Market drivers and catalysts
Equities: U.S. and Europe edged higher on chips and earnings, while Asia slipped as China policy moves hit Hong Kong tech.
Volatility: VIX remains low, headline-driven risk, geopolitics easing
Digital assets: Bitcoin consolidates, Ether steady, IBIT/ETHA softer, US crypto bill delay
Currencies: JPY firms even more than relatively firm US dollar
Commodities: BCOM nears 2022 record high on precious metal and energy gains, led by silver, gold and diesel.
Fixed Income: US Treasury market remains in hibernation. US high yield bonds in demand.
Macro events: US Dec Industrial Production
Macro headlines
U.S.-Taiwan trade agreement, signed Thursday, aims to enhance U.S. semiconductor production and lower tariffs. Taiwan Semiconductor Manufacturing will build factories in Arizona, with a $250 billion investment. The U.S. will cut tariffs on Taiwanese goods to 15% and exempt expanding chipmakers.
U.S. initial jobless claims fell by 9,000 to 198,000 for the week ending January 10th, contrary to forecasts of 215,000, marking the second-lowest in two years. Continuing claims decreased by 19,000 to 1,884,000, meeting expectations. Federal employee claims increased by 170 to 646 amid the government shutdown.
Germany's GDP rose 0.2% in 2025, following a 0.5% drop in 2024, driven by increased household consumption and government spending. Exports declined due to US tariffs and competition. Manufacturing saw losses, especially in automotive, and construction faced high costs. Services showed mixed results, with support from trade and transport.
The NY Empire State Manufacturing Index increased to 7.7 in 2026, up from December's -3.7, exceeding expectations. In January, new orders and shipments rose, while employment and the average workweek decreased. Input prices stayed high, but selling prices slowed. Capital spending grew for the third month, and firms were optimistic about future conditions.
Macro calendar highlights (times in GMT)
0700 – Germany Dec CPI
1415 – US Dec Industrial Production
Fed speakers: Collins (1550), Bowman (1600), and Jefferson (2030)
Earnings events
Today: Reliance Industries, PNC Financial, State Street
Next Week
Tuesday: Netflix, Interactive Brokers, 3M
Wednesday: Johnson & Johnson, Charles Schwab
Thursday: Visa, LVMH, SK Hynix, Procter & Gamble, GE Aerospace, Intel, Abbott Laboratories, Intuitive Surgical, KLA Tencor, Capital One Financial, Freeport McMoRan, CSX Corporation
Friday: SLB
For all macro, earnings, and dividend events check Saxo’s calendar.
Equities
USA: The S&P 500 rose 0.3% to 6,944.5, the Nasdaq added 0.3% to 23,530.0, and the Dow climbed 0.6% to 49,442.4. Taiwan Semiconductor’s U.S.-listed shares jumped 4.4% after an upbeat outlook and a bigger 2026 capital spending plan, lifting the AI supply chain, while Applied Materials rose 5.7% as investors leaned into chip equipment again. Financials also helped: Morgan Stanley gained 5.8% on a profit beat tied to stronger dealmaking, and BlackRock advanced 5.9% after reporting record assets under management. Focus turns to the next earnings wave and fresh inflation signals.
Europe: European equities extended gains as the STOXX 600 rose 0.5% to 614.6, the Euro Stoxx 50 added 0.6% to 6,041.1, and the DAX climbed 0.3% to 25,352.4. Chip-linked names led after Taiwan Semiconductor’s update, with ASML up 6%, while financials also ran as Schroders surged 9.8% after lifting its profit outlook and Partners Group rose 7.7% after strong new assets. Investors also digested signs of modest German growth, while geopolitical headlines around Iran and Greenland stayed in view. Attention shifts to the next batch of European results and moves in bond yields.
Asia: Asian markets were mixed as Japan’s Nikkei 225 slipped 0.4% to 54,110.0 and China’s Shanghai Composite eased 0.3% to 4,112.6, while Hong Kong’s Hang Seng fell 0.3% to 26,923.6 and the Hang Seng Tech index dropped 1.4% to 5,828.4. Tighter margin requirements cooled risk appetite, and Trip.com sank around 19% after an antitrust probe, with Alibaba down 2.1% and Kuaishou off 2.9% as tech led declines. China Hongqiao also fell 1.2% as the session turned risk-off. Investors now watch for follow-through from Beijing and any policy tone shifts ahead of Lunar New Year travel.
