Market drivers and catalysts
Equities: Sixth day of US gains; DAX hits 1-month high; FTSE extends winning streak
Volatility: VIX dips under 25; short-term vols mixed; Amazon options imply 7% move
Digital Assets: Bitcoin steady; altcoins mixed; MSTR +3.3%; XRP ETF decision delayed
Currencies: AUD gets a bump on stronger than expected CPI. USD and JPY firm ahead of key US data and BoJ tonight.
Fixed Income: US long treasury yields edge to new three-week lows
Commodities: Crude sees historic April selloff; Gold softer as China goes on holiday
Macro events: Germany Flash Apr. CPI, US Apr. ADP Employment Change, US Mar. PCE Inflation, Bank of Japan rate announcement
Macro data and headlines
- US President Trump criticized Fed Chair Powell once again late yesterday, saying he’s “not really doing a good job” and that he knows more about interest rates than the Fed Chair does.
Australia Q1 CPI out at 2.4% YoY vs. 2.3% expected and 2.4% in Q4. The Q1 Trimmed Mean CPI (core) was out at 2.9% YoY vs. 2.8% expected and an upward revised 3.3% (from 3.2% ) in Q4.
- As was flagged in the media the day before yesterday, US President Trump will sign three orders today to reduce tariffs on auto manufacturing, offering rebates for US-made cars and exempting imported parts from steel and aluminum tariffs.
Ahead of Amazon.com’s earnings after the close tomorrow, US press secretary Karoline Leavitt said that the company’s purported plan to display the impact on each product it sold from US tariff hikes amounted to a “hostile and political act”.
The US goods trade deficit hit a record $162 billion in March 2025, above the expected $146 billion, as firms increased imports due to tariff threats. Imports grew 5% monthly and 30.8% annually to $342.7 billion, led by consumer goods, industrial supplies, and capital goods.
China's factory activity has slipped into contraction, with the official manufacturing PMI index falling to 49 from 50.5 in March, suggesting early damage from Donald Trump's tariffs, which are expected to hurt a sector that contributed to nearly a third of the economy's growth last year. The downbeat indicators for factories followed an earlier warning sign for China’s exporters, with cargo shipments plunging possibly by as much as 60%, according to one estimate
Macro calendar highlights (times in GMT)
0645 – France Flash Apr. CPI
0755 – Germany Apr. Unemployment Change
0900 – Eurozone Q1 GDP Estimate
1200 – Germany Flash Apr. CPI
1215 – US Apr. ADP Employment Change
1230 – US Mar. PCE Inflation
1430 – US Weekly DoE Crude Oil and Product Inventories
0330-0430 – Bank of Japan Rate Announcement
Earnings events
Today: Microsoft, Meta Platforms, Samsung, Qualcomm, Caterpillar, Automatic Data Processing, TotalEnergies, Iberdrola, Banco Santander, UBS, Airbus Group, KLA Tencor, Mercedes Benz, Yum! Brands
Thursday: Apple, Amazon.com, Eli Lilly, Mastercard, McDonald’s, MicroStrategy, Airbnb, …
Friday: Exxon Mobil, Chevron, Eaton, …
For all macro, earnings, and dividend events check Saxo’s calendar.
Equities
US: US stocks extended their rally Tuesday, with the S&P 500 +0.58%, Dow +0.75%, and Nasdaq +0.55%, each logging a sixth straight gain—the longest streak since November. Honeywell (+5.4%) and Sherwin-Williams (+4.8%) led the Dow on earnings. General Motors fell 0.6% after pulling guidance due to tariffs, while Amazon stayed flat. Markets cheered tariff relief for US automakers and awaited today’s PCE and GDP data, as well as earnings from Meta and Microsoft. Futures ticked lower overnight, pressured by SMCI -15% after hours.
Europe: European markets ended mixed Tuesday. The STOXX 50 -0.5%, hit by Schneider Electric -6.6%, LVMH, Inditex, and Adidas declines tied to US tariff fears. Yet the STOXX 600 rose 0.4%, marking a six-day streak as HSBC (+3%) and Deutsche Bank (+5.5%) beat estimates. DAX +0.69% reached a one-month high led by Rheinmetall +8.5%. CAC 40 -0.24% lagged on Schneider, while Capgemini +5.7% outperformed. FTSE 100 +0.6% notched a 12-day winning streak, supported by Howden Joinery +4.6%, but BP -2.4% dragged on weaker earnings.
