Market drivers and catalysts
Equities: US finished mixed after the Fed, Europe fell on luxury earnings, while Asia rallied on Hong Kong and AI headlines.
Volatility: Fed “uncertainty elevated”, vix1d jump, oil on iran risk
Digital Assets: BTC/ETH softer, IBIT selective inflows, macro-driven sentiment
Fixed Income: JGB yields quiet Thursday, Long US treasuries under pressure as USD weakens.
Currencies: USD weakens after volatility around Bessent comments on strong USD policy. NOK and AUD strongest among G10 FX.
Commodities: Explosive push higher with gold, silver and copper hitting fresh record highs, while Brent trades near USD 70.
Macro events: US Weekly Initial Jobless Claims, US Nov. Trade Balance, Japan Jan. Tokyo CPI
Macro headlines
The Fed maintained rates at 3.5%–3.75% in its meeting for January 2026 after last year's cuts. Governors Miran and Waller wanted a 25bps cut instead. Economic growth is steady, with low job gains and stable unemployment amid high inflation. The Fed will monitor data for future rate changes. Chair Powell stated current rates support goals as the economy enters 2026 strongly.
US Treasury Secretary Bessent pushed back against notion that Trump administration is pursuing a weaker US dollar, stressing the preference for a strong dollar and denying involvement in Japan's markets. Earlier, the dollar hit 2022 lows due to speculation and Trump's indifference. Tariff threats and shutdown fears contributed to the "sell America" trade.
Bessent said there's no trade deal with South Korea until ratification and criticized the EU for freezing the deal during Trump's Davos speech. A South Korean adviser warned of possible US tariff hikes over future investment disagreements.
Macro calendar highlights (times in GMT)
0830 – Sweden Riksbank Rate Decision
1000- Eurozone January Consumer Confidence
1330 - US Weekly Initial Jobless Claims and Continuing Claims
1330 – US November Trade Balance
1500 – US Nov. Factory Orders
1530 – EIA Natural Gas Storage Change
1800 – US Treasury to auction 7-year notes
2330 – Japan Jan. Tokyo CPI
2330 – Japan Dec. Jobless Rate / Retail Sales
2350 – Japan Flash Dec. Industrial production
Earnings events
Today: 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 S&P 500 finished flat at 6,978.03 after briefly topping 7,000, the Dow edged up 0.0% to 49,015.60, and the Nasdaq Composite rose 0.2% to 23,857.45 as the Fed held rates unchanged. Semiconductors led as Texas Instruments jumped 9.9% on a stronger outlook tied to data-centre demand, lifting Micron 6.1% and Intel 11.0%. AT&T rose 4.7% after results and an upbeat profit view, while investors weighed how fast artificial intelligence investment turns into profits. After the bell, Microsoft fell 6.1% as capital spending jumped, Meta climbed almost 7.0% on strong advertising and steadier capex, and Tesla gained 1.9% despite softer profit as investors looked past cars toward its robot narrative, with markets now watching Apple and the next inflation print.
Europe: European equities slid as weak luxury earnings and a bank headline outweighed earlier tech strength. The Euro Stoxx 50 fell 1.0% to 5,933.06 and the Stoxx 600 dropped 0.7% to 608.51. LVMH sank 7.9% after a cautious tone, Hermès fell 3.8% in sympathy, and ASML ended 1.9% lower after giving back intraday gains despite strong orders, a reminder that ‘good’ still has to beat ‘great’. Deutsche Bank slipped 2.0% after police searches linked to a money-laundering probe, leaving investors focused on European bank results and spillovers from US mega-cap earnings.
Asia: Asia mostly advanced, led by Hong Kong, as a weaker dollar and fresh artificial intelligence headlines supported risk appetite. The Hang Seng surged 2.6% to 27,826.91, the Kospi gained 1.7% to 5,170.81 and Shanghai added 0.3% to 4,151.24, while Japan’s Nikkei was up 0.0% at 53,358.71 and the Topix fell 0.8% to 3,535.49. Reports of progress on approvals for Nvidia’s H200 chips helped sentiment, alongside a strong IPO debut. HSBC rose 2.2%, SMIC added 3.5%, China Hongqiao jumped 7.3%, and Busy Ming closed up 69.0% after raising HK$3.67 billion, with attention now turning to big US tech earnings and policy signals from Beijing.
