Market Quick Take - 19 February 2025

Market Quick Take – 19 February 2025

Key points

• Equities: S&P 500 sets new record; Intel surges; Bumble & Arista drop after hours
• Volatility: VIX near 15; volatility tempered
• Digital Assets: BTC dips; Solana’s LIBRA fallout; HK expands crypto offerings
• Currencies: JPY strengthens again overnight. NZD firmer after RBNZ guides for smaller cuts from here.
• Commodities: Surging gas prices, gold near record and rising crop prices
• Fixed Income: US 10-year benchmark topped out at 4.56% before retreating
• Macro events: US Jan. Housing Starts and Building Permits, US 20-year Treasury Auction, US FOMC Minutes

The Saxo Quick Take is a short, distilled opinion on financial markets with references to key news and events.

Macro data and headlines

• UK Jan. CPI out this morning at -0.1% MoM and +3.0% YoY vs. -0.3%/+2.8% expected, respectively, with the core YoY Services CPI out at 5.0% vs. 5.1% expected.
• US and Russian high-level delegates met in Riyadh to discuss Ukraine. Russian Foreign Minister Lavrov described the talks as "not unsuccessful." Ukrainian President Zelensky postponed his Saudi Arabia visit to March 10th, reportedly to avoid legitimizing the meeting
• Chinese stocks saw a $1 trillion rally, driven by advances in AI and after President Xi Jinping held a meeting with private companies, including Alibaba, Meituan, Xiaomi Corp, and BYD Co, urging entrepreneurs to stay competitive and confident in China’s future. This meeting by Xi himself sends a strong signal on China’s commitment to boost the economy.
• Trade tensions remain top of traders' minds after Trump threatened to impose tariffs at around 25% on semiconductor, automobile, and pharmaceutical imports from as early as 2 April.
• The Fed’s January minutes, due today, may show the FOMC probably further discussed the concerns created by Trump’s proposed policy changes, with a bias toward upside inflation risks

Macro calendar highlights (times in GMT)

• 0700 – UK Jan CPI & PPI
• 1330 – US Jan Housing Starts
• 1800 – US 20-year Treasury Auction
• 1900 – FOMC Minutes from 29 Jan Meeting
• 1910 – New Zealand RBNZ’s Orr to speak before parliament
• 2200 – Fed's Jefferson Speaks
• 0030 – Australia Jan. Employment Data

Earnings events

• Today: Rio Tinto, Analog Devices, HSBC, Carvana, Glencore, Vale, Garmin, Toast
• Thursday: Walmart, Booking Holdings, Airbus, Schneider Electric, Mercedes Benz, Mercado Libre, Nu Holdings, Block, Lloyds, Cheniere, Targa Resources, Fortescue, Cameco, Sprouts Farmers Market
• Friday: Constellation Energy, Standard Chartered

For all macro, earnings, and dividend events check Saxo’s calendar.

Equities

• US: The S&P 500 rose 0.24% Tuesday to a new record close of 6,129.58, its second of 2025, while the Dow and Nasdaq remained nearly flat. Intel surged 16% on speculation that TSMC and Broadcom could break up the chip giant, boosting sector sentiment. Super Micro Computer jumped 16.5% as delisting fears eased. On the downside, Bumble sank 17% in after-hours trading after weak guidance, and Arista Networks fell 5% in after-hours despite solid earnings. Traders weighed ongoing Fed policy signals, potential Ukraine peace talks, and President Trump’s new tariff threats on autos, semiconductors, and pharmaceuticals.
• Europe: European markets pushed higher Tuesday, with Germany’s DAX hitting 22,863 (+0.3%), supported by hopes of increased defense spending for Ukraine. US-Russia talks in Riyadh, described as “positive,” raised optimism for an end to the conflict, potentially paving the way for a Trump-Putin meeting. Commerzbank led gains (+1.9%), trailed by Daimler Truck (+1.7%) and Airbus (+1.6%). France’s CAC 40 advanced to a nine-month high above 8,220, with defense firm Thales up 2.6%. However, Capgemini plunged nearly 9% on weaker sales, and Zalando and Rheinmetall slipped slightly on profit-taking.
• Asia: Asian trading was mixed Wednesday as Trump’s threat to impose 25% tariffs on autos and semiconductors weighed on sentiment. Hong Kong’s Hang Seng slid 0.3% to 22,908, relinquishing part of Tuesday’s strong tech-driven gains. China’s main benchmarks climbed on optimism over artificial intelligence and Beijing’s pledges to support private enterprise. South Korea’s KOSPI soared 1.7%, extending its recent rally amid strong chip stocks, with Samsung Electronics and SK Hynix both rising over 2%. Japan’s Nikkei lost 0.4% as caution grew over further US trade policy shifts.

