Key points
Equities: US mixed, Amazon down after earnings, Europe at record highs, Asia undecided
Volatility: VIX -1.71%, VIX1D +42%, jobs report in focus
Digital Assets: BTC struggles below $100K, crypto stocks down
Currencies: JPY rose to new local highs before easing back overnight.
Commodities: Gold headed for 6th consecutive week up, oil set for third weekly drop
Fixed Income: Japanese yields rise to new highs on strong consumer spending data. UK gilt yields rebound after dip on BoE.
Macro events: US January jobs report, Canada January employment data, US Preliminary Feb. University of Michigan sentiment survey
The Saxo Quick Take is a short, distilled opinion on financial markets with references to key news and events.
Macro data and headlines
The Bank of England cut the policy rate 25 basis points yesterday to bring it to 4.50% and chopped the growth outlook for the UK economy this year. Two voters dissented in favour of a 50-basis point cut to the policy rate. One hawkish dissenter called for no change. The Bank predicted inflation would rise more quickly in the near term than previously, but maintained long term guidance on inflation falling to target.
US Treasury Secretary Scott Bessent said that the US maintains a strong US dollar policy. He said he had a “constructive” meeting with Fed Chair Powell and that he won’t comment on Fed policy, after noting the previous day that the Trump administration will focus on keeping the US 10-year yield low. A report on treasury issuance plans declared that the Treasury will not increase the issuance of coupon bonds and floating-rate-notes from previous levels “for at least the next several quarters.”
Macro events (times in GMT)
Canada Jan. Employment Data (1330), US Jan. Nonfarm Payrolls Change (1330), US Jan. Unemployment Rate (1330), US Feb. Preliminary University of Michigan Sentiment (1550)
Earnings events
Next Week: Hermes, Coca-Cola, Cisco Systems, Nestle, McDonalds, Siemens, S&P Global, Shopify, Applied Materials, Unilever, Sony, EssilorLuxottia, Applovin, Deere & Company, Vertex, Palo Alto Networks, Softbank, AirBnB, DoorDash, Coinbase, Adyen, Robinhood, Siemens Energy
For all macro, earnings, and dividend events check Saxo’s calendar.
Equities
US: US markets had a mixed close on Thursday as investors processed corporate earnings and economic data. The S&P 500 gained 0.36%, while the Nasdaq 100 added 0.54%, marking a three-day winning streak. The Dow fell 0.28%, pressured by a 5.5% drop in Honeywell after weak guidance and restructuring plans. Amazon slipped 4% post-market despite solid earnings, as concerns over cloud capacity constraints weighed on sentiment. Qualcomm (-3.8%) and Arm (-3.4%) declined, while Philip Morris surged 10.9% on strong earnings. Investors remain focused on today's key Nonfarm Payrolls report, which could shape the Fed’s next policy moves.
Europe: European equities closed at fresh highs, with the STOXX 600 (+1.3%) and STOXX 40 (+1.7%) benefiting from upbeat earnings and easing bond yields. The DAX (+1.5%) hit a record 21,913, supported by BASF (+7%) and Siemens Healthineers (+6.1%). CAC 40 (+1.5%) climbed to an eight-month high, fueled by Societe Generale (+13.2%) and ArcelorMittal (+13.3%). Defense stocks retreated as rumors of a Ukraine peace plan gained traction, weighing on Saab, Rheinmetall, and BAE Systems. The Bank of England’s dovish stance further boosted UK stocks. Investors are watching central bank signals and corporate earnings for continued momentum.
Asia: Asian markets had a mixed session. Hong Kong’s Hang Seng (+0.8%) hit a two-month high, lifted by US futures and China’s AI boom. Lenovo (+7.5%), Xiaomi (+4.8%), and Li Auto (+4.4%) led gains. India’s RBI cut rates by 25bps for the first time in five years, keeping the Nifty 50 flat. China’s Shanghai Composite (+0.8%) defied regional trends despite new US tariffs, driven by AI optimism. Japan’s Nikkei (-0.5%) and South Korea’s KOSPI (-0.3%) fell as global risk appetite remained subdued. Investors await China’s CPI data and potential trade de-escalation talks with the US.
Volatility
The VIX closed at 15.50 (-1.71%), reflecting lower volatility despite uncertainty ahead of the Nonfarm Payrolls report. However, the VIX1D spiked 42% to 15.75, signaling short-term caution. VIX futures rose slightly (+0.43%) to 16.65, indicating some hedging ahead of the data release. Market sentiment remains cautiously optimistic, with S&P 500 and Nasdaq futures slightly in the red (-0.16%, -0.15%). If the jobs report surprises, volatility could spike, particularly in tech and rate-sensitive sectors.
Digital Assets
Bitcoin (+0.43%) climbed to $96,980 but remains below the critical $100,000 level, facing resistance at $98,000. Crypto stocks like Coinbase (-1.73%), MicroStrategy (-3.34%), and Riot Blockchain (-1.11%) fell, tracking weak market sentiment. Solana (+0.66%) and Cardano are attempting a recovery, while XRP (-0.50%) struggles. Despite selling pressure, multiple resistance tests suggest a potential breakout in Bitcoin. Traders are eyeing macroeconomic data for risk sentiment cues.
Fixed Income
US Treasury yields traded sideways ahead of the January jobs report later today, with the chief focus on the 10-year benchmark yield after it dipped below the critical 4.50% level earlier this week, trading near 4.45% this morning.
- Japanese government bond yield rose to close at new highs for the cycle for both the 2-year and 10 year benchmarks, with the former nearly reaching 80 basis points on the close and the latter nearly 1.3%. The strongest household spending data since 2022 overnight added pressure on JGB's.
UK yields rebounded sharply after a large dip on the initial impression of a dovish Bank of England meeting as the two dovish dissenters and the weak expectations for growth that hit the headlines initially were countered with rhetoric on concerns that inflation will pick up momentum in the near term before falling later. THe UK 10-year gilt closed at 4.49% after a 4.38% low.
Commodities
Gold (+0.31%) rose to $2,885, heading for its sixth consecutive weekly gain amid trade war fears and central bank easing. Oil remains under pressure, with Brent crude (+0.51%) at $74.67, set for a third weekly decline due to Trump’s tariffs on China and rising US inventories. Natural gas (-0.47%) dipped despite colder weather forecasts. Defense-related commodities, such as rare metals, could see volatility if Ukraine peace talks gain traction. The market remains cautious as geopolitical tensions and rate decisions drive price action.
Currencies
The Japanese yen rose further yesterday on the recent softness in US yields, with USDJPY trading just south of 151.00 overnight on the lows in the Asian session before bouncing sharply. EURJPY managed 156.75 before bouncing back toward 157.50 overnight.
- US Treasury Secretary Bessent’s comments on the US maintaining its strong dollar policy saw no market reaction as the US dollar rebound was modest yesterday ahead of today’s January US jobs report.
SEK and NOK have both strengthened sharply against the Euro in recent days, with SEK getting a boost on far stronger than expected January CPI numbers.
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