Market drivers and catalysts
Equities: U.S. eked out gains as bank jitters eased and tariff rhetoric softened. Europe fell on banks and defence. Asia slid into the weekend
Volatility: VIX retreats ~18%. Regional-bank stress fades. Earnings and CPI in focus
Digital assets: Bitcoin > USD 111k. ETH +1.9%. Geopolitical tone aids sentiment
Currencies: USD pulled back stronger Friday, mixed overnight
Commodities: Precious metals consolidate, so far above key support levels
Fixed Income: US 10-year treasury yield back above 4.00%, Japan’s yields surge as LDP-led coalition set to form a government this week.
Macro events: No economic data of note today
Macro headlines
China’s economy expanded at its slowest pace in a year during the third quarter, growing 4.8% from 5.2% in the previous period, highlighting the mounting challenges Beijing faces as it tries to navigate a global trade war while propping up domestic growth. Increasingly, China’s expansion is being driven by exports, which are helping offset a deepening slowdown in domestic demand.
China’s four-year property slump shows no sign of easing, with home prices falling more sharply in September despite fresh stimulus efforts by major cities to stabilise the market. The prolonged real estate weakness continues to sap confidence and is one of the key factors underpinning gold’s remarkable rally, as investors look for alternative stores of value amid persistent economic uncertainty.
Japan's LDP and Innovation Party have broadly reached an agreement, setting up Sanae Takaichi to become the country's first female prime minister. There is, however, no guarantee the new coalition will be stable, with some lawmakers expressing concern about the LDP’s ability to pursue its reform agenda.
Trump urged Zelenskiy to accept Putin’s terms or be destroyed by Russia, the FT reported. The Ukrainian leader told NBC the war should be frozen along current battle lines before peace talks, even as Putin insists on control of Donetsk.
Macro calendar highlights (times in GMT)
US Government data are impacted by shutdowns and are likely to be delayed
No economic data of note today
Earnings events
Tue: Netflix, GE Aerospace, Coca-cola, Philip Morris, RTX, Texas Instruments, Intuitive Surgical, Danaher Corporation, Capital One, Lockheed Martin, Chubb, Northrop Grumman, 3M, General Motors, Unicredit, Nasdaq
Wed: Tesla, SAP, IBM, Philip Morris
Thu: T-Mobile
Fri: Procter & Gamble
For all macro, earnings, and dividend events check Saxo’s calendar.
Equities
USA: S&P 500 +0.5%, Nasdaq 100 +0.5%, Dow +0.5% as regional-bank fears cooled and softer tariff talk steadied risk. Megacaps firmed with Apple +2.0% as tech sentiment improved, Nvidia +0.8% alongside a chip rebound, and Netflix +1.3% ahead of this week’s results. Focus now turns to Tesla and Netflix earnings and whether calm in regionals holds into macro prints.
Europe: Euro Stoxx 50 −0.8% and Stoxx 600 −1.0%, with FTSE 100 −0.9%, as banks and defence led declines after U.S. regional-bank headlines and geopolitical de-escalation signals. Barclays −5% tracked the sector slide, while Rheinmetall −6.4% faded with defence peers. Healthcare weakened as Novo Nordisk −6.4% on U.S. pricing worries weighed on the index. Watch bank earnings updates and tariff headlines for direction.
Asia: Prior local closes were weaker into the weekend: Nikkei 225 −1.4%, Hang Seng −2.5%, CSI 300 −2.3%. Tech and e-commerce led losses in Hong Kong, with Alibaba −4.2%, while chip names slumped as SMIC −6.5%. In Tokyo, exporters slipped with a firmer yen; Toyota −0.7% and semicap names eased. Attention shifts to today’s China policy signals and corporate guidance into Singles’ Day promotions.
Volatility
Market nerves eased sharply after last week’s spike. The VIX fell 17.9% to 20.8, while short-term measures such as the VIX1D (-24.7%) and VIX9D (-23.5%) showed traders pulling back from near-term hedges. The backdrop remains cautious, though, as investors brace for a dense week of earnings from Tesla, Netflix, IBM, and Coca-Cola, alongside U.S. inflation and housing data later in the week. Regional-bank stress has faded for now, helping volatility to normalise. Futures indicate stability with VIX1–3 months around 20–21, implying a steady but watchful market mood.
SPX expected move: options price a ±120-point (±1.8%) range for the week into Friday’s close, suggesting moderate swings ahead.
Digital Assets
Crypto rebounded as optimism returned to risk markets. Bitcoin rose 2.2% to around USD 111,000, while Ether gained nearly 1.9% to USD 4,060, lifted by renewed appetite following signs of thawing U.S.–China relations and Japan’s proposal to let banks hold digital assets. However, IBIT and ETHA both saw modest outflows, hinting that institutional flows remain defensive. Among altcoins, XRP and Solana outperformed, each up almost 3%.
The political spotlight—such as New York’s mayoral race featuring crypto-friendly rhetoric—continues to underscore digital assets’ growing mainstream relevance, even as traders stay sensitive to macro shifts.
Fixed Income
The safe haven flows of late last week reversed on Friday as US treasuries sold off, taking the benchmark 10-year treasury yield back above 4.00% after a low Friday of 3.93%.
- Likewise at the front end of the yield curve, the benchmark two-year yield rose to 3.47% by this morning after a Friday low of 3.37%.
US high yield credit spreads were steady by the close of trade on Friday after recent volatility, with the Bloomberg measure of high yield credit spreads to US treasuries ending the week a basis point higher from Thursday’s close at 293 bps.
Japan’s yields surged overnight on in the wake of the late Friday surge in US treasury yields, but also as a new LDP-led coalition looks set to form a new government under LDP’s Takaichi. The benchmark 2-year JGB yield rose four basis points to 0.95%.
Commodities
Brent crude extended its decline to a third straight weekly loss on Friday, before finding tentative support near the key USD 60 level. Sentiment has weakened on growing signs of an emerging supply glut, with crude held on tankers at sea climbing to its highest level since the pandemic. Ongoing trade tensions and slower Chinese growth have added further pressure, while speculative net long positions in Brent have been cut to a five-month low.
Gold, silver, and platinum all reversed sharply lower on Friday as broader risk appetite improved and recent strong Indian demand showed signs of easing with the start of Diwali. While a correction across precious metals has long been overdue, so far support remains firm well above USD 4,000 in gold and USD 50 in silver. Traders in silver continue to watch for a U.S. Section 232 tariff decision that could either ease or exacerbate the tightness in the London market.
Currencies
As risk appetite recovered on Friday, the US dollar rallied from local lows, with EURUSD trading 1.1675 this morning off the overnight lows of 1.1652 after a high Friday as high as 1.1728.
USDJPY trades 150.65 this morning after an overnight high of 151.20 and a low on Friday of 149.38 as Japan appears set for a new coalition government headed by the newly elected LDP leader Takaichi.
