Market drivers and catalysts
Equities: U.S. mixed at record levels as a 25bp Fed cut and QT halt met a hawkish Powell, Europe steady with UK firmer on earnings; Asia mixed.
Volatility: VIX steady near 16 as markets digest Fed cut and GDP data
Digital Assets: Bitcoin steady near $110k, Ether around $3.9k, IBIT and ETHA under mild pressure amid ETF outflows
Fixed Income: US Treasury yields jump on surprising Fed hawkishness
Currencies: JPY weak across board on dovish BoJ. USD rally on hawkish Fed fizzles.
Commodities: Gold and silver comeback falters. Soybeans sideways as China resumes buying.
Macro events: Germany flash Oct. CPI, ECB meeting
Macro headlines
President Trump said he had an “amazing meeting” with President Xi that produced a deal to halve fentanyl-related tariffs, resume Chinese soybean purchases, and suspend the rare-earths licensing regime for a year. He added that China would boost U.S. investments and curb precursor chemical flows linked to fentanyl production. The subsequent response from China confirmed much of what Trump said, as China announced a suspension of rare earth export controls for a year, on expanding agricultural trade and also on suspending countermeasures against US ships docking at Chinese ports.
The Federal Reserve cut the federal funds rate by 25 bps to 3.75%–4.00%, the lowest since 2022, due to employment risks and high inflation. Governor Miran preferred a 50bps cut; Kansas City Fed's Schmid dissented against the cut. Chair Powell said a December cut isn't certain, but investors expect another 25bps reduction. The Fed will stop reducing securities holdings (a.k.a., quantitative tightening) on December 1.
The Bank of Canada cut its benchmark rate by 25bps to 2.25% and may end cutting if the economic outlook remains stable. This follows a previous rate cut amid US tariffs and a slowing job market. Despite a 1.6% GDP contraction in Q2 due to trade conflicts, the BoC expects GDP to grow by 1.2% this year and 1.1% next year, with core inflation around 3% moving toward the target.
The Bank of Japan policy board left its benchmark interest rate unchanged at 0.5% in a vote that offered no new hints on when it might hike, with the next meeting not scheduled until 19 December.
Macro calendar highlights (times in GMT)
US Government data are impacted by shutdowns and are likely to be delayed
0900 – Euro Zone Oct Consumer Confidence
1000 – Euro Zone 3Q GDP
1230 – US 3Q GDP, Personal Consumption (delayed?)
1230 – US Weekly Initial Jobless Claims (delayed?)
1300 – Germany Oct CPI
1315 – ECB Rate Decision
1430 – EIA's Weekly Natural Gas Storage Change
Earnings events
Today: Apple, Amazon.com, Eli Lilly, Mastercard, Samsung, Merck, Shell, Gilead Sciences, Hitachi, S&P Global, Stryker, TotalEnergies, Comcast, Roblox, Coinbase
Fri: ExxonMobil, Abbvie, Chevron, Linde, Tokyo Electron
For all macro, earnings, and dividend events check Saxo’s calendar.
Equities
USA: The S&P 500 finished flat while the Nasdaq rose 0.5% to a record and the Dow slipped 0.2% as the Fed cut 25bp and flagged an end to balance-sheet runoff, then Powell cooled December-cut hopes and nudged yields up. Mega-cap chips led: Nvidia +3.0%, Broadcom +3.5%, AMD +2.6% and Micron +2.1%. Payments was the outlier, with Fiserv −44% after a deep guide cut and leadership changes. Post-close, Meta −7.4% on a $15.9bn one-off tax charge and Microsoft −4% as its OpenAI stake reduced earnings, while Alphabet +6.7% rallied on a beat.
