Market drivers and catalysts
Equities: Tariff shock hit U.S. tech and chips. Europe fell. Asia ended softer.
Volatility: VIX +31.8%. Short-vol trade vulnerable. Dispersion elevated
Digital assets: BTC/ETH rebound. $19B liquidated. IBIT/ETHA down. China risk still looms
Currencies: JPY and CHF in demand amid fresh trade US-China tensions
Commodities: Silver hits fresh multi-decade high on tight supply squeeze
Fixed Income: US 10-year notes tumbled on Friday. Treasury market closed today
Macro events: No data of note with focus on US-China relations
Macro headlines
Trump's administration signaled openness to a China trade deal despite rising tensions from Beijing's export controls and Trump's announcement of 100% tariffs on Chinese imports starting November 1. Beijing vowed countermeasures, threatening trade negotiation progress. A Commerce Ministry spokesperson condemned the tariff threats, asserting China's readiness to protect its interests while stating it does not seek, but is prepared for, a tariff war.
The University of Michigan's US consumer sentiment was 55 in October 2025, almost unchanged from September's 55.1 and above forecasts. The economic conditions index rose to 61, while expectations fell to 51.2. Inflation expectations for the year ahead edged down to 4.6%, while long-term expectations remained at 3.7%.
Japan's opposition considers a unified PM candidate to challenge LDP President Takaichi and aims to form an alliance with other parties, according to Nikkei.
China’s September exports grew at the fastest pace in six months, rising 8.3% YoY, beating the 6.6% forecast, while imports grew 7.4%, leaving a $90.5b surplus. Shipments to the US plunged 27% but were offset by strong growth in sales to other regions including the EU, where exports rose by more than 14%, signaling resilience and bolstering Beijing’s hand in its trade standoff with the US.
Macro calendar highlights (times in GMT)
US Government data are impacted by shutdowns and are likely to be delayed
0800 – Trump delivers remarks to The Knesset
LME Week in London through Oct. 17
During the day: OPEC’s Monthly Oil Market Report
Markets closed: Japan, Canada & US bond market
Earnings events
Monday: Fastenal
Tuesday: JP Morgan, Johnson & Johnson, Louis Vuitton, Wells Fargo, Goldman Sachs, Blackrock, Citigroup
Wednesday: ASML, Bank of America, Morgan Stanley, Abbott Laboratories, Rio Tinto, Progressive
Thursday: TSMC, Charles Schwab, Interactive Brokers, Nestle, ABB, Essilor Luxottica
Friday: American Express, Reliance Industries, Volvo
For all macro, earnings, and dividend events check Saxo’s calendar.
Equities
USA: U.S. equities slumped Friday as tariff threats on China and tighter Chinese checks on U.S. chips sank tech. The S&P 500 fell 2.7%, Nasdaq 3.6%, and Dow 1.9%. Chipmakers led declines with AMD −7.7%, Nvidia −4.9%, and Qualcomm −7.3% on China antitrust scrutiny and import enforcement. Mega-caps added pressure as Apple −3.5% and Microsoft −2.2% extended the selloff. With the government shutdown ongoing, attention turns to the Q3 earnings kickoff and any clarity on tariff scope and timing.
Europe: European stocks fell for a second session Friday as trade worries and Middle East ceasefire headlines weighed. Euro STOXX 50 −1.7% and STOXX 600 −1.3%, while FTSE 100 −0.9%. Defence lagged: Leonardo −4.7%, Thales −2.0%, BAE Systems −1.6%, and Rheinmetall −1.2% as de-escalation bets pulled the group lower. A bright spot came from Denmark, where Jyske Bank rose 3.6% after lifting its 2025 guidance. Focus now shifts to earnings and data as markets parse any tariff details.
Asia: Asia ended last week on the back foot. On Friday, Hang Seng −1.7% to 26,290 as tech and property weakened; CSI 300 −2.0%. Chinese policy added drag, with expanded rare-earth export controls and stricter checks on imported AI chips cited by local press. Among Hong Kong names Friday, SMIC fell about 7%, Kuaishou 5.5%, and Tencent 3.6%. Near-term attention stays on China’s September credit and trade prints and any follow-through on export rules.
