Market drivers and catalysts
Equities: U.S. finished mixed after cooler inflation data, Europe slipped on earnings cross-currents, Asia traded quietly in holiday-thinned markets.
Volatility: Holiday carryover, FOMC minutes, PCE inflation, elevated skew
Digital Assets: BTC/ETH consolidate, mixed IBIT/ETHA flows, crypto equities stronger
Fixed Income: Short US treasury yields hit their lowest since 2022 on soft headline US CPI data.
Currencies: JPY starts off week on a weak note on soft Japan Q4 GDP estimates.
Commodities: China’s Lunar New Year holiday may limit demand for metals through 23 February
Macro events: Eurozone Dec. Industrial Production; US markets closed today for Presidents’ Day
Macro headlines
US inflation slowed to 2.4% in January from a year earlier, down from 2.7% in December, helped by lower prices for gasoline and used vehicles. Trump cheered the report calling for "long-overdue interest rate cuts from the Fed". Note, the short-term interest rate market has now fully priced in two rate cuts by October
Japan's real Q4-2025 GDP grew 0.2% on an annualized basis in the three months through December, weaker than economists' median estimate of 1.6% growth. Consumer spending, the biggest component of GDP, grew 0.1%, showing the fragility of domestic demand as households continue to cope with inflation.
A “RAMmageddon” is feared in the memory-chip industry as tightening supply threatens to squeeze margins for other companies, disrupt corporate planning, and push up prices across a wide range of electronic products. The shortage is expected to intensify, driven by the rapid build-out of AI data centres that is diverting capacity toward high-performance memory. As a result, consumer-electronics manufacturers are competing for shrinking supply, forcing distributors and retailers to adjust prices almost daily.
Macro calendar highlights (times in GMT)
China’s markets are closed for Lunar New Year through to 23 February.
Markets closed in the US today for Presidents’ Day
1000 – Eurozone Dec. Industrial Production
1315 – Canada Jan. Housing Starts
1325 – US Fed’s Bowman to speak
1330 – Canada Dec. Manufacturing sales
0030 – Australia RBA Meeting Minutes
Earnings this week
Today: BHP Group
Tuesday: Medtronic, Palo Alto Networks, Cadence Design Systems, Republic Services, Antofagasta, Vulcan Materials, EQT, DTE Energy, FirstEnergy, Devon Energy
Wednesday: Analog Devices, Booking Holdings, Glencore, Carvana, BAE Systems, DoorDash, Moody’s, Orange
Thursday: Walmart, Alibaba, Nestle, Airbus, Rio Tinto, Deere, Newmont, Zurich Insurance, Constellation Energy, Southern Company, Quanta Services, Targa Resources
Friday: Air Liquide, Warner Brothers Discovery, Anglogold Ashanti, Ango American, Danone
For all macro, earnings, and dividend events check Saxo’s calendar.
Equities
USA: The S&P 500 edged up 0.1% to 6,836.17 and the Dow rose 0.1% to 49,500.93, while the Nasdaq Composite dipped 0.2% to 22,546.67. Markets took a cooler inflation print as “good news”, but AI-disruption worries still weighed on parts of tech. Applied Materials jumped 8.1% on upbeat results and demand tied to AI hardware, while Rivian surged 26.6% after earnings and a more optimistic outlook. DraftKings fell 13.5% after a weak forecast, keeping the “good numbers, bad guidance” mood alive.
Europe: The Stoxx 600 slipped 0.1% to 617.7 and the Euro Stoxx 50 fell 0.4% to 5,985.23 as investors digested a heavy earnings tape and the lingering “AI could change the business model” narrative. The lift from softer U.S. inflation was not enough to offset stock-specific swings, especially in financials and consumer names. Safran rallied 8.3% after raising its guidance, and Capgemini rose 5.1% after beating revenue expectations, while L’Oréal fell 4.9% after sales missed forecasts. Attention shifted to the next wave of results for confirmation that growth was broad, not just selective.
Asia: Japan’s Nikkei 225 eased 0.2% to 56,806.41 as weak Japan growth data met thin liquidity, while Australia’s S&P/ASX 200 added 0.2% to 8,937.10 with tech and defensives offsetting softer miners. Hong Kong’s Hang Seng rose 0.5% to 26,705.94 in a half-day session as volumes stayed light ahead of the Lunar New Year break and mainland markets remained shut. In Hong Kong, Zijin Mining gained 4.7% and CNOOC rose 3.7% as materials and energy led, while HSBC slipped 1.1% and Yum China dropped 4.6%. With Hong Kong set to resume trading on Friday, investors watched whether risk appetite returned once the holiday curtain lifted.
