Market drivers and catalysts
Equities: Tech-led U.S. selloff, Europe slid on earnings drags, Asia firmer on China tech with Japan and Korea up
Volatility: Market on edge ahead of payrolls, sentiment defensive but upside skew hints at rebound hopes
Digital Assets: Crypto steadies after rough week; ETF flows mixed as investors stay cautious but engaged
Currencies: USD rebounds on weak risk sentiment, JPY rally attempt fades overnight
Commodities: Natural gas and diesel on top in a mixed week for commodities
Fixed Income: US Treasury yields reverse the prior day’s surge on weak risk sentiment
- Macro events: University of Michigan Sentiment
Macro headlines
US job cuts reached 153,074 in October, the month's highest since 2003, up from 54,064 in September. Major layoffs hit warehousing, tech, food, and government sectors due to AI adoption and rising costs. Year-to-date layoffs totalled 1,099,500, a 44% rise from 2024, mostly in government and tech sectors with 307,638 and 141,159 cuts.
The Bank of England's MPC voted 5–4 to keep the Bank Rate at 4% on 5 November, as expected. Four members favored a 25 bps cut. CPI inflation has peaked, and disinflation is aided by restrictive policy and softer pay growth. The subdued economy and labor slack reinforce disinflation. Risks to the 2% inflation target are more balanced, with future rate changes depending on data. Gradual rate reductions may occur if disinflation persists.
Euro Area retail sales fell by 0.10% month-on-month. Historically, retail sales have averaged a monthly change of 0.10% from 1995 to 2025, peaking at 19.30% in May 2020 and hitting a low of -11.30% in April 2020.
Norges Bank kept its policy rate at 4%, after a prior 25 basis-point cut, aligning with expectations. No changes in the economic outlook have occurred since September. Future rate cuts are possible if projections hold. Despite cooling the economy, inflation remains above target at 3%, with rising unemployment. A restrictive stance remains necessary to control inflation.
Switzerland's non-seasonally adjusted unemployment rate rose to 2.9% from 2.8%, the highest since March, with unemployed individuals increasing by 2,000 to 135,200. Youth unemployment fell to 3.1% from 3.2%, with 13,500 unemployed. Job vacancies decreased by 2,400 to 35,000. The seasonally adjusted jobless rate remained at 3.0%
Macro calendar highlights (times in GMT)
US Government data are impacted by shutdowns and are likely to be delayed
1330- US Nonfarm Payrolls and Unemployment Rate (NOTE: release remain doubtful)
1500 – US University of Michigan Sentiment
Earnings events
Today: Constellation Energy, KKR, Enbridge, Duke Energy, Mitsubishi Heavy Industries, Honda Motor
Next week: Monday: Sony, Coreweave |
Tuesday: Softbank | Wednesday: Cisco Systems, Hon Hai Precision, Infineon | Thursday: Siemens, Walt Disney, Applied Materials, Deutsche Telekom, Brookfield, Nu Holdings | Friday: Compagnie Financiere Richemont
For all macro, earnings, and dividend events check Saxo’s calendar.
Equities
USA: The S&P 500 fell 1.1%, the Nasdaq Composite 1.9%, and the Dow 0.8% as the AI cohort unwound while a data blackout from the U.S. shutdown kept official reads offline and private layoff gauges spiked. Semis led losses with AMD −7.3% and Nvidia −3.7% on valuation pressure, while software-AI name Palantir slid 6.8%. Tesla dropped 3.5% ahead of its shareholder vote, and mega-caps Microsoft −2.0% and Amazon −2.9% added weight. Focus turns to whether next week’s delayed macro prints and any Washington progress stabilize rate expectations.
Europe: The Euro Stoxx 50 lost 1.0% to 5,611 and the Stoxx 600 slipped 0.7% to 567.9, with the FTSE 100 down 0.4% to 9,735.8 as earnings set the tone. Diageo sank 6.5% after cutting guidance, while Maersk fell 5.3% post-results and Commerzbank eased about 2% on a profit miss. Offsetting, AstraZeneca rose 3.1% after a solid beat and reiterated targets. The tape stays headline-driven as guidance resets ripple through consumer and transport, while defensives with delivery on cash flows continue to cushion.