Volatility
Market volatility remains contained going into the end of the week. The VIX ($15.84 | -5.43%) eased further on Thursday and short-dated volatility measures also stayed low, suggesting investors are not actively paying for near-term protection. Equity markets continue to grind higher, but the calm surface hides a growing sensitivity to headlines rather than data.
The main swing factors are political and geopolitical. US Federal Reserve chair Jerome Powell confirmed the existence of Department of Justice subpoenas, keeping questions around policy credibility and institutional independence in focus. At the same time, tensions in the Middle East appear to have cooled somewhat, easing pressure on energy markets. Today’s macro calendar is light, with final German inflation data unlikely to move markets unless it surprises.
From an options perspective, pricing implies a relatively modest move for the S&P 500. The expected move for today’s expiry is around ±32 points, or roughly ±0.5%. Looking specifically at today’s expiration, option pricing shows a near-balanced market with a slight upside tilt, as calls are marginally more expensive than puts around current index levels.
Digital Assets
Digital assets are consolidating after a strong mid-week recovery. Bitcoin has drifted back toward the $95,000 area after briefly trading near $97,000, while ether is holding around $3,300. Major altcoins are mixed but relatively stable, with solana near $143 and xrp around $2.08, broadly reflecting a cautious risk tone rather than outright selling pressure.
ETF performance mirrors that cooling sentiment. IBIT and ETHA both traded lower, underperforming spot prices as investors turned more selective after recent inflows. The pause appears driven less by price action and more by policy uncertainty. In the US, lawmakers postponed discussion of a closely watched crypto market-structure bill following public opposition from Coinbase, tempering earlier optimism around regulatory clarity.
Longer term, institutional infrastructure developments continue in the background. The launch of a tokenised settlement platform by the London Stock Exchange Group highlights how traditional finance is still building toward deeper integration with digital assets, even as near-term sentiment fluctuates.
Fixed Income
Japan’s government bonds sold off, with the 2-year and 10-year JGB benchmark yields back higher and near the highs for the cycle.
US treasury yields nudged very slightly higher as the US treasury market seems to be in hibernation.
US high yield corporate bonds are in demand as the Bloomberg measure of the high yield to US treasury yield spread we track tightened to match its lowest level since 2007 at 253 basis points.
Commodities
The now rebalanced Bloomberg Commodity Index is heading for a weekly gain of around 1%, with gains in precious metals and energy offsetting losses across agriculture, and end of week softness across industrial metals. At the individual level, silver is once again doing the heavy lifting with a 14% gain, followed by diesel at 2.7% and gold at 2.5%, while losses are led by cocoa (-7%), corn (-6%), and sugar (-2.1%). After a roller-coaster week, the energy sector is up 1%, supported by natural gas and refined fuel products.
Oil softened further, down 4.5% over the past two days after the US said it would hold off on attacking Iran for now, reducing the risk of a major supply disruption from the Middle East. The US is nevertheless continuing to build its military presence in the region, for now underpinning a residual geopolitical risk premium. Brent trades near USD 63.50 after briefly spiking toward USD 67 on Wednesday.
Silver continues to attract speculative interest, increasingly from both buyers and sellers, resulting in erratic price swings and challenging trading conditions. Tightness in the physical market is showing tentative signs of easing, with silver flowing from COMEX-monitored warehouses back toward Europe, while emerging stress among industrial users struggling with elevated prices may eventually help stabilise the market. Demand from Chinese speculators, however, remains strong, with Shanghai prices trading close to USD 10 above London.
HG copper has slumped to USD 5.85 after hitting a fresh record high of USD 6.15 earlier in the week, as Chinese regulators move to curb high-frequency trading in an effort to cool speculative interest. The clampdown follows signs that the rally has begun to weigh on physical demand in China, the world’s largest copper consumer.
Currencies
The Japanese yen edged out a slightly firmer US dollar and has been the strongest currency over the last 24 hours, as USDJPY pushed lower toward the locally pivotal 158.00 area in Asia’s Friday session before bouncing to 158.40+, while EURJPY traded below 184.00 Friday in Asia, rejecting the recent sequence above 185.00 in which the all-time high for the currency pair was posted at 185.57.
EURUSD and GBPUSD were pushed to local lows as EURUSD traded below 1.1600 on Thursday for the first time since early December and is nearing its 200-day moving average, currently near 1.1589. GBPUSD hit its lowest level for the year below 1.3400 on Thursday and bottomed out at 1.3363 before consolidating. This took the price below the pair’s 200-day moving average at 1.3406.
