Market drivers and catalysts
Equities: US trading paused for Presidents' Day, Europe inched higher on financials, Asia mixed as Japan slipped and Hong Kong rose
Volatility: Fed minutes and core PCE in focus, short-term protection bid remains elevated
Digital Assets: Consolidation in BTC/ETH, mixed IBIT and ETHA flows signal selective positioning rather than broad risk-on
Fixed Income: Powerful rally in Japan’s government debt on strong 5-year JGB auction. US 10-year treasury yield eyeing big 4.00% level.
Currencies: Japanese yen rally resumes. USD slightly firmer outside USDJPY
Commodities: Lunar New Year lull sending gold, silver, and copper lower
Macro events: UK Employment Data, Germany Feb. ZEW Survey, US Feb. Empire Manufacturing
Macro headlines
US equity futures slumped as the US is back from a three-day holiday today. The focus recently has been on the weakness in large cap tech companies as the Nasdaq 100 futures at one point in early European trading hours Tuesday were 0.77% lower from Friday’s close, while the S&P 500 futures were off -0.43%.
An auction of 5-year Japanese government bonds saw rising demand for the first time since September, helping JGB yields fall sharply on the session and prompting a rally in the Japanese yen.
The strong demand for Japanese government debt may have prompted some of the weakness in the safe haven appeal of gold Tuesday in Asia, with trading in precious metals also impacted by the long Chinese Lunar New Year holiday all this week and through next Monday.
Australia’s RBA minutes outlined the “material” shift in the bank’s outlook for inflation and whether rates were restrictive enough relative to financial conditions, although this was already in the price and while the meeting earlier this month brought a rate hike, there is no commitment to future policy tightening. Australia’s short interest rates fell and the Australian dollar weakened slightly against other major currencies Tuesday.
Macro calendar highlights (times in GMT)
China’s markets are closed for Lunar New Year through Monday, 23 February.
0700 – UK Jan. Claimant Count Rate, Jan. Jobless Claims Change
0700 – UK Dec. Employment Change, Dec. ILO Unemployment Rate
1000 – Germany Feb. ZEW Survey
1315 – US Weekly ADP Employment Change (4-week average through Jan 31)
1330 – Canada Jan. CPI
1330 – US Feb. Empire Manufacturing
1500 – US Feb. NAHB Housing Market Index
0100 – New Zealand RBNZ Official Cash Rate
Earnings this week
Today: 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: closed.
Europe: European stocks ended mixed on Monday, with the Stoxx 600 up 0.1% at 618.52 as financials rebounded, while the Euro Stoxx 50 slipped 0.1% to 5,978.88 and Germany’s DAX fell 0.5% to 24,800.88. In London, the FTSE 100 rose 0.3% to 10,473.69 as banks and defence names led, even as tech and luxury lagged. NatWest climbed 4.7% after announcing a £1 billion buyback, Ørsted gained 4.5% on an upgrade, and BAE Systems rose 3.1% on higher defence-spend talk, while Dassault Systèmes dropped 10.4% after softer revenue and cloud-growth signals. Focus now turns to a busy earnings week, including Airbus, Orange, and Zealand Pharma.
Asia: Asia traded with a holiday hangover: Japan’s Nikkei 225 slipped 0.2% to 56,806.41 and the Topix fell 0.8% to 3,787.38 after a weaker Q4 growth print, while Australia’s S&P/ASX 200 rose 0.2% to 8,937.10. In Hong Kong’s Lunar New Year eve half-day, the Hang Seng gained 0.5% to 26,705.94, with mainland China already closed for the week. Nitori jumped 8.4% after an upbeat outlook and a 5-for-1 stock split, while Olympus sank 13.2% after cutting full-year profit guidance. In thin trade, Zijin Mining climbed 4.7% and CNOOC rose 3.7% as commodities helped, and investors now wait for markets to reopen and for any fresh policy support signals.
Volatility
US markets reopen after the Presidents’ Day holiday with volatility essentially carried over from Friday. The VIX closed at 20.60, while very short-term volatility (VIX1D at 22.43) remains elevated relative to VIX9D at 18.77. This pattern suggests investors are cautious about near-term catalysts rather than positioning for a broader market shock.
