Market drivers and catalysts
Equities: US ended mixed as Intel sank, Europe edged lower on sportswear warnings, while Asia rose on chips and steady policy
Volatility: VIX remains subdued, but rising short-dated measures and mild downside skew reflect caution
Digital assets: Bitcoin and ethereum stabilise, IBIT and ETHA outflows continue
Fixed Income: Japanese government bonds mostly steady amidst profound yen moves, US treasury yields push lower
Currencies: Massive yen rally Friday as signs of coordinated intervention. USDJPY selling weakens USD broadly.
Commodities: Silver extends parabolic run toward USD 110; gold above USD 5,000; U.S. gas surges
Macro events: Germany IFO, US Treasury to auction 2-year notes
Macro headlines
Sharp yen rally after US Fed appears to be coordinating intervention with Japan. Friday saw a steep and brutal rally in the Japanese yen after the Fed “checked” the rate for USD/JPY late Friday. This seemed an official recognition that JPY weakness has extended too far. USDJPY tumbled from highs above 159.00 to close Friday below 156.00 and followed through on Monday in Asia to trade below 154.00 at one point. More below in Currencies
Senate Republicans plan to reject Democratic demands to split off Department of Homeland Security funding from a broader spending bill needed to avert a partial government shutdown. Democrats, led by Chuck Schumer, have vowed to block the package unless DHS funding is removed, raising the risk of a shutdown affecting multiple agencies from Jan. 31. The standoff has intensified after the fatal shooting of 37-year-old by a U.S. Border Patrol agent in Minneapolis during protests.
Over the weekend, President Xi Jinping removed his top general Zhang Youxia amid allegations of corruption, while China’s military accused him of undermining the command authority of the President, suggesting that the power of the Chinese leader is behind the probe, one of the biggest in decades.
Macro calendar highlights (times in GMT)
0900 – Germany Jan. IFO Business Climate Survey.
1330 – US Nov. Chicago Fed National Activity Index
1330 – US Nov. Preliminary Durable Goods Orders
1800 – US Treasury to auction USD 69 billion 2-year notes
0030 – Australia Dec. NAB Business Confidence Survey
Earnings events
Today: Ryanair, Nucor
Tuesday: LVMH, UnitedHealth, Boeing, RTX, NextEra Energy, Texas Instruments, Union Pacific, HCA Healthcare, General Motors, UPS, Seagate, Northrop Grumman, Atlas Copco
Wednesday: Microsoft, Meta, Tesla, ASML, Lam Research, IBM, Amphenol, GE Vernova, AT&T, Danaher, ServiceNow, Starbucks, General Dynamics
Thursday: Apple, Samsung, Visa, Mastercard, Roche, SK Hynix, Caterpillar, SAP, ThermoFisher Scientific, KLA Corp, Blackstone, Southern Copper, ABB, Lockheed Martin
Friday: ExxonMobil, Cheveron, American Express, Verizon, Regeneron
For all macro, earnings, and dividend events check Saxo’s calendar.
Equities
USA: The Dow fell 0.6% to 49,098.71, the S&P 500 was flat, and the Nasdaq rose 0.3% to 23,501.24 as investors weighed Intel’s outlook against lingering tariff noise. Intel sank 17.0% after a weak revenue forecast and comments that supply constraints limited its server-chip sales into artificial intelligence data centres. Microsoft added 3.3% as investors rotated back into mega-cap tech ahead of next week’s packed results calendar, while Nvidia rose 1.5% after a report that Chinese buyers could prepare orders for its H200 chips. Capital One slid 7.6% after missing profit expectations and announcing a deal for fintech Brex, keeping financials on the defensive into the week ahead.
Europe: Europe’s STOXX 600 and the Euro STOXX 50 eased 0.1%, while the FTSE 100 dipped 0.1% to 10,143.44 and Germany’s DAX rose 0.2% to 24,900.71. Sportswear dragged after profit warnings, with Puma plunging 14.1% after cutting guidance and Adidas dropping 5.8% on a cautious outlook. Telecoms provided a lift as Ericsson jumped 10.5% after a profit beat, while BASF fell almost 1.0% after weaker preliminary 2025 numbers revived margin worries. The next test is whether upcoming bank and industrial results confirm that demand holds up despite higher rates and political noise.
Asia: Japan’s Nikkei rose 0.3% to 53,846.87 and the Topix added 0.4% to 3,629.70 after the Bank of Japan kept policy steady, while South Korea’s Kospi gained 0.8% to 4,990.07. Hong Kong’s Hang Seng advanced 0.5% to 26,749.51 and China’s Shanghai Composite added 0.3% to 4,136.16 as investors leaned into the chip theme. SK Hynix climbed 1.6% on strength in artificial intelligence-linked memory demand, while Samsung Electronics slipped 0.1% on profit taking near the 5,000 milestone. In Taiwan, Taiwan Semiconductor Manufacturing Company rose 0.6% and MediaTek surged 10.0% as investors chased the next wave of custom-chip demand.
