Market drivers and catalysts
Equities: US hit fresh records on CPI; Europe firm after ECB hold with autos strongest; Asia mixed with Japan and China higher while Hong Kong slipped on pharma
Volatility: VIX drops, SPX +0.85%, selective single-name vol, Fed next week, SPX move ±22pts
Digital Assets: BTC $115.5k, ETH $4.5k, $3.4bn expiry, Solana inflows, selective sentiment
Currencies: US dollar weakens, if not decisively after yesterday’s data
Commodities: Silver posts new cycle high, crude trades heavy on supply outlook
Fixed Income: US short treasury yields steady after US data
Macro events: US Preliminary Sep. University of Michigan Sentiment
Macro headlines
US Treasury Secretary Scott Bessent will meet with Chinese Vice Premier He Lifeng in Madrid, Spain today to discuss trade, Tiktok and other issues.
US August CPI rose to 2.9% year-on-year from 2.7% in June and July, in line with expectations. Food, vehicle prices, and energy costs increased, while gasoline and fuel oil declined less sharply. The month-on-month August CPI rose 0.4%—the highest since January and slightly more than the +0.3% expected. Core inflation remained at 3.1% YoY, with core CPI rising 0.3% MoM, as expected and matching July's pace.
The ECB held interest rates steady: deposit at 2.00%, refinancing at 2.15%, and lending at 2.40%. Inflation nears the 2% target with projections of 2.1% in 2025, 1.7% in 2026, and 1.9% in 2027. Core inflation expected at 2.4% in 2025, 1.9% in 2026, and 1.8% in 2027. Growth projected at 1.2% in 2025, 1.0% in 2026, and 1.3% in 2027.
US initial weekly jobless claims rose by 27,000 to 263,000 in early September, the highest since October 2021 and above the expected 235,000, although some noted the odd spike in jobless claims from Texas, which drove most of the surprise. The four-week average increased by 9,750 to 240,500, the sharpest weekly rise since December 2020.
The average US 30-year fixed mortgage rate backed by Freddie Mac dropped 15 bps to 6.35%, the lowest since early October. This decline followed falling Treasury yields, amid signs of a slowing US labor market and prospects of Fed rate cuts.
Macro calendar highlights (times in GMT)
0600 – UK Jul. Manufacturing Production
0600 – UK Jul. Trade Balance
0645 – France Final Aug. CPI
1400 – US Sep. Preliminary University of Michigan Sentiment
Earnings this week
Next week
Tuesday: Ferguson
Wednesday: Exor NV, General Mills
Thursday: FedEx, Lennar, Darden Restaurants, Next PLC
For all macro, earnings, and dividend events check Saxo’s calendar.
Equities
US: S&P 500 +0.9% to 6,587.5, Dow +1.4% to 46,108, and Nasdaq 100 +0.7% as August CPI rose 0.4% m/m while jobless claims hit a 2021 high, bolstering rate-cut odds. Breadth improved across materials, healthcare, consumer, and semis. Tesla +6.0% on risk-on EV sentiment. Micron +7.6% after a price-target lift and AI-driven DRAM demand. Centene +9.0% after reaffirming profit and steady Medicare star ratings. Warner Bros Discovery +29.0% on takeover chatter. Focus turns to next week’s Fed decision and a heavy IPO tape led by Gemini.
Europe: Euro STOXX 50 +0.5%, STOXX 600 +0.6%, FTSE 100 +0.8% after the ECB held rates and trimmed the inflation path, keeping a data-dependent stance. Autos outperformed as Stellantis +9% outlined a U.S. reboot including relaunches to revive revenue. Discretionary aided the tape with Inditex +2.3% as spending resilience helped retailers. Defence remained supported into geopolitical noise, while bond yields steadied after the decision. Near term, traders watch US policy signals and French risk for follow-through.
Asia: Tone mixed on prior local closes. Nikkei 225 +1.2% as chip momentum and softer global yields lifted exporters. CSI 300 +2.3% on relief around policy support and balance-sheet clean-up chatter. Hang Seng −0.4% to 26,086 as pharma slumped on potential U.S. scrutiny; Hansoh −8.3% and CSPC −7.1%. Internet and autos were softer with Meituan −4.6% and Li Auto −2.9% as profit and competition worries lingered. Next catalysts are China credit data and the PBoC’s policy tone.
Volatility
Implied volatility retreated on Thursday with the VIX closing at 14.71 (−4.17%), while SPX gained 0.85% to 6,587. Short-term measures like VIX1D and VIX9D dropped sharply, down 24.7% and 9.1% respectively, pointing to easing near-term stress. Still, headline-driven moves remain, with single-name volatility spikes across UPS, Rivian, and Cisco, plus activity in airlines and energy. With the Fed decision next week, index vol stays event-driven rather than systemic. Today’s options imply an SPX expected move of ±0.33% (~22 points), suggesting contained ranges unless macro data surprises.
Digital Assets
Crypto markets are steady, holding gains from earlier in the week. Bitcoin trades around $115.5k, supported by fresh inflows into the IBIT ETF (+$113m on 11 Sep). Ethereum firmed to $4,522 (+1.4%), with options markets focused on today’s $3.4bn BTC expiry as a short-term driver. Solana rallied +4.3%, buoyed by new capital allocations including Galaxy Digital’s $530m investment, framing a “Solana season” narrative. XRP held near $3.06, while meme tokens lost momentum after ETF delays. IPO activity (Gemini, Figure) underscores institutional interest, but sentiment stays selective, not euphoric.
Fixed Income
US treasuries were bid again yesterday after the release of US CPI and weekly jobless claims data, with the benchmark 30-year treasury bond yield hitting new lows below 4.70%. At the shorter end of the curve, yields also fell sharply on the US data releases, but unwound more of the move later in the session. The benchmark 2-year treasury yield is unchanged from the levels before the data - at 3.54% this morning after a 3.47% low yesterday.
European yields rose slightly at the front end of the curve as the ECB made it clear that it prefers to keep the policy rate unchanged, barring an economic shock, after yesterday affirming the expected no-change to the policy rate at 2.00%.
Commodities
Gold and silver: the consolidation in the gold price hardly lasted any time at all, as fresh buying came in around the USD weakness yesterday on the US CPI release and gold has rallied back north of 3,650, while silver notched new cycle highs late yesterday above 41.67 and even extended above USD 40 per ounce in the Asian session overnight.
Crude trades close to recent cycle lows after the International Energy Agency projected larger surpluses in the market than previously. November Brent trades just below USD 66 per barrel with the 65 area an important range low area since early June. October WTI trades closer to its recent range support below 62.
Currencies
The US dollar traded weaker on the back of the August US CPI and weekly jobless claims releases, though still remains within recent ranges against the major currencies with the exception of AUDUSD, which managed to post a new high for the year and since November of last year, surging above 0.6660 at its highest before finding resistance. USDJPY remains mired deep in the range as the JPY remains weak ahead of next week’s FOMC and BoJ meetings.
The Norwegian krone topped the leader board among G10 currencies this week, as EURNOK fell below 11.60, posting a 11.564 low overnight ahead of next week’s Norges Bank meeting, where expectations lean in favour of a rate cut to one of the highest policy rates among G10 currencies, currently at 4.25%.
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