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CFDs and forex (FX) are complex instruments and come with a high risk of losing money rapidly due to leverage. 63% of retail investor accounts lose money when trading CFDs with this provider.
CFDs and forex (FX) are complex instruments and come with a high risk of losing money rapidly due to leverage. 63% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs, FX, or any of our other products work and whether you can afford to take the high risk of losing your money.
Digital Assets: Bitcoin rebounds, ETF outflows, selective optimism
Commodities: Oil falls, gold rises as Israel and Iran halt hostilities.
Fixed Income: US treasury yield rise tamed slightly as crude oil price surge eases, Key May US CPI release up on Wednesday.
Currencies: US rally partially reverses on recovering risk sentiment. AUD weak.
Macro: US April Trade Balance, May Existing Home Sales & 3-year Notes Auction
Macro
Iran and Israel agreed to halt attacks, easing fears of a wider conflict and energy-driven inflation. President Donald Trump said both sides were seeking an immediate ceasefire and that final negotiations were progressing.
Australia’s consumer sentiment slipped into “deeply pessimistic” territory in June after the Consumer Sentiment Index fell 2.9% to 80.6 points – one of the weakest seen in the 50-year history of the survey - as households struggle with cost of living pressures and concerns emerge over the outlook for the housing market following tax changes. Meanwhile Australia’s May business conditions were unchanged from a month earlier while confidence where higher than expected. National Australia Bank abandoned its call for an August RBA rate hike, saying that the next move from the central bank was more likely to be a cut, with the timing uncertain.
China's trade surplus jumped to USD 105.4 billion in May, the biggest since January, as exports jumped more than 19% from a year earlier, topping forecasts as booming demand for artificial intelligence hardware offsets disruptions from the war in Iran, while imports soared over 27%.
US one-year-ahead inflation expectations slipped to 3.5% in May from 3.6%. Consumers see slower price growth for gas, medical care, and college, but faster for homes, food, and rent. Three- and five-year expectations were steady at 3.1% and 3%. Expected earnings growth stayed at 2.7%, spending growth fell to 5%, and unemployment expectations edged down to 43.2%.
Macro calendar highlights (times in GMT)
0600 – Germany April Industrial Production
1230 – US April Trade Balance
1400 – US May Existing Home Sales
1700 – US Treasury to sell USD 58 billion 3-year Notes
Earnings events
Wednesday: Oracle
Thursday: Adobe, Dollarama
For all macro, earnings, and dividend events check Saxo’s calendar.
Equities
USA: The S&P 500 rose 0.3% to 7,405.73, the Nasdaq 100 jumped 1.6%, and the Dow slipped 0.2% as investors bought back into parts of Friday’s AI selloff. The Philadelphia Semiconductor Index surged 5.6%, with Intel up 11.2% on reports Alphabet placed a large AI-chip order, Micron up 9.9% on the memory rebound, and Marvell up 9.6% after index-inclusion news. Apple fell 1.9% after its AI event underwhelmed, while financials lost 0.6%. Markets now watch US inflation data and Oracle earnings for the next reality check.
Europe: The Stoxx 600 slipped 0.2% to 621.73, the DAX fell 0.6% to 24,616, the SMI lost 0.5%, and the FTSE 100 was flat at 10,373 as Middle East headlines drove another choppy session. Zealand Pharma plunged 22.7% after obesity-drug concerns, pulling Novo Nordisk down 4.2%, while Monte dei Paschi jumped 13% on competing Italian banking bids and Intesa Sanpaolo fell 1.4% after launching its offer. Technology partly softened the blow as Europe’s tech index rose 1.3%, but chemicals lagged after a sector downgrade. Investors now turn to the European Central Bank meeting and oil-price swings.
Asia: Asia rebounded today after Monday’s sharp selloff, with the Kospi up 3.0%, the Nikkei 225 up 0.9%, the CSI 300 up 0.4%, and Singapore’s STI up 1.1%, while the Hang Seng slipped 0.2% as the recovery stayed uneven. South Korea led the turn as SK Hynix rose 7.7% on Nvidia partnership news and Samsung Electronics gained 3.4% with the chip rebound. Tokyo Electron jumped 7.6% in Japan, while Alibaba fell 0.5% in Hong Kong after fresh US blacklist pressure. The message was simple: AI was not dead, but the crowd was jumpy.
Volatility
Volatility eased on Monday after Friday’s sharp sell-off, but investors remain cautious about declaring the correction over. The VIX fell from 21.51 to 18.92, while VIX1D dropped to 16.02 and VIX9D to 19.69, indicating that immediate panic hedging has subsided. The S&P 500 gained 0.30%, but attention now shifts to Wednesday’s US CPI report, ongoing Middle East tensions, and next week’s Federal Reserve meeting. The key question for investors is whether Monday’s strength marks the start of a sustainable rebound or simply a short-lived relief rally after an oversold move.