Europe: The STOXX 50 was flat and the STOXX 600 edged −0.1%, but the FTSE 100 gained 0.6% as earnings did the lifting. Healthcare and autos outperformed: GSK jumped 6.6% after raising its outlook and Mercedes-Benz rose 4.4% on buyback/guide support, while banks found a bid with Deutsche Bank +5.0% on strong results. Laggards included SAP (−4.2%) and Adidas (−10.4%) after tariff-related headlines. Tone remains earnings-driven into today’s U.S. data spillover.
Asia: Mixed tape into policy and geopolitics. Japan’s Nikkei 225 +1.8% as AI hardware strength lifted benchmarks; China’s Shanghai Composite +0.7% as investors eyed the Xi–Trump meeting; Hong Kong was softer earlier this week (HSI −0.3% on Tuesday). Chip and energy-adjacent names led: Advantest +22.1% on AI test demand, while Sungrow +15.4% surged within renewables. SoftBank added 3.9% alongside tech momentum. Set-ups hinge on Fed signaling, the LPR path, and U.S.–China headlines.
Volatility
Today the market is operating in a moderate-risk environment: the SPX stayed roughly flat near 6,890 and the implied volatility gauge VIX remains in the mid‐teens (~16-17), signalling that while elevated risk is acknowledged, the panic phase is not in place. Key macro events also add a bit of pressure: this morning’s German GDP print and Europe’s central‐bank decision join the US Q3 advance GDP release – all of which can trigger sharper intraday swings.
Based on the near‐the‐money straddle pricing, the expected move for SPX today is roughly ±0.6% to ±0.7% (≈±45-50 points).
On the skew front: for today’s expiration there is a mild put skew around the 6,890 strike (puts a little richer than calls), while for the end-of‐week expiration the skew is near flat to slightly call-leaning, suggesting modest appetite for upside hedging.
Digital Assets
In crypto land things are a little quieter than in equities but not trivial. IBIT (the large‐cap bitcoin ETF proxy) stands at about $62.75 and shows net assets of ~US$89 billion, per latest fund figures. Its smaller sibling ETHA (ether exposure) has net assets around US$15.8 billion. Broadly speaking: Bitcoin is ~US$108k-110k territory and Ether ~US$3.9k (depending on feed) and altcoins such as Solana (~US$195) and XRP (~US$2.58) are holding in ranges.
Fixed Income
US treasury yields jumped on the indication from Fed Chair Powell in the FOMC press conference that a December rate cut was no foregone conclusion, surprising the market that had fully priced a 25-basis point cut. The entire yield curve lifted, with the benchmark 2-year yield up ten basis points to 3.59%, while the benchmark 10-year yield rose about nine basis points to 4.07%.
Japanese government bond yields were steady after some volatility around the Bank of Japan monetary policy statement, which gave few clues on the timing of any eventual rate hike. Bank of Japan governor Ueda is holding a press conference in late Tokyo hours as this is being written.
Commodities
The gold and silver comeback faltered yesterday, with Gold pushing back as low as 3,915 after yesterday’s high of 4,030, before rebounding to 3,970 area, with silver showing similar behaviour, trading 47.80 after a high yesterday of 48.45.
US soybean futures saw a volatile session overnight as US President Trump and Chinese president Xi met in South Korea, with both sides pointing to a resumption of Chinese soybean purchases. As of late Asian trading session, prices were actually lower, at 10.68/bushel after recent highs near 10.90.
Currencies
The US dollar chopped back and forth but is generally rangebound after an initial rally on what was read as a hawkish FOMC meeting, rather surprising given the significant spike in US yields. After EURUSD traded as low as 1.1578, it rebounded back above 1.1620 overnight.
USDJPY lifted back well above 153.00 on lack of guidance in the BoJ statement on its rate hiking intentions, with further JPY weakness as BoJ governor Ueda said he would like to see more on firms’ wage-setting amidst the US tariffs (the wage negotiations are mostly an annual exercise early in the year for implementation on April 1, suggesting that the BoJ might wait until spring for any further policy tightening.) He also said that he didn’t think that the risk of falling behind the curve is increasing.
