Market drivers and catalysts
Equities: Tech-led U.S. pullback after Powell’s “highly valued” cue; Europe rose on firmer services PMIs and luxury; Asia mixed with Hong Kong lower into Ragasa
Volatility: Shutdown risk, Powell tone, Macro data ahead
Digital Assets: BTC stable, ETH holds, Tether eyes $500bn valuation
Fixed Income: US treasuries rally as risk sentiment sours.
Currencies: USD sideways. AUD broadly stronger.
Commodities: Platinum rejoins gold and silver’s record-breaking rallies
Macro events: Germany IFO, US New Home Sales & U.S. 5-year auction
Macro headlines
Fed Chair Powell said equity prices are "fairly highly valued," noting the challenge of balancing inflation with a weakening labor market. Fed officials Goolsbee and Bowman expressed caution, highlighting inflation risks and possible faster rate cuts if job losses rise.
The S&P Global US Composite PMI dropped to 53.6 in September 2025 from 54.6 in August, indicating slower growth but the strongest quarterly expansion since late 2024. Service activity slowed, manufacturing growth eased, and new orders, job creation, and work backlogs all faced challenges.
The S&P Global US Services PMI decreased to 53.9 in September 2025 from 54.5, meeting expectations and indicating the slowest growth since June. New orders saw minimal rise due to weak domestic demand, affecting job filling by service providers.
The US current account deficit shrank by $188.5 billion (42.9%) to $251.3 billion in Q2 2025, aligning with expectations. The goods deficit decreased as firms reduced imports, previously heightened to avoid new tariffs.
The OECD forecasts global growth to slow to 3.2% in 2025 and 2.9% in 2026, down from 3.3% in 2024, due to US tariffs. The 2025 outlook is 0.3 points higher than June's projection, indicating early-year resilience.
Sweden's central bank unexpectedly cut its rate by 25 basis points to 1.75% in September, aiming to boost the economy and control inflation. Despite growth prospects, the Riksbank cited risks from geopolitical tensions and uncertain US trade policy.
President Trump said NATO should shoot down Russian aircraft that violated their airspace, while expressing a sympathetic tone on Ukraine’s chances of winning the war with the support of the European Union.
China is pushing central banks in friendly nations to buy and store gold in the country via the Shanghai Gold Exchange (Source: Bloomberg) The move would boost Beijing’s role in global finance and support its push to reduce reliance on the dollar and Western hubs, as central banks step up gold buying to hedge against geopolitical and economic risks.
Macro calendar highlights (times in GMT)
0800 – Germany Sep. IFO Business Climate
1400 – US August New Home Sales
1430 – EIA's Weekly Crude and Fuel Stock Report
1700 – U.S. to sell USD 70 billion 5-year Notes
Earnings this week
Today: Cintas
Thu: Costco, Accenture, H&M Hennes & Mauritz,
For all macro, earnings, and dividend events check Saxo’s calendar.
Equities
USA: U.S. stocks faded as the S&P 500 fell 0.6%, Nasdaq 100 0.7%, and Dow 0.2% (−88 pts) after Chair Powell said equities look “fairly highly valued.” Nvidia slid 2.8% as its up-to-$100B OpenAI tie-up drew antitrust and power-supply scrutiny. Oracle dropped 4.4% as the prior leadership-change pop unwound, while Amazon lost 3.0% amid ongoing legal overhangs. Defensives steadied with Kenvue up 1.6%. Boeing rose 2.0% on Uzbekistan Airways’ order. Focus turns to regulatory headlines around the Nvidia-OpenAI deal and upcoming inflation prints.
Europe: Europe advanced as the STOXX 50 rose 0.6% and the STOXX 600 0.3%, with flash PMIs signaling the fastest euro-area activity in 16 months, led by services. Discretionary outperformed: LVMH +3.2%, L’Oréal +3.5%, Volkswagen +3.3%, and Stellantis +3.1%. Ørsted gained 4.0% after a U.S. court cleared work to resume on its Revolution Wind project. Index reshuffles also remained in view after Porsche AG’s demotion to the MDAX took effect this week.