Volatility
Market volatility remains contained on the surface, but the tone underneath is more cautious than calm. The VIX closed last week just above 16, while short-dated measures moved higher, signalling that investors are increasingly alert to near-term event risk rather than complacent. This week’s main focus is the Federal Reserve meeting on 27–28 January, where markets will scrutinise Powell’s communication for any shift in the rate path, especially as political pressure around future Fed leadership continues to simmer. Beyond the Fed, investors are also watching US fiscal discussions, geopolitical tensions in the Middle East, and a heavy earnings calendar dominated by mega-cap technology.
Implied SPX move: ±99 points (±1.44%) into Friday’s 30 January expiry.
A look at this week’s options chain shows mild downside skew, with puts priced slightly richer than calls around current levels, a sign that investors are still paying up for protection even as equities hover near highs.
Digital Assets
Digital assets stabilised after recent volatility, with bitcoin trading around $87,900 and ethereum near $2,890, while major altcoins such as solana and xrp also edged higher. Price action remains choppy rather than trending, reflecting a market that is still sensitive to macro headlines rather than driven by crypto-specific enthusiasm. For investors, the more important signal continues to come from ETF flows, which remain mixed ahead of the Fed meeting.
On the latest available data, spot bitcoin ETFs recorded net outflows, led by IBIT, while ethereum ETFs also saw net redemptions, with ETHA the largest contributor. These flows suggest investors are trimming exposure or staying cautious rather than adding aggressively at current levels. At the same time, broader crypto-related equities and infrastructure names continue to attract selective interest, pointing to a “stay involved, but manage risk” mindset rather than a full risk-off move. If macro conditions stabilise and ETF flows turn positive again, digital assets could re-engage with broader risk markets, but for now, participation looks measured.
Fixed Income
Japan’s government bond yields rose at the front end of the curve to new cycle highs as the market brough forward anticipated BoJ policy tightening, while longer yields were steady amidst intense volatility in the Japanese currency. The benchmark 2-year yield rose almost two basis points to 1.27%.
US treasuries found support Friday, with the benchmark 2-year treasury yield easing back further away from the recent highs above 3.60%, trading 3.586% in Asian hours Monday. The benchmark 10-year treasury yield also retreated, erasing more of last week’s spike above the key 4.20% level that had capped the action from September. After closing Friday at 4.23%, the yield retreated Monday to 4.21%
Commodities
Silver’s parabolic rally extended into Asian trading, with XAG jumping toward USD 110, and up 50% this month, while gold broke above USD 5,000 for the first time ever, reaching an intraday high of USD 5,093 to trade up 18% on the month. While gold remains the ultimate hedge against inflation, fiscal debt concerns, and geopolitical risks, silver continues to be the main driver of the rally—fuelled by FOMO, strong momentum, limited liquidity, and robust Chinese demand, where local prices command a USD 14 premium over London. Platinum also pushed to a fresh high above USD 2,900, a 39% month-to-date gain, with its relative value versus silver falling to a record low.
U.S. natural gas futures surged above USD 6 for the first time since 2022, nearly doubling over the past week as freezing weather swept across large parts of the U.S., temporarily knocking out an estimated 10% of production just as demand spiked. Pipeline deliveries to LNG export plants fell to a one-year low as operators curtailed activity ahead of the storm. Whether this disruption spills over into higher prices in Europe and Asia will depend on the extent of any lasting freeze-related damage.
- Oil edged higher toward its January peak near USD 67, supported by heightened risks of U.S. military action involving Iran and a surge in diesel prices as the U.S. winter storm lifted demand. Offsetting these supportive factors, Kazakh exports from a key terminal have resumed, while U.S. refinery demand may temporarily ease as weather-related disruptions reduce operating activity during the storm.
Currencies
The JPY rallied steeply as noted above, first inspired by unknown factors in Asian hours after the Bank of Japan meeting, but following through strongly in the New York session after the New York Fed “checked” the USD/JPY rate, which observers will read as a sign that the US is happy to help Japan to push back against further weakening of its currency. This may be a key pillar to enable Japan to follow through with agreed US-bound investments agreed in US-Japan trade deal. After trading above 159.00 Friday, the Monday session in Asia saw USDJPY dropping below 154.00 at one point, below the 154.35 range low since late November. Other JPY crosses also came under heavy selling pressure.
The US dollar weakened broadly on the flood of USDJPY selling, with EURUSD rushing above 1.1800 Friday to close last week at 1.1834 and testing as high as 1.1898 on Monday before easing back. This was its highest level since mid-September, when the four-year high of 1.1919 was posted. AUDUSD rose clear of 0.6900 Monday, testing the late 2024 high of 0.6937 before pulling back. Australia reports its latest CPI data Wednesday, ahead of next Tuesday’s RBA meeting, in which a rate hike is seen somewhat more likely than not.