UK: The FTSE 100 +0.6%, extending its longest winning streak since 2017, closed at a multi-week high. Strength in banks (HSBC +2.6%) and industrials (Howden +4.6%) offset weakness in BP (-2.4%) and AB Foods (-9.2%). Investors weighed cautious economic data and a slate of Q1 earnings. The UK market trades at 12.4x trailing earnings with a 3.8% yield, while sentiment remains firm ahead of today’s earnings from Barclays and Glencore.
Asia: Asian equities were mixed Wednesday. Japan’s TOPIX +0.4%, while the Nikkei was flat after weak industrial output. Hong Kong’s Hang Seng +0.3%, helped by tech stocks despite China’s PMI falling to 49.0, signaling contraction. Tariffs weigh on sentiment, especially in China and Japan, where U.S. duties are disrupting exports and supply chains. South Korea’s KOSPI -0.14%, with LGES -3.1% despite a 138% profit jump. India’s Nifty -0.2%, pressured by Indo-Pak tensions. Australia’s ASX 200 +0.3%, buoyed by CPI data supporting rate cut hopes.
Volatility
The VIX -3.9% to 24.17, hitting its lowest close since Trump’s April tariff blitz. Short-term gauges diverged: VIX1D +3.6%, but VIX9D -5.7%, while VIX futures ticked higher. Lower volatility aligns with broad equity gains, though caution remains ahead of today’s PCE and GDP prints. Options traders are eyeing post-earnings moves, with Amazon’s straddle pricing in a 7% swing, making it the most attractive for volatility plays. Meta and Microsoft report tonight; straddles on both suggest a muted move unless surprises emerge.
Digital Assets
Bitcoin +0.7% to $94,941, stabilizing after a sharp April rebound (+15% MTD). Ethereum +0.5%, Solana +0.7%, while XRP +0.4% as traders brace for today's U.S. economic data. Crypto-linked stocks diverged: MSTR +3.3%, COIN +0.42%, while RIOT -2.75% and CLSK -1.5% declined. Sentiment was boosted by a judge ruling that Tornado Cash can’t be re-sanctioned, while the SEC delayed decisions on XRP and DOGE ETFs. Bitcoin ETFs saw inflows, but the rally is showing signs of fatigue as macro uncertainty persists.
Fixed Income
US Treasury yields edged lower yesterday, with the 10-year US Treasury benchmark closing the day at a three-week low of 4.17% ahead of US April ADP payrolls today, the April US ISM Manufacturing tomorrow and April US jobs report on Friday.
- Despite the positive close on Wall Street yesterday, US high yield credit spreads widened slightly, with the Bloomberg High Yield spread index to US treasuries we track closing up 2 basis points to 370 basis points.
Commodities
The Bloomberg Commodities Index is heading for a monthly loss of 4%, reducing the year-to-date gain to around 4.5%, led by a huge 15% loss in energy with crude oil and natural gas suffering steep declines, and together with a 4% drop in industrial metals, another pro-cyclical sector, these losses more than offset a 1% gain in agricultural commodities and a near 6% rally in gold.
- Gold trades softer ahead of China’s five-day Labour Day holiday, potentially signalling a temporary slowdown in demand, especially from China-based gold ETFs, which have been major drivers of demand in recent months. While a correction cannot be ruled out in the very short term, weak economic data from the US and China will likely continue to attract demand as the dollar and Treasury yields fall and rate cut hopes rise.
Crude prices are heading for a major April loss of more than 15% on growing signs Trump's trade war is hurting economic growth and energy demand at a time when OPEC+ is raising production. Developments that attract selling from macroeconomic-focused funds looking to hedge an economic downturn. WTI trading back below USD 60 will eventually challenge US production, and with that also the production of associated natural gas.
Currencies
Muted action in currency markets yesterday and overnight as the US dollar, Swiss franc and Japanese yen remained relatively firm against other major currencies.
The Australian dollar saw a solid boost on the stronger than expected Q1 headline and core inflation data overnight, with AUDUSD rising to 0.6410 by late Asian trading off lows yesterday of 0.6376, while AUDNZD rallied above 1.0800 for the first time in over two weeks.
Expectations for JPY volatility ahead of tonight’s (Wednesday in Asia) Bank of Japan meeting are muted as the Bank of Japan is only priced to deliver 17 basis points of tightening for the balance of this calendar year.
For a global look at markets – go to Inspiration.