Asia: Tone was mixed across the last full closes. Hang Seng fell 0.7% to 26,159, with Hang Seng Tech down 1.5%, as Hong Kong braced for Super Typhoon Ragasa and flights were curtailed. Mainland A-shares were softer (CSI 300 −0.1%). Australia’s ASX 200 rose 0.4% and Korea’s KOSPI gained 0.5%, while Japan was closed for the Autumnal Equinox holiday. Pharma lagged in Hong Kong with Sino Biopharm −4.5% and CSPC Pharma −4.7%.
Volatility
Volatility edged higher as investors balanced Fed rhetoric, looming U.S. shutdown risk, and today’s macro data. The VIX rose to 16.64 (+3.35%), with SPX dropping −0.55%, while VIX futures dipped slightly. Short-term vol signals like VIX1D and VIX9D spiked 5–6%, reflecting increased hedging demand into today’s New Home Sales and Crude Inventories. Despite these moves, vol remains relatively contained, supported by inflows into long-VIX ETFs (+$63M). As long as funding and policy risks don’t escalate, day-to-day swings may stay modest.
Expected SPX move today: ±70 points (~±1.0%), based on implied volatility in ATM options.
Digital Assets
Crypto markets are stabilizing after Monday’s sharp deleveraging. Bitcoin trades near $112.8K (+0.62%), while Ethereum holds at $4.18K (+0.25%). Altcoins are mixed, with XRP recovering above $2.85, but SOL lagging at $209.5 (−1.86%). ETF flows were subdued: IBIT and ETHA saw minor inflows (+$2.5m and +$0.8m), while total U.S. crypto ETF flows remained negative (−$245m combined for BTC and ETH). Macro drivers continue to dominate: policy cues from Fed speakers and shutdown expectations are steering direction more than on-chain trends.
Meanwhile, Tether is reportedly seeking up to $20 billion in funding, valuing the stablecoin issuer at $500 billion, rivalling the likes of SpaceX and OpenAI. This comes as liquidity clusters in BTC options pricing suggest a short-term magnet near $107K, keeping risk sentiment fragile.
Fixed Income
US treasury yields rolled over after the multi-day rise as risky assets posted a poor day yesterday. Still, weak demand was noted at yesterday’s auction of 2-year treasuries. The benchmark 2-year treasury yield trades this morning at 3.56% after the high yesterday of 3.61%. Similarly, the benchmark 10-year treasury yield is some five basis points lower from its 4.15% high, trading just below 4.10% in early European trading this morning.
US high yield credit spreads widened three basis points as risk appetite across equities was wobbly and US treasuries rallied. The Bloomberg high yield credit spread to US treasuries we track widened three basis points to 262 basis points yesterday after posting a low since February the prior day.
Commodities
Crude prices firmed after Trump escalated his rhetoric against Russia as well as China and India, the main buyers — and de facto funders — of the war. At the same time, Russia is weighing restrictions on diesel exports in response to Ukrainian strikes on its energy infrastructure. ICE gasoil futures jumped 2.4% on Tuesday, with any curbs threatening to further tighten global supplies just as winter demand builds.
- Precious metals notched another day of fresh highs, with gold touching our short-term technical target near USD 3,800, silver surging to a 14-year high at USD 44.46, and platinum breaking above USD 1,500, its strongest level in 11 years. The rally is being fueled by lower U.S. funding costs alongside a cocktail of investor concerns spanning overvalued equities, Fed independence, and mounting geopolitical risks.
Currencies
Low volatility across much of the currency market as the reversal in EURUSD refused after it tried new highs above 1.1900 around the FOMC meeting last week has not resulted in a follow through lower, as the price action remains bottled up near 1.1800 there, while USDJPY can’t find significant separation from 148.00.
A bit more volatility in some of the FX crosses, however, as EURSEK sold off on a “hawkish cut” yesterday from Sweden’s Riksbank as the central bank declared itself finished with its easing cycle for now. Still, the sell-off below 11.00 failed to hold and EURSEK trades 11.025 after a 10.971 low yesterday. Elsewhere, EURGBP is trying toward the top of its range of the year north of 0.8725, while AUDNZD tested above 1.1300 briefly overnight, its highest level since late 2022 after Sweden’s Riksbank Deputy Governor Anna Breman was named head of the RBNZ.