Volatility
Market volatility remains contained on the surface, but short-dated stress has picked up. The VIX closed around 16.35, while VIX1D jumped sharply, signalling increased sensitivity to near-term headlines rather than broad fear. The Federal Reserve kept rates unchanged on 28 January and repeated that uncertainty around the outlook remains elevated, keeping markets reactive to incoming data and policy tone. Attention is also shifting back to geopolitics, with oil prices rising on renewed concerns around a potential US-Iran escalation, a factor that could spill into inflation expectations and risk sentiment if sustained.
Expected move (SPX, week): options are pricing roughly ±59 points (±0.85%) into 30 January, suggesting markets expect movement but not disorder.
Skew check (today’s expiry): downside protection remains more expensive than upside, with implied volatility on puts noticeably higher than comparable calls, pointing to cautious positioning rather than complacency.
Digital Assets
Digital assets are trading more like a macro barometer again. Bitcoin eased to around $88,200 and ether to roughly $2,950, while solana and xrp also softened, reflecting a modest risk-off tone rather than crypto-specific stress.
For investors, the clearer signal continues to come from spot ETFs. The latest reported data for 28 January showed IBIT recording a +$19.5m inflow, even as total US bitcoin ETF flows were negative on the day, suggesting selective accumulation rather than broad capitulation. ETHA posted a small +$0.8m inflow, consistent with a more cautious, wait-and-see stance in ethereum exposure.
Overall, crypto markets remain sensitive to rates, the dollar, and geopolitical headlines, with flows pointing to selective conviction rather than aggressive risk-taking.
Fixed Income
Japan’s government bond yields were almost unchanged after Wednesday’s drop in yields as Japan awaits January Tokyo CPI data tonight and awaits the outcome of the February 8 lower house election, which will determine whether PM Takaichi’s LDP party gains a controlling a majority in the house and the power to push through its supposedly more expansive fiscal agenda.
US treasury yield curve steepened very slightly, with the benchmark 2-year treasury yield remaining bogged down below the important 3.60% level after an indifferent FOMC meeting, trading 3.578% in early European hours Thursday, while the benchmark 10-year yield rose two basis points during the Asian session Thursday to above 4.26%, above its highest close for the last six sessions. The two-ten yield slope is a positive 69 basis points, some 3 basis points below its steepest levels for the cycle.
Commodities
An explosive rally across major commodities extended into Thursday’s Asian session. Copper surged 7% to fresh record highs; gold traded well above USD 5,500 after first clearing USD 5,000 on Monday, while silver hovered near USD 120. Crude oil continued to advance at a more measured pace, with Brent above USD 69, a four-month high, as Trump ramps up threats against Iran.
Overall, the rush into hard assets—led by precious metals and copper—continues to dominate headlines. The move is being fuelled by strong momentum, tight supply, market makers being reluctant to take and hold positions, leading to thinner liquidity and greater volatility, against a broader backdrop of investor flight from sovereign bonds amid fiscal and geopolitical concerns, alongside a persistently weaker dollar.
The copper rally is particularly notable, highlighting a growing disconnect between softening near-term fundamentals—especially in China, with rising global supply pushing the forward curve into contango—and an increasingly speculative investor frenzy seeking exposure to one of the most important transition metals.
The Bloomberg Commodity TR Index is up 15% month-to-date, with precious metals gaining 39%, industrial metals 11%, and energy 14.7%, while the agriculture sector remains broadly unchanged.
Currencies
A volatile twenty four hours for the US dollar, which ends on the weak side once again. After a sharp weakening move brought on by Trump comments shrugging off USD weakness on Tuesday, US Treasury Secretary Scott Bessent claimed that the US always maintains a strong US dollar policy and that it is “absolutely not” intervening in the USDJPY exchange rate. This pulled the USD sharply higher, with EURUSD testing the important 1.1900 area and USDJPY as high as 154.05 at one point. This was before the FOMC meeting, which brought little drama, allowing USD selling to re-emerge as USDJPY pushed back toward 153.00 in Asia’s Thursday session and EURUSD rose back short of 1.2000.
AUD continued to rally broadly, with AUDUSD hitting new highs since 2023 above 0.7090 while EURAUD pushed sharply lower, settling below 1.7000 by late in Asian trading hours Thursday. The next key for AUD is next Tuesday’s RBA meeting, where expectations are about 70% in favour of the first rate hike of a new cycle.
NOK continues to reprice aggressively higher on surging energy prices and after a government-appointed advisory panel asked Norway’s
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