Market drivers and catalysts
Equities: US up on steady Fed; Alphabet drops sharply; BMW gains despite weak earnings; UK pauses rally
Volatility: VIX declines; markets calm post-Fed; subdued ahead of Trump’s trade dea
Digital assets: Bitcoin near $100k; altcoins gain; crypto sentiment aligned with equity optimism
Fixed Income: US treasury yields steady post-Fed, Japanese government bond yields rise on weak auction
Currencies: USD firms as Fed indicates no rush to cut
Commodities: Gold holds below USD 3400, Copper softness as NY premium drops
Macro events: UK, Sweden and Norway central bank decisions, US jobless claims, US 30-yr bond auction
Macro data and headlines
Trump’s Big News Conference” today is expected to be the announcement of a trade deal with Britain, and if correct if would be the first deal announced since Trump imposed tariffs on America’s major trading partners.
The Trump administration plans to revoke Biden-era AI chip restrictions, potentially easing global semiconductor trade rules. The AI diffusion rule that was set for May 15 and aimed at limiting China's access to AI chip technology, will not be enforced, according to unnamed sources referred to in major news media. The Trump administration is said to be working on new rules related to access to high-end chips.
The Fed held rates at 4.25%–4.50%, cautious about tariffs impacting inflation and growth. Policymakers noted rising uncertainty and risks of both higher unemployment and inflation. Fed Chair Powell said there's no rush to change rates, and the Fed will monitor data, noting solid economic activity despite export fluctuations.
The Manheim Used Vehicle Value Index for the US rose by 2.7% month-on-month in April 2025, marking its first increase in three months and the largest since July 2024, following the early April tariff announcement.
US mortgage applications increased by 11% in the week ending May 2nd, reversing three weeks of declines due to falling mortgage rates. New home purchase and refinancing applications both rose by 11%, with Veterans Affairs loans up 26%.
Macro calendar highlights (times in GMT)
0600 – Ger March Industrial production
0730 – Sweden Riksbank Rate Decision
0800 – Norway Norges Bank Rate Decision
1100 – Bank of England Rate Decision
1230 – US Weekly Initial Jobless Claims & Continuing Claims
1430 – EIA's Weekly Natural Gas Storage Change
1500 – NY Fed 1-year Inflation Expectations
1700 – US Treasury to Sell USD 25 Billion 30-year Bonds
Earnings events
Today: Toyota, Shopify, ConocoPhillips, Nintendo, McKesson, Enel, Rheinmetall, Siemens Energy, Monster Beverage, Coinbase, Infineon, Cloudflare
Friday: Enbridge
For all macro, earnings, and dividend events check Saxo’s calendar.
Equities
US: US stocks rose Wednesday, buoyed by the Federal Reserve’s decision to maintain interest rates at 4.25%-4.5%, though caution persists on inflation and unemployment risks. The S&P 500 (+0.4%), Nasdaq (+0.3%), and Dow (+0.7%) gained as markets anticipated President Trump's major trade deal announcement, expected with the UK. Nvidia surged (+3.1%) on potential easing of chip restrictions, Disney spiked (+10.8%) after upbeat earnings, while Alphabet dropped sharply (-7.5%) amid Apple's AI search considerations. Futures signal continued strength Thursday morning.
Europe: European markets closed lower Wednesday, with STOXX 50 (-0.63%) and STOXX 600 (-0.54%) declining as investors awaited clearer signals from the Fed’s policy outlook. BMW (+2%) rose despite reporting weaker Q1 earnings, whereas Siemens Healthineers (-1.7%) fell on disappointing guidance. EU markets remain wary of potential tariff escalations, as the EU prepares retaliatory tariffs on US goods if trade negotiations falter.
UK: The FTSE 100 ended a record-breaking rally, falling 0.44% Wednesday amid profit-taking and declines in pharma giants AstraZeneca (-2.5%) and GSK (-4.9%). Investors await Thursday's Bank of England decision, with expectations of a 25-basis-point rate cut to 4.25%. Meanwhile, optimism surrounds ongoing US-UK trade negotiations, which could ease tariff pressures.
Asia: Asian equities gained modestly Thursday on optimism around US-China trade talks and potential easing of US export restrictions on advanced AI chips. Hong Kong’s Hang Seng (+0.8%) extended its winning streak, while Japan’s Nikkei (+0.4%) and China’s CSI 300 (+0.4%) also rose. Regional sentiment, however, remains cautious given ongoing geopolitical tensions between India and Pakistan.
Volatility
Volatility eased further Wednesday, with VIX declining to 23.55 (-4.89%) reflecting calmer market conditions post-Fed announcement. Futures (VX1 at 23.00) continued downward early Thursday (-1.39%), signaling a subdued risk environment ahead of President Trump’s anticipated trade deal announcement.
Digital Assets
Crypto assets rose, driven by renewed trade optimism, with Bitcoin approaching the critical $100,000 mark (+1.88% to $98,850) and Ethereum surging (+5.15%). XRP (+2.21%) and Solana (+2.08%) followed suit. Crypto sentiment appears closely tied to broader equity market optimism ahead of upcoming US-China trade talks.
Fixed Income
US treasury yields are almost unchanged from the levels that trade prior to the FOMC meeting late yesterday as the outlook for the US economy remains murky.
10-yearJapanese government bond yields rose sharply from near session lows by some five basis points as an auction of 10-year JGB’s saw the weakest bidding metrics since 2021.
- The Bloomberg High Yield spread to US treasuries indicator we track tightened one basis point to 356 basis points, which is five basis points above the one-month lows.
Commodities
Crude prices rose after falling in the previous session after the Federal Open Market Committee (FOMC) issued a murky outlook for the US economy. Traders continue to focus on US trade talks with China this weekend as Trump moves closer to a deal with the UK. Meanwhile, the Energy Information Administration (EIA) reported a second weekly drop in US stockpiles.
Gold is once again consolidating, having failed to hold above USD 3,400 after the FOMC said it was in no hurry to lower rates while also warning about the risk of higher unemployment and inflation from Trump’s tariffs. Traders are still betting on three gold-supportive rate cuts this year.
High-grade copper futures in New York trade softer as the premium over London shrinks to 8.5%, down from a recent peak at 15%, with traders pondering what tariff level the US administration will settle for following an ongoing investigation. Demand in China, meanwhile, remains strong while stranded stocks in the US continue to swell, leaving the rest of the world with a tightening supply outlook.
Currencies
The US dollar firmed in part on an FOMC meeting that raised concerns for stagflationary outcomes for the US economy (higher unemployment and inflation), although short-term rates were hardly affected by the FOMC meeting or Fed Chair Powell press conference.
The USD may also be higher on anticipation of a UK-US trade deal that is apparently set to be announced by the White House later today. This would be the first country of note to agree to a deal with the US since Trump announced the Liberation Day tariffs back on April 2. Sterling has firmed on this development, with a possibly pivotal Bank of England meeting up later today, where guidance for the next meeting will be closely watched.
Sweden’s Riksbank and Norway’s Norges Bank are both set to announce rate decisions (no changes expected) this morning and more importantly, will likely indicate their forecasts for the policy rate.
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