Market drivers and catalysts
Equities: Dow hit a record as healthcare led, Europe closed at fresh highs, Asia mixed
Volatility: Volatility stays subdued as markets wait for US inflation data to set direction
Digital Assets: Crypto markets hold steady, with investors cautious ahead of CPI
Fixed Income: US treasury yields lower on weak ADP payrolls numbers. UK 2-year Gilts hit lowest level in over a year on weak labor market data.
Currencies: JPY weakness dominates with EURJPY at all-time high.
Commodities: Precious metals consolidate recent gains. Crude awaits monthly reports
Macro events: US 10-year auction, Several FOMC members speaking
Macro headlines
US private employers cut an average of 11,250 jobs weekly during the last four weeks ending October 25, 2025, per ADP Research, highlighting a slowdown in the labor market. The ongoing government shutdown has postponed the Labor Department's September employment data. Additionally, Challenger, Gray & Christmas reported 153,074 job cuts in October, marking the highest monthly total since 2003.
White House economic adviser Kevin Hassett expects U.S. growth to rebound to 3%-4% by early 2026 despite the recent government shutdown, which could reduce growth by 1-1.5 points. He predicts some losses are permanent, but growth should recover by next year. Economists warn of challenges like weak consumer spending and high inflation, but increased business investment might counteract these issues.
Switzerland is nearing a 15% tariff agreement with the US, down from the 39% level the Trump administration slapped on the country earlier this year, possibly finalized by Thursday or Friday, pending President Trump's approval.
A senior researcher at DeepSeek warned that automation could trigger a severe labor crisis, “shaking society to its core,” according to the South China Morning Post. He urged AI firms to act as “whistleblowers” on which jobs will disappear first, noting that we are still in a “honeymoon phase.” While Western tech leaders have long warned of an AI-driven jobpocalypse, mainly for entry-level, white-collar roles, China is already facing a graduate labor crisis.
Macro calendar highlights (times in GMT)
US Government data are impacted by shutdowns and are likely to be delayed
0700 – Germany October PPI
1200 – US November MBA mortgage applications
1800 – US to sell USD 42 billion 10-year Notes
Fed speakers (voting members highlighted): Williams (1420), Paulson (1500), Waller (1520), Bostic (1715), Miran (1730), and Collins (2100)
Earnings events
Today: Cisco Systems, Hon Hai Precision, Infineon
Thursday: Siemens, Walt Disney, Applied Materials, Deutsche Telekom, Brookfield, Nu Holdings
Friday: Compagnie Financiere Richemont
For all macro, earnings, and dividend events check Saxo’s calendar.
Equities
USA: S&P 500 rose 0.2%, Dow added 1.2% to a record, and Nasdaq fell 0.3% as progress toward ending the shutdown lifted sentiment while tech lagged after SoftBank’s Nvidia sale. Big pharma pulled the Dow higher with Merck +4.8%, Amgen +4.6%, and Johnson & Johnson +2.9%. AI-linked names retreated, with Nvidia −3.0% and Micron −4.8% as profit-taking hit semis. Focus turns to the House vote on the funding bill and the next wave of retail earnings.
Europe: Stocks extended Monday’s rally to records, with the Euro Stoxx 50 up 1.1% and Stoxx 600 up 1.3%. Adyen jumped about 8% after setting 20% long-term growth and higher margin goals, while luxury and autos added support, including Hermès +3.7% and Stellantis +4.1%. The FTSE 100 notched another record close, up 1.2%, as softer UK labor data boosted rate-cut bets; Swiss luxury names rose on hopes of a tariff deal, with Swatch +4.2% and Richemont +2.0%.
Asia: Tone was mixed into policy and AI headlines. Nikkei 225 slipped 0.1% as chip weakness offset earlier strength, the Hang Seng gained 0.2% to 26,696 on property and financials, and the CSI 300 fell 0.9%. EV momentum stood out as Xpeng surged 17.9% on record October deliveries and product updates, while SMIC fell 2.9% amid renewed AI-chip jitters.
Volatility
Market volatility remains muted, with the VIX slipping toward the mid-17s as traders await tomorrow’s US CPI report — the key macro event likely to set the tone into year-end. Despite a steady upward drift in equities, the options market still prices in a moderate move of about $30–35 on the S&P 500 for today and roughly $60 into Friday’s expiry, signalling calm expectations rather than complacency.
Skew remains slightly tilted toward calls on the near-term SPX chain, hinting that investors are positioning for potential upside surprises rather than hedging for downside risk. With a 10-year Treasury auction due later today and data pressure building, investors seem content to sit tight until inflation confirms whether the Fed can stay patient on rates.
Digital Assets
Crypto markets trade sideways ahead of the CPI data, with Bitcoin holding near $103k and Ethereum around $3.4k. Spot ETF activity shows cooling enthusiasm — IBIT slipped roughly 3% and ETHA continues to see outflows — reflecting investor caution after recent macro-driven swings. Broader altcoins such as Solana and XRP still see selective buying, suggesting capital rotation rather than renewed risk appetite. Meanwhile, filings for potential XRP and Chainlink ETFs add an undercurrent of optimism that institutional access will broaden further.
Overall, the crypto space remains data-dependent and liquidity-sensitive, mirroring the macro market’s calm before tomorrow’s inflation print.
Fixed Income
US Treasury yields dropped yesterday on the weak ADP payrolls data that confuses after the prior report for October suggested modest payrolls growth. Only treasury futures were trading yesterday, but the benchmark 2-year yield is trading in the Asias today near 3.56%, three basis points below the Monday close while the benchmark 10-year yield is back near range lows near 4.09% after levels as low as 4.07% overnight.
UK government bond yields plunged yesterday on weak labor market data, with the benchmark 2-year Gilt posting a new low since August of 2024 at 3.72% yesterday, down eight basis points as the market brought forward more anticipation of Bank of England easing. The benchmark 10-year Gilt yield also dropped sharply, hitting 4.374% at the lows yesterday, a single basis point from the lows of 2025.
Commodities
Gold and silver eased back after a three-day rally amid ongoing risk-on sentiment across the stock market, as traders await the government’s reopening—and with it, a wave of economic data likely to cement expectations for another December rate cut amid continued labor-market weakness. US fiscal concerns remain a key and persistent source of support for investors seeking protection, but after the strongest year in decades, precious metals may face an extended period of consolidation.
Crude prices firmed on Tuesday as strength in refined fuels—bolstered by US sanctions targeting Russia’s leading producers—helped offset otherwise weak crude signals. Attention now turns to a series of monthly oil market reports, beginning today with OPEC and the EIA, followed by the IEA tomorrow, which may provide clearer guidance on the size and timing of an expected global surplus. The EIA’s weekly inventory data will be released one day later than usual.
Currencies
Among the major currencies, the USD action was neutral as JPY weakness dominates, with USDJPY slicing to new local highs above 154.50 and brushing off the first rhetorical intervention seen in a while from the Ministry of Finance head Katayama. EURJPY even posted a new all-time highs.
Sterling weakness remains a theme and EURGBP pulled back above 0.8800 on the weak UK labor market data yesterday, which sent short UK yields to their lowest level in over a year on the anticipation of more Bank of England easing.
The CHF rally extended on further on hopes (according to media sources) that the US is set to lower its very high tariff barrier to place it in line with the level of most trading partners, from 39 to 15%. EURCHF traded as low as 0.9266 yesterday and overnight before finding support, after the recent highs well above 0.9300.