Volatility
US markets are closed today for Presidents’ Day, so volatility is effectively being carried over from Friday’s close. The VIX finished at 20.60, while very short-term volatility (VIX1D at 22.43) remains elevated, signalling that investors are still cautious heading into a busy week. By contrast, VIX9D at 18.77 suggests that some event risk may already be priced in, but not fully resolved.
The focus now shifts to Wednesday’s FOMC minutes and Friday’s core PCE inflation data, the Federal Reserve’s preferred inflation gauge. Together with durable goods, PMI surveys and GDP revisions, these releases could quickly reshape rate-cut expectations and, in turn, equity market sentiment. Earnings from Walmart, Palo Alto Networks, Analog Devices and Deere also add stock-specific volatility risk.
SPX expected move for the week (options-implied): ±128 points, or roughly ±1.9%, into Friday 20 February, based on current weekly options pricing.
Skew indicator: there is no 0DTE expiry today due to the US holiday. Using Friday’s weekly expiry as reference, skew remains elevated (SKEW 139.35), indicating investors continue to pay a premium for downside protection rather than upside participation.
Digital Assets
Crypto markets are trading with a slightly defensive tone. Bitcoin is hovering around the $68,000 level, while Ethereum trades near $1,960. Solana and XRP are also modestly lower on a 24-hour basis. The broader pattern suggests consolidation rather than panic, but conviction on the upside remains limited.
The ETF picture is mixed. On the latest reported session (13 February), total US spot Bitcoin ETF flows were positive overall, yet IBIT saw net outflows. Ethereum ETF flows were also positive in aggregate, but ETHA recorded outflows. This split signals selective positioning rather than broad-based risk appetite.
Interestingly, crypto-related equities are showing relative strength despite softer token prices. Coinbase, MicroStrategy and several mining stocks posted solid gains on Friday, suggesting equity investors may be positioning for medium-term recovery even as spot markets stabilise.
For investors, the key question is whether macro stability this week, particularly around inflation and Fed expectations, can translate into renewed ETF inflows. Without that, crypto may remain range-bound rather than trending.
Fixed Income
US Treasuries found a further strong bid Friday on softer than expected headline US CPI data, with the entire curve reset lower. At the front end of the curve, the benchmark 2-year treasury yield fell to close below 3.41% its lowest daily close since 2022, while the benchmark 10-year yield fell five basis points to close just below 4.05%, its lowest close since late November of last year. US markets are closed today.
US high yield debt spreads widened, mostly as a function of strong demand for US treasuries Friday. The Bloomberg indicator we track of high yield spreads to US treasuries widened five basis points to its highest level this year at 280 basis points.
Japan’s government bond yield curve steepened Monday in the wake of soft Q4 GDP data, as the benchmark 2-year JGBP yield dropped back two basis points to 1.27% Monday, while the benchmark 30-year JGB yield rose more than three basis points to above 3.49%.
Commodities
Gold rallied back above USD 5,000 on Friday, recovering from a USD 160 slide the previous day after a softer US CPI print pushed bond yields lower and lifted rate-cut expectations. China — a key engine behind the month-long rally in precious metals and selected industrial metals — will remain closed through 23 February, potentially limiting additional upside in the near term. Key levels to watch are USD 4,860 on the downside and USD 5,140 on the upside.
Crude oil trades steady, with Brent hovering near USD 68 as traders focus on geopolitical developments ahead of renewed US-Iran talks on Tuesday. Absent any Middle East supply disruption, the scope for a sustained move above USD 70 appears limited, given continued emphasis on ample supply and indications that some OPEC members see room to resume output increases in April. This comes ahead of the formal OPEC meeting on 1 March to review the current supply agreement.
Currencies
The Japanese yen weakened broadly to kick of the new week in the wake of softer than expected Q4 GDP estimates for Japan. USDJPY rebounded back above 153.00 after ending last week at 152.70.
The USD traded in a very tight range outside of USDJPY Monday despite the strong reaction in the US treasury market Friday to the soft headline US inflation number. US markets are closed today.
For a global look at markets – go to Inspiration.