Volatility

The VIX hovered near 15.35 (-0.13%) on Tuesday, indicating muted market anxiety despite fresh tariff threats. Short-term measures like VIX1D (-21.24%) signaled calmer immediate expectations, while traders monitored pending Fed minutes for policy clues. Large VIX call spreads drew attention, suggesting hedging strategies remain in play. BofA strategists advised using VIX upside overlays to protect equity positions. Meanwhile, subdued moves in bond markets and stable corporate earnings tempered volatility, as participants continued to watch macro developments—including possible Ukraine peace efforts and shifting global trade dynamics.

Digital Assets

Bitcoin hovered near $95,570 (-0.09%), its lowest in weeks, while Ethereum rose 1% to $2,699. Solana extended its decline (-0.8%) amid ongoing fallout from the LIBRA meme token scandal tied to Argentine President Milei. Coinbase slipped 3.5%, and MicroStrategy eased 1.1% after reporting no additional Bitcoin purchases. Hong Kong regulators signaled support for expanded crypto trading products, underscoring the city’s ambition to become a regional digital assets hub. Traders remained wary of further U.S. tariffs and regulatory moves, with sentiment also shaped by persistent volatility in smaller altcoins.

Fixed Income

• US yields edged back higher yesterday, with the 10-year benchmark trading as high as 4.56% before settling slightly lower overnight, with 2-year yields still locked up mid-range of the last three months near 4.3% ahead of today’s FOMC minutes.
• Japanese government bond yields edged higher still on the continuing bear steepening move, with the 10-year JGB benchmark hitting nearly 1.45% overnight before easing back.

Commodities

• The commodities sector extended its recent strong run of gains with the BCOM TR index reaching a 29-months high, supported by broad strength, not least surging natural gas prices amid a fresh spike in US winter demand, as well as ongoing demand for precious metals and key agricultural products.
• Crude prices extended gains amid signs that OPEC+ is considering delaying further production hikes, and uncertainty around Russian oil flows as G7 consider tightening the oil price cap on Russian exports.
• Gold trades near record highs, supported by continued haven demand due to tariff threats and an elevated level of geopolitical uncertainty. Silver has so far managed to keep up with gold’s rally despite the lack of central bank demand which gold enjoys.
• CBOT corn futures reached a 16-month high above $5 a bushel on robust export demand and tightening inventory expectations. Wheat futures rose to a 4-month high on concerns over cold weather threatening crops in Russia and the U.S.

Currencies

• The US dollar was mixed after a slight firming yesterday, with USDJPY pushing back lower overnight after consolidating some of the recent sell-off. Important range support there just below 151.00. EURUSD pushed back lower, posting a low of 1.0435 before bouncing back near 1.0450.
• Sterling has rallied versus the euro after strong earnings and employment data yesterday, with EURGBP challenging below 0.8300, even seeing a sudden slip to 0.8266 overnight before rebounding.
• The kiwi (NZD) pulled back higher after the RBNZ cut 50 basis points but signalled a slower pace of rate cuts to come. AUDNZDbriefly sprinted higher in the wake of the decision to 1.1170+ but pushed back lower toward 1.1120 later in the session.

For a global look at markets – go to Inspiration.