Asia: Hong Kong’s Hang Seng jumped 2.1% to 26,486 on hopes around China’s tech self-sufficiency push, with SMIC up 7.3% and Horizon Robotics up 3.5%, while Cathay Pacific gained about 4.0% following its stake-buyback news. Japan’s Nikkei 225 added roughly 1.4% and Korea’s Kospi climbed about 1.4% as chip and platform names tracked the rebound. Traders now watch China’s October trade and inflation prints for confirmation that policy tailwinds can carry into year-end.
Volatility
Volatility remains elevated heading into the US jobs report, with traders cautious after Thursday’s sell-off in tech and risk assets. The VIX rose 8.3% to 19.5, while short-term measures surged (VIX1D +22%, VIX9D +14%), reflecting nervous hedging into key macro data. Equity futures show mild stabilisation, but overall sentiment stays defensive. A strong payrolls print could pressure rate-cut expectations and extend the volatility bid, while a soft read may trigger relief across equities and bonds.
Expected SPX move for today’s expiry: ±51 points (±0.76%), derived from options pricing.
Skew check (0DTE): calls are priced slightly richer than puts near-the-money, indicating moderate upside bias as traders position for a late-session bounce rather than deeper downside risk.
Digital Assets
Crypto markets steadied after a volatile week but remain fragile amid the broader risk-off tone. Bitcoin trades near USD 102 000 (+0.5%) and Ethereum around USD 3 355 (+1.2%), modestly higher despite equity weakness. ETF flows remain a key gauge of sentiment: IBIT slipped 2.8% yesterday, while ETHA fell 4.1%, erasing midweek inflows.
Among crypto equities, Coinbase −7.5%, MicroStrategy −7.0%, and miners Riot and Marathon −6–8% tracked the sector’s drawdown. Broader market cap recovered slightly as investors weighed strong retail interest in crypto ETFs and fresh signs of institutional adoption, including Google’s integration of prediction market data into search results.
Fixed Income
US Treasury yields rallied on widespread weak sentiment yesterday, reversing out the prior day’s jump in bond yields, with the benchmark 2-year treasury yield now some six basis points lower near 3.56%. Likewise, the 10-year benchmark fell back about eight basis points yesterday to trade below 4.09%, trading 4.10% this morning in Europe.
US high yield corporate debt spreads see-sawed wider again yesterday, with the Bloomberg index we track of high yield spreads to US treasuries widening seven basis points to 294 basis points.
Commodities
The Bloomberg Commodity Total Return Index is heading for a fourth, albeit moderate, weekly gain. Sector performance remains uneven, particularly in energy where natural gas and fuel products posted strong advances while crude traded lower. A similar split appeared in grains and softs, with coffee, cocoa, and wheat rising, while sugar, cotton, and corn weakened. Precious metals continued to consolidate, with both gold and silver recording small gains.
Gold is holding near USD 4,000 after swiftly reversing early weakness during another soft session for US equities. Traders increased expectations for a December rate cut following weaker-than-expected US employment data (see above), a shift that may help insulate precious metals from the broader risk-off tone affecting equities and crypto markets. Key upside levels to monitor are USD 4,046 in gold and USD 49.30 in silver.
US natural gas futures jumped to an eight month high at $4.4, having traded below $3 just three weeks ago, supported by strong LNG exports, and after weather forecasts shifted colder, offsetting a weekly storage increase that was in line with estimates but below the five-year average.
Currencies
The Dollar Index slipped back below the key 100 level yesterday, closing the day at 99.73 before bouncing slightly in the overnight session. EURUSD peaked at 1.1552 yesterday before easing back lower, while USDJPY tested the local sub-153.00 support, posting a new one week low of 152.82 before bouncing back above 153.25 by afternoon Asian trading.
GBP steadied and firmed even as the Bank of England barely avoided cutting rates at its meeting yesterday and the market sharply raised odds of a December BoE meeting rate cut after the bank’s guidance, as the overall easing cycle trajectory was not adjusted significantly beyond the next couple of meetings. EURGBP retreated back below 0.8800 after the recent 0.8830 high, while GPBUSD surged above 1.3100, posting a 1.3143 high before easing back, after the 1.3010 low on Tuesday.
AUDNZD surged back well clear of 1.1500 as it set new highs since 2013, trading 1.1530 late in Sydney hours today.
