Market drivers and catalysts
Equities: US and Europe slipped on oil and tariff worries, while Asia rallied as chip stocks drove record highs
Volatility: Geopolitics and oil strength are pushing volatility higher, with hedging demand rising
Digital Assets: Bitcoin holds near USD 81k with Ether steady, while altcoins edge higher and ETF demand via IBIT and ETHA supports sentiment
Fixed Income: Global bond yields jump on the latest surge in crude oil prices. US Treasuries eyeing cycle highs
Currencies: USD firms on surge in crude oil prices. AUD weak after dovish RBA guidance relative to expectations
Commodities: Gold and silver on the defensive after surge in crude oil prices on fresh US-Iran confrontation in Persian Gulf
Macro events: US Mar. Trade Balance, US Apr ISM Services, US Mar. JOLTS Job Openings
Macro headlines
US and Iran exchanged fire in the Strait of Hormuz, undermining a four-week ceasefire. US forces said they repelled Iranian attacks while escorting two US-flagged ships, and the UAE reported intercepting missiles and a fire at its Fujairah oil terminal. Despite US plans to restore shipping, security risks may keep the route closed until a US–Iran deal, sustaining concern over energy prices.
Australia’s Reserve Bank hiked its policy rate for a third consecutive time Tuesday, taking the policy rate to 4.35% from 4.1% by a vote of 8-1 on the policy committee, with the dissenter looking for no change. Guidance at the Governor Bullock press conference suggested that the RBA now sees the policy rate as “a bit restrictive” and that hikes wouldn’t aid the fight against the inflation over the next six months. Short Australian yields fell sharply as the market read this guidance as far more dovish than expected – Australian two-year interest rate swaps fell seven basis points.
Australia’s services PMI was revised up to 50.7 in April from 50.3 and 46.3 in March, signaling modest growth. Activity and jobs increased, but domestic demand and new orders fell amid higher fuel costs from the Middle East war. Export orders recovered slightly. Input costs and selling prices rose at their fastest pace since 2022 and early 2023 respectively, while business sentiment stayed muted.
US factory orders rose 1.5% m/m in March 2026, beating the 0.5% forecast after a 0.3% gain in February. Durable orders were up 0.8%, led by a 3.6% jump in computers and electronics on strong AI and data-center demand, and higher transport equipment. Nondurable orders rose 2.1%, the highest since October 2022. Orders ex-transport were up 1.6%, ex-defense 0.9%.
Macro calendar highlights (times in GMT)
1230 – US Mar. Trade Balance
1400 – US Apr. ISM Services
1400 – US Mar. JOLTS Job Openings
2100 – New Zealand RBNZ Financial Stability Report
2245 – New Zealand Q1 Employment and Earnings Data
Earnings this week
Monday (yesterday): Palantir, Pinterest, ON Semiconductor, Tyson Foods, Norwegian Cruise Line, Vertex Pharmaceuticals, Diamondback Energy, Williams Companies.
Tuesday: AMD, Pfizer, PayPal, Shopify, Anheuser-Busch InBev, Cummins, Eaton, KKR.
Wednesday: Disney, Uber, Arm, DoorDash, CVS Health, Marriott, Novo Nordisk, Johnson Controls.
Thursday: Airbnb, McDonald’s, Canadian Natural Resources, AppLovin, Realty Income.
Friday: Wendy’s, Brookfield Asset Management, Enbridge.
For all macro, earnings, and dividend events check Saxo’s calendar.
Equities
USA: The S&P 500 fell 0.4% to 7,200.8 from record highs, while the Nasdaq dropped 0.2% to 25,067.8 and the Dow lost 1.1% to 48,941.9 as higher oil prices revived inflation worries. Energy was the only sector in green, while materials led the decline. eBay gained 5.1% after GameStop made a surprise USD 56 billion takeover bid, while GameStop fell 10.1% as investors questioned the deal math. Apple lost 1.2%, while UPS dropped 10.5% after Amazon’s logistics push raised competition fears. Palantir fell 2.7% even after raising its 2026 revenue outlook, with revenue growth accelerating 85%, its fastest pace since 2020, showing that strong numbers are not always enough when expectations are already high.
Europe: The Stoxx Europe 600 fell 1.0% to 605.51, while the Euro Stoxx 50 dropped 2.0% to 5,763.61 and Germany’s DAX declined 1.2% to 23,991.27 as oil prices rose on Strait of Hormuz tensions. Auto shares also came under pressure after President Trump’s renewed 25% tariff threat on European car imports. ASML fell 2.9% and weighed most on the Stoxx 600, while CSG dropped 13.1% after a disclosed short position hit sentiment. London was closed for the early May bank holiday, making Europe’s tape a little thinner than usual.
Asia: Asian stocks rallied to record highs, led by semiconductors, as investors rotated back into the region’s artificial intelligence supply chain. South Korea’s Kospi surged 5.1% to 6,936.99, helped by Samsung Electronics rising 5.4% and SK Hynix jumping 12.5% on renewed memory-chip optimism. Taiwan’s TWSE Index climbed 4.6% to a record high, with Taiwan Semiconductor Manufacturing up 6.6% in its strongest session in more than a year. Hong Kong also finished higher, while Japan, mainland China and Thailand were closed for holidays. Markets now watch whether the chip rally broadens or remains a very expensive group project.
