Key points
Equities: AI stocks recover, Nvidia +5.2%, Alphabet -7.3%, AMD and Uber fall on weak guidance
Volatility: VIX drops to 15.77 (-8.37%), normalizing; AMD, Uber, Amazon see active options trading
Digital Assets: Bitcoin +1.59% to $98K, MicroStrategy -3.3% despite BTC expansion
Currencies: JPY firms again overnight on hawkish BoJ rhetoric.
Commodities: Gold retreats after new record high yesterday. Silver trades near resistance.
Fixed Income: US long yields plunge in bull flattening move. US 10-year benchmark below key 4.50%
Macro events: Bank of England Rate Announcement, US Weekly Jobless Claims
The Saxo Quick Take is a short, distilled opinion on financial markets with references to key news and events.
Macro data and headlines
The Trump administration is expected to present a plan to end the Russia-Ukraine war at the Munich Security Conference next week according to sources cited by Bloomberg.
- In the US, the ADP payrolls report revealed that private employers added 183,000 jobs in January, exceeding the expected 150,000 and surpassing December's 176,000. Job growth was robust in leisure and hospitality, but manufacturing showed weakness.
Treasury Secretary Scott Bessent says the Trump administration is focused on bringing down 10-year yields through lowering inflation and the fiscal deficit, rather than on the Fed’s policy rate. He aims to do this via expanding the energy supply and through the efforts of Elon Musk’s DOGE group.
The US trade deficit widened to $98.4 billion in Deemer, up from November's revised $78.9 billion and exceeding forecasts of $96.6 billion. This marks the largest deficit since March 2022, driven by a goods deficit increase to $123 billion and a reduced services surplus of $24.5 billion, as companies rushed to secure goods before new tariffs.
The US ISM Services survey fell to 52.8 from December's revised 54, below the 54.3 forecast, indicating slower services sector growth. Business activity and new orders saw smaller increases, while inventories contracted for the third month. However, employment and new export orders rose faster, and price pressures eased.
Macro events (times in GMT)
Eurozone Dec. Retail Sales (1000), UK Bank of England Rate Announcement (1200), US Jan. Challenger Job Cuts (1230), US Weekly Initial Jobless Claims (1330), Czechia Central Bank Rate Announcement (1330), Canada Jan. Ivey PMI (1500), Mexico Central Bank Rate Announcement (1900)
Earnings events
Today: Amazon.com, Eli Lilly, AstraZeneca, Linde, Philip Morris, L’Oreal, Honeywell, ConocoPhillips, Bristol-Myers Squibb
For all macro, earnings, and dividend events check Saxo’s calendar.
Equities
US: US stocks rebounded from early losses as declining Treasury yields and softer economic data boosted rate-cut expectations. The S&P 500 (+0.39%), Nasdaq (+0.19%), and Dow (+0.71%) ended higher, driven by AI-related gains in Nvidia (+5.2%) and Broadcom (+4.3%). Alphabet (-7.3%) plunged on disappointing cloud revenue, and AMD (-6.3%) slumped after weak data center guidance. Uber (-7.6%) also fell on soft forecasts. Futures indicate a positive open, with investors eyeing Amazon and Eli Lilly earnings. Meanwhile, initial jobless claims data today could impact sentiment, while trade war concerns persist as Trump signals no rush to negotiate with China.
Europe: European stocks reversed losses to close higher, with the Stoxx 50 (+0.1%) and Stoxx 600 (+0.4%) gaining on strong earnings. Santander (+7%) and GSK (+6%) surged, while TotalEnergies (+1.7%) outperformed despite a 21% drop in net income. The DAX (+0.2%) and CAC 40 (-0.2%) showed mixed performances as weak industrial production (-0.4% MoM) weighed on sentiment. Luxury stocks, including LVMH and L’Oréal, declined on China-related demand concerns. Swiss equities (+0.83%) also climbed, led by Valiant (+4.6%) after record results. The Bank of England’s rate decision today could drive market moves.
Asia: Asian markets saw mixed trading as AI optimism offset trade war fears. China's CSI 300 (+0.69%) and Shanghai Composite (+0.76%) rose, led by chipmakers after DeepSeek’s AI breakthrough. Hong Kong’s Hang Seng (+0.29%) gained, though earlier losses from China tariffs on US goods lingered. South Korea’s KOSPI (+0.57%) extended its rally, driven by SK Hynix (+1.61%) and Kakao (+3.94%). Japan’s Nikkei (+0.43%) edged higher, while US-China tensions remain a risk.
Volatility
The VIX dropped sharply to 15.77 (-8.37%), reflecting easing market fears. Short-term volatility indicators (VIX1D -26%, VIX9D -12%) signaled a return to normal levels. VIX futures (16.75, -0.12%) also declined. Equity futures suggest a calm session ahead, though jobless claims and major earnings, including Amazon, could drive movement. Options trading activity was strong in AMD, Alphabet, Uber, and Amazon, indicating heightened investor positioning.
Digital Assets
Bitcoin (+1.59%) hovered around $98,166, buoyed by Eric Trump’s bullish remarks on X. Ethereum (+1.86%) and Solana (+3.19%) also advanced, while XRP (+3.09%) gained. Crypto-linked stocks struggled, with MicroStrategy (-3.3%) posting a fourth consecutive loss despite growing BTC holdings. Coinbase (-1.87%) and mining stocks, including Riot (-4.48%), declined amid uncertainty over US-China trade tensions. Overall, crypto markets remained resilient despite macroeconomic pressures.
Fixed Income
US yields fell sharply yesterday in a bull flattening move as the 10-year and 30-year benchmark yields plunged on US Treasury Secretary Bessent’s comments noted above on the desire to bring down longer US treasury yields.
Japan’s 2-year JGB benchmark posted a new cycle high of 77 basis points even as 10-year JGB’s dipped a couple of basis points overnight on hawkish BoJ rhetoric.
Commodities
Gold peaked at an all-time high of 2,882 yesterday before dropping back, supported by traditional factors like a softer US dollar and lower US treasury yields. The major high near 2,790 will be the focus on any major consolidation.
Silver teased above key resistance at 32.33, but couldn’t maintain a move above that level yesterday, though copper prices are supportive for the dual-use silver, as copper rose to a new high for the year overnight, trading near USD 4.50 per pound this morning in Europe.
Crude oil benchmarks trade heavily near recent lows after a large build in US inventories reported yesterday.
Currencies
USDJPY aside, the US dollar pulled back from weakness yesterday on the fall in US treasury yields, as EURUSD fell back below 1.0400 in the Asian session after trading as high as 1.0442 yesterday and GBPUSD retreated back blow 1.2500 after testing 1.2550 yesterday.
The Swedish krone has suddenly come to life as EURSEK has dropped through the 11.40 range and has traded south of 11.35 yesterday, a multi-month low.
The JPY got a strong boost yesterday on the large drop in longer US treasury yields and pulled back higher again overnight after consolidation late yesterday on hawkish rhetoric from known BoJ hawk Naoki Tamura overnight, who said that the BoJ’s policy rate ought to be 1 percent by the second half of 2025 (versus the current 0.50%). USDJPY trades just below its 100-day and 200-day moving averages
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