The focus this week is clearly macro-driven. Wednesday’s FOMC minutes and Friday’s core PCE inflation data, the Federal Reserve’s preferred gauge, could shift expectations around rate cuts. Durable goods data and flash PMIs later in the week may add further swings in sentiment. For longer-term investors, the path of inflation and bond yields remains the anchor for equity valuations.
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: today’s 0DTE options still show higher implied volatility in downside puts versus comparable upside calls. In practical terms, investors continue to pay a premium for protection rather than aggressively chasing upside exposure.
Digital Assets
Crypto markets are consolidating after recent gains. Bitcoin is trading around the USD 68,000–69,000 area, while Ethereum is near USD 1,950–2,000. Solana and XRP are holding relatively stable but lack clear upside momentum. The broader tone is one of consolidation rather than capitulation.
ETF flows remain selective. In the latest reported session (13 February), total US spot Bitcoin ETF flows were positive overall, yet IBIT recorded net outflows. The same pattern was visible in Ethereum ETFs: aggregate flows were positive, but ETHA saw outflows. This split suggests investors are reallocating within the space rather than expressing broad new risk appetite.
Crypto-related equities such as Coinbase and MicroStrategy have shown relative resilience compared to spot tokens, indicating that equity investors may be positioning for medium-term recovery even as token prices trade sideways.
For investors, the key question this week is whether macro stability, particularly around Fed communication and inflation data, can reignite consistent ETF inflows. Without that, digital assets are likely to remain range-bound rather than enter a sustained trend.
Fixed Income
Japan’s government bonds rallied sharply Tuesday as an auction of five year JGB’s saw strong demand. The entire yield curve dropped in a bull flattening move, with the benchmark 2-year JGB yield falling four basis points to a more than two-week low of 1.23%, while the benchmark 10-year yield plunged more than eight basis points to a new five week low of 2.13%.
US Treasuries did not trade on Monday due to a US holiday, but found additional support after Friday’s strong rally as trading opened Tuesday in the Asian session, with the benchmark two-year treasury yield dropping another two basis points and eyeing the lowest intraday level since 2022 of 3.374%, trading 3.38%. The 10-year dropped over two basis points to 4.022%, eyeing the huge 4.00% level, below which it has not posted a weekly closing level since late 2024.
Commodities
Gold and silver trade sharply lower amid muted activity, with much of Asia closed for the Lunar New Year. The move highlights the importance of Asian — and especially Chinese — demand, which helped propel prices higher in recent months. While geo-political tensions in the Middle East have failed to boost prices, sharply lower JGB yields today amid reduced rate hike focus also weighed on prices in Asia. Also, some caution has also emerged around the dollar after a Bank of America survey showed fund managers holding their most bearish dollar stance in a decade, raising the risk of a counter-trend rebound.
Gold has so far found support near USD 4,860, ahead of the next level at USD 4,670. In silver, two lower highs during the latest corrective rebound point to fading conviction and may signal additional short-term weakness.
Copper continues to slide, with the HG contract trading near USD 5.70 and heading for a potentially weakest close of the year. The decline is being driven by long liquidation amid a continued surge in exchange-monitored stockpiles, which have reached one million tons for the first time since 2003. While copper’s long-term price outlook remains supported by the energy transition, prices are unlikely to rally sustainably until the supply-demand balance begins to tighten. Market focus is now shifting to post-Lunar New Year activity in China.
Crude oil trades steady, with Brent hovering near USD 68 for a second day as traders focus on geopolitical developments ahead of renewed US-Iran talks in Geneva today. 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 bounced back in Asia’s Tuesday’s session as global risk sentiment was on the defensive and with the benchmark US 10-year Treasury yield slipping more than two basis points lower to 4.03% and the spread between US and Japanese government bond yields has recently narrowed to the tightest level since early 2022. USDJPY traded back below 153.00 in Tokyo on Tuesday after a high of 153.76, while EURJPY dropped to a low of 181.03 after a high of 182.18.
The USD edged slightly higher outside of the drop in USDJPY as weak risk sentiment weighed. EURUSD eased below 1.1850, while GBPUSD dropped to 1.3610 after a high Monday of 1.3662.
- New Zealand’s RBNZ is set to announce its policy rate early Wednesday, but little drama is expected as there are no expectations for a policy shift from the central bank for the coming several meetings.