Volatility
Volatility edged higher as geopolitical risk returned to focus, with the US–Iran ceasefire showing signs of strain and keeping oil prices elevated. The S&P 500 closed at 7,200.75 (-0.41%), while the VIX rose to 18.29 (+7.65%), pointing to a pickup in hedging demand rather than outright stress. For investors, the key risk is that sustained energy strength and potential disruption around the Strait of Hormuz could keep inflation expectations elevated, limiting central bank flexibility as markets move through a heavy data and earnings week. Today’s focus includes US ISM services and JOLTS job openings, both relevant for rate expectations.
- Based on SPX options pricing, the market is implying a move of about ±91 points (±1.27%) into Friday’s expiry, and around ±41 points (±0.56%) for today.
The 0DTE skew indicator shows puts still priced richer than calls near spot, signalling continued demand for downside protection.
Digital Assets
Crypto markets are holding firm despite a more fragile macro backdrop, suggesting continued support from institutional flows. Bitcoin is trading around USD 80,999 (+1.4%), while Ether is near USD 2,381 (+1.4%), both maintaining recent gains even as broader risk sentiment softens. Altcoins are modestly higher, with Solana (~USD 85), XRP (~USD 1.40), and Dogecoin (~USD 0.11) tracking the general risk tone rather than leading it.
Crypto-linked equities are outperforming, with Coinbase, MicroStrategy and Marathon Digital all advancing, reinforcing the view that equity proxies remain more reactive than spot crypto.
- ETF demand continues to provide a key anchor, with flows concentrated in IBIT for Bitcoin exposure and steady interest in ETHA for Ether.
At the same time, options flow points to a more cautious undertone, with hedging activity in crypto equities suggesting investors are protecting against near-term event risk. For longer-term investors, crypto remains supported, but still behaves as a risk asset when macro uncertainty rises.
Fixed Income
US treasury yields jumped on the latest surge in crude oil prices, with the benchmark 2-year treasury yield peaking just below the key 4.00% level before easing back to 3.95%, up over seven basis points from Friday’s closing levels. At the longer end of the yield curve, the benchmark US 10-year yield rose some seven basis points on the day Monday, closing just below 4.44% and therefore at the highest daily close since last July as traders eye the big round 4.50% level.
European yields jumped on the latest surge in crude oil prices, with the benchmark 2-year German Schatz yield closing Monday’s trade at 2.73%, which is near the cycle high posted intraday Friday at 2.77%, but up nine basis points from Friday’s much lower close at 2.64%. The benchmark German 10-year Bund yield rose less sharply, perhaps reflecting concerns that higher energy prices will drag on growth. It closed Monday up five basis points at 3.09%, two basis points shy of the cycle high closing level last Thursday.
- Japan’s markets are closed through Wednesday.
Commodities
Crude oil prices rocketed higher Monday as the US and Iran exchanged fire in the Persian Gulf as the US attempted to escort vessels through the Hormuz Strait. The UAE reported attempts to intercept a round of Iranian missiles and drones, the first launched against the country since the ceasefire starting April 8. One drone hit an oil terminal complex at the UAE’s Fujairah port, starting a fire. July Brent rose over USD 6 per barrel and briefly touched a new contract high above USD 115/bbl Monday before settling back below 113 in early trading Tuesday. June WTI trades near USD 104.50 early Tuesday, down from an intraday high Monday of 107.46.
Gold and silver prices dropped sharply on the latest spike in global bond yields, with spot gold almost eyeing the key USD 4,500 / oz. level late Monday before rebounding slightly to trade USD 4,536 early Tuesday, still down USD 80 / oz. from Friday’s closing level. Silver tumbled as low as USD 72.2 / oz. Monday after opening the day well above USD 75. If the selling pressure continues, traders will eye the local low just below USD 71.
Currencies
The US dollar firmed on the latest surge in crude oil prices from the US-Iran confrontation in the Hormuz Strait and Iran’s attempted and actual strikes against the UAE. The Dollar Index rose a bit less than 0.5% from Friday’s close by early Tuesday, held back by USDJPY (see below). The dollar index has posted a double low in April and now early May just below 98.00, now a key line in the sand. EURUSD retreated and closed below 1.1700 Monday, eyeing the recent three-week lows of 1.1655 if the selling continues.
The JPY generally avoided weakening (the expected direction with a fresh jump in crude oil prices and bond yields) as traders are wary of taking on Japan’s Ministry of Finance, which has shown its teeth in recent massive intervention efforts to support the JPY higher after stern verbal warnings on USDJPY crossing above 160.00. The high of the local range since the intervention began has been near 157.30, where USDJPY trades early Tuesday amidst a broader USD firming.
RBA: With the dovish guidance at the RBA press conference (see under Macro headlines above), the Australian dollar weakened sharply, with AUDUSD falling to below 0.7140 early Tuesday, adding to the decline from a strong USD on Monday, where AUDUSD started the week near 0.7200.
Elsewhere, AUDNZD tumbled over 30 pips from Monday’s close, trading near 1.2170 early Tuesday.
