticked up 0.2% to a 4.02 million annual rate in April 2026, below the 4.05 million forecast, as higher mortgage rates weighed. Sales fell in the West but rose in the Midwest, while inventory increased 5.8% to 1.47 million (4.4 months’ supply). The NAR cited improved affordability as incomes outpaced home price gains.
Macro calendar highlights (times in GMT)
· 0600 – Germany April Final CPI
· 0900 – Germany May ZEW Survey
· 1215 – US Weekly ADP Employment Change (four weeks ending Apr 25)
· 1230 – US April CPI
· 1600 – EIA's Short-term Energy Outlook (STEO)
· 1700 – US to Sell USD 42 Billion 10-year Notes
· 0130 – Australia Q1 Wage Price Index
Earnings this week
Monday (yesterday): Petrobras, Constellation Energy, AST SpaceMobile
Tuesday (today): 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 0.2%, the Nasdaq Composite added 0.1% and the Dow gained 0.2%, with the S&P 500 and Nasdaq closing at fresh records. Chipmakers led as AI optimism again beat geopolitical nerves, despite higher oil prices after Trump rejected Iran’s response to his peace proposal. Nvidia rose 2% on continued AI demand, Qualcomm jumped 8.4% on chip momentum, Micron gained 6.5% on tighter memory supply expectations, and Tesla added 3.9% as appetite for megacap growth stayed firm. Markets now watch oil, inflation data and the Trump-Xi meeting.
Europe: The Euro STOXX 50 fell 0.3% to 5,895.45, while the STOXX 600 was slightly up to around 613, as Middle East risks and disrupted energy exports kept investors cautious. Luxury led the weakness, with LVMH down 4.4%, Hermès off 3.3% and L’Oréal down about 2.6% as investors worried about weaker discretionary demand and pressure from higher energy costs. Industrial names offered some balance, with Schneider Electric up 2.3% and Siemens gaining 1.4% ahead of earnings. Europe’s main test remains simple: can earnings hold if oil keeps behaving like an unpaid intern with access to the red button?
Asia: Asian stocks rose, led by South Korea, where the Kospi jumped 4.3% to a record 7,822.24 as AI memory demand continued to drive a powerful chip rally. SK Hynix surged 11.5% and Samsung Electronics gained 6.3% on tighter memory supply expectations and strong demand for high-bandwidth memory used in AI servers. In Hong Kong, the Hang Seng was little changed at 26,406.84, helped by HSBC up 1.8%, while China’s Shanghai Composite gained 1.1% to 4,225.02, its highest since 2015. The region’s next focus is whether the AI rally broadens or stays concentrated in chips.
Volatility
Volatility remains contained, but markets are no longer fully relaxed. The VIX closed at 18.38 on 11 May, while shorter-dated volatility signals stayed elevated, with VIX9D rising 18.9% as investors positioned for a potentially more volatile week ahead. The main drivers remain rising oil prices near USD 105, fragile US-Iran negotiations, today’s US CPI release, and a US 10-year Treasury auction that could influence yields and equity valuations.
Based on SPX options pricing, the expected move into the 15 May expiry is around 86.8 points, or 1.17%, from an SPX level near 7,412.84.
For today’s expiry, the implied move is about 36.9 points, or 0.50%. Today’s 0DTE positioning also shows a defensive tone beneath the surface: near-the-money puts continue to trade at higher implied volatility than equivalent calls around the 7,410–7,415 strikes, suggesting investors are still paying a premium for short-term downside protection despite equities remaining near record highs.
Digital Assets
Crypto markets are stable but cautious ahead of today’s US inflation data and ongoing Middle East tensions. Bitcoin is trading near USD 81,200 after briefly moving above USD 82,000 over the weekend, while Ethereum is softer near USD 2,310. XRP and Solana are slightly lower on the day, reflecting a broader wait-and-see tone across risk assets rather than outright risk aversion.
IBIT remains the key institutional sentiment gauge. BlackRock reported approximately USD 67.3bn in IBIT net assets as of 11 May, although Farside data showed a modest USD 7.4mn outflow from the ETF on the same day, even as US spot Bitcoin ETFs collectively attracted USD 27.2mn in net inflows. ETHA was steadier, trading around USD 17.67, while Ethereum ETFs overall saw USD 17.0mn of net outflows, partially offset by a USD 2.1mn inflow into ETHA.
Meanwhile, crypto-linked equities including COIN, MSTR, MARA, RIOT and CRCL outperformed underlying cryptocurrencies, suggesting investors continue to favour listed crypto exposure when market sentiment improves.
Fixed Income
US Treasuries continued to weaken, sending yields to their highest levels in a week ahead of today’s US April CPI release, seen as a possible catalyst for the forward view of Fed policy. The benchmark US 2-year treasury yield rose almost seven basis points to 3.95% Monday and nudged above 3.96% in early trading Tuesday, while the benchmark 10-year treasury yield rose about six basis points in total since Friday’s close to trade above 4.42%. The highest daily close for the 2-year benchmark since the Iran war reset inflation expectations higher is above 3.98% as 4% is an obvious focus. For the 10-year yield, the highest daily close is just below 4.44%.
Japan’s government bond yields remain under pressure, steepening the yield curve and sending the 10-year JGB yield to a new cycle high. The benchmark 2-year JGB yield rose less than a basis point Tuesday, but looks to close the day just south of 1.40%, the highest level since mid-April, where the intraday high-water mark is 1.417%. The benchmark 10-year JGB yield, meanwhile, rose another 2.5 basis points and as high as 2.55% Tuesday, the highest level since the 1990’s as traders fret inflationary risks and a subdued BoJ policy response function to those risks.
Commodities
Oil prices climbed for a second day as the global oil market continued to tighten amid limited prospects for a reopening of the Strait of Hormuz. The move followed Trump casting doubt over a ceasefire with Israel signalling the war is not over. Attention this week will also turn to the monthly market outlooks from the three major oil forecasting agencies, starting today with the EIA, followed by OPEC and the IEA on Wednesday.
Silver jumped to a two-month high on Monday, rising more than 7% as technical signals triggered fresh buying from hedge funds and other momentum focused investors. With gold struggling to keep pace following Modi’s call for a pause in gold buying, the gold-silver ratio slumped to 55, the lowest since 1 March. Overall, gold remains rangebound, with support established ahead of USD 4,500, while resistance at the 50-day moving average, currently near USD 4,757, was challenged and rejected during the Asian session.
Copper in NY and London recorded their highest ever closing prices on Monday, with HG copper trading just below the January all-time high at USD 6.583 per pound, as the key transition metal continued to enjoy strong demand, especially from China where visible stocks have declined sharply in recent weeks. Combined with an increasingly challenging supply outlook, partly linked to the Strait of Hormuz disruption, traders have largely shrugged off the potential economic demand impact from the war.
Currencies
The US dollar traded firmer early Tuesday as higher global bond yields and the latest rally in crude oil prices was sustained. EURUSD drifted back to 1.1755 from above 1.1780 and the more rate-sensitive USDJPY rose above 157.70, closing in on the 158.00 area, which is the highest level seen since the dramatic official Japanese intervention began on April 30.
Sterling saw a choppy session Monday and ended Monday slightly weaker as traders eye the potential end of Starmer’s government, wondering what comes next. EURGBP rose to a new high for the month above 0.8660 early Tuesday.