Volatility
Volatility jumped sharply Friday as tariff tensions reignited, with the VIX climbing to 21.66 (+31.8%) after Trump’s threat of a 100% China tariff triggered the S&P 500's 2.7% drop. Despite this spike, traders aren’t showing signs of panic - dealer positioning remains balanced, and most describe the move as an “orderly repricing.” The bond market is closed today for Columbus Day, possibly amplifying swings in equities. High single-stock volatility versus the broader calm VIX suggests dispersion is running hot -a common setup during earnings season.
- Expected SPX move this week: ±140 points, or ±2.1%, into Friday’s close based on options pricing.
- Watch for more volatility as CPI, retail sales, and big-bank earnings crowd the calendar.
Digital Assets
Crypto markets steadied on Monday after a dramatic weekend flush. BTC hovered near $114.7k, and ETH near $4.1k, both rebounding from steep declines sparked by Trump’s tariff announcement. Over $19B in liquidations followed the move, as thin weekend liquidity and algorithmic selling intensified the drop. A sharp shift in the Crypto Fear & Greed Index—from 64 to 27— showed just how fast sentiment collapsed. Still, Trump’s softer tone and signs of U.S.–China dialogue helped calm markets.
ETF sentiment is split: IBIT dipped -3.7%, while ETHA fell -7.9%, dragging down crypto-adjacent equities like COIN -7.7% and MSTR -4.8%.
Altcoins remain mixed as traders assess what’s next.
Fixed Income
US 10-year Treasury yields tumbled to near 4% on Friday amid rising US-China tensions, supporting calls for lower rates, only to bounce back a bit after President Donald Trump signalled openness to a China deal amid renewed trade tensions. With the US cash Treasury market closed today for Columbus Day or Indigenous Peoples’ Day, traders will be watching the futures market with the 10-year Treasury Note contract currently showing a loss of just 4 ticks after closing at a three-week high on Friday.
Commodities
Silver surged to a decade high at USD 51.7 as a historic short squeeze in the London cash market spilled over to COMEX futures in New York, where prices are up close to 5% in today’s session. Gold reached a fresh record at USD 4,078, supported by continued investor and central bank demand amid renewed focus on the escalating U.S.–China trade spat, prospects for lower rates, and concerns about the U.S. government shutdown and its mounting debt burden. While both metals appear technically overbought, they remain structurally under-owned in global portfolios.
Crude oil prices rebounded after Trump signaled openness to a deal with China to ease trade tensions that had triggered a 4% drop on Friday. Technically, both WTI and Brent remain weak but are still confined within their established trading ranges. In the week to October 7, hedge funds cut their net long in Brent by 30% to a five-month low, highlighting fading confidence in higher prices amid rising OPEC+ production.
Copper prices tumbled 5% on Friday following Trump’s tariff threat, only to bounce back in Asia amid a softer tone from both sides. The annual LME Week kicks off today in London with industry insiders likely to focus on bullish factors from mine disruptions and long-term demand growth driven by electrification.
- The U.S. government shutdown continues to delay the release of the CFTC’s closely watched Commitment of Traders (COT) report. If the shutdown persists, managed money and other speculative accounts may again operate under the radar for an extended period.
Currencies
USD's safe-haven status diminished after President Trump criticized China's rare earth export policy, suggesting potential tariffs on Chinese imports. This prompted a risk-off sentiment, boosting the CHF and JPY. Concerns about a November US-China trade agreement resurfaced, yet the Dollar Index remained strong, ending the week around 98.97 before easing back in early Monday trading.
The JPY traded choppily around 152 after Japan's governing coalition collapsed after talks between Liberal Democratic Party chief Sanae Takaichi and junior partner Komeito leader Tetsuo Saito ended without agreement.
- Trump's tariff threat saw USDCNH jump from 7.125 to near 7.15 on Friday before easing back in Asia today amid the US administrations attempt to ease tensions.