Based on SPX options pricing, the market is currently implying an expected move of approximately 109 points (1.47%) into Friday’s expiry, suggesting a projected range of roughly 7,297 to 7,515 around Monday’s close of 7,405.73.
Daily SPX options read: The options market remains defensive. Put options continue to command higher premiums than comparable calls, indicating that investors are still willing to pay for downside protection despite Monday’s rebound. Recent analysis from Cboe suggests that last week’s volatility spike was driven primarily by increased demand for portfolio hedges rather than outright panic selling. In practical terms, investors are participating in the rebound, but they are not abandoning their protection.
Digital Assets
Digital assets rebounded alongside broader risk assets as geopolitical tensions appeared to ease and risk sentiment improved. Bitcoin recovered above $63,000, while Ethereum stabilised near $1,690, both bouncing from last week’s sharp declines. The recovery was supported by reports that Israel and Iran halted recent military operations, reducing immediate geopolitical concerns, and by renewed Bitcoin purchases from Strategy, which disclosed the acquisition of an additional 1,550 Bitcoin.
Crypto-related equities outperformed the underlying cryptocurrencies. IBIT rose 5.1%, ETHA gained 7.2%, while Coinbase (+6.4%), Strategy (+5.6%), Marathon Digital (+11.9%), Riot Platforms (+4.2%), and CleanSpark (+6.0%) all posted strong gains. Major altcoins also participated in the recovery, with Solana, XRP, and several other large-cap tokens moving higher. However, the broader backdrop remains mixed. US spot Bitcoin ETFs recorded their largest weekly outflow since April 2025 last week, highlighting that institutional investors remain cautious even as prices recover. Options activity continues to point towards selective risk-taking rather than aggressive bullish positioning, suggesting investors are willing to participate in upside while maintaining a disciplined approach to risk.
Commodities
Oil gave back most of Monday’s gains after Israel and Iran halted hostilities that had threatened to derail already fragile efforts to secure a broader peace agreement in the Middle East. US President Donald Trump, meanwhile, maintained his typically optimistic tone, saying negotiations are in the "final throes" of what he expects will be a successful deal.
China’s crude oil imports fell to an eight-year low last month at 33.1 million tons (7.8mb/d) as refiners increasingly drew on accumulated inventories rather than sourcing additional barrels from abroad. The 29% YoY drop together with a surge in US exports, releases from SPR, and a degree of demand destruction, helps explain why oil prices failed to rally more aggressively during last month's supply disruptions.
At the same time, the continued lack of progress towards restoring normal energy flows from the Middle East reinforces expectations of a prolonged period of elevated oil prices. Forward curves remain well supported, with the 2027 average price for Brent and WTI trading near cycle highs at around USD 80 and USD 75.5 per barrel respectively, around 20% above pre-war levels.
Gold stabilised after a two-day slump that saw prices break below key technical support, triggering additional selling from short-term momentum-driven traders. However, rising expectations of further US rate hikes, together with higher bond yields and a stronger dollar, continue to create a challenging backdrop for bullion. These headwinds are currently overshadowing longer-term supportive themes, including central bank demand, fiscal sustainability concerns, and ongoing reserve diversification away from the US dollar..
Fixed Income
US Treasury yields eased lower from cycle highs at the front end of the yield curve as crude oil prices fell on the latest hopes for a more durable ceasefire in the Iran war. After peaking just shy of 4.20% Monday, the benchmark US 2-year treasury yield dropped back toward 4.15% by early trading Tuesday. At the longer end of the curve yields likewise dropped back early Tuesday, with the benchmark 10-year treasury yield trading near 4.55% after a Monday of 4.58%. With US treasury yields having traded at new highs for the cycle recently, the Wednesday US CPI release could have significant impact, depending on the direction of any surprise.
Japan’s government bond yields at the long end of the curve fell back on the latest drop in crude oil prices, with the benchmark 10-year JGB yield over two basis points lower from Monday’s close at 2.705% late Tuesday in Tokyo trading hours after an earlier session high just short of 2.75%.
Currencies
The US dollar rally shifted quickly to reverse Monday as broad risk sentiment recovered from Friday’s sharp sell-off in equities and as the fresh crude oil price surge from the weekend’s developments in the Iran war likewise reversed. Still, the US dollar remains above key breakout levels, trading above 160.00 in USDJPY just as EURUSD remains below the prior range lows of 1.1576. Still, EURUSD finds itself in broad choppy range that extends to a 1.1422 if we take the early 2026 low in the weeks after the Iran war broke out. That is the lowest level since the August of 2025. The next key catalyst for the US dollar is Wednesday’s US CPI release.
The Australian dollar was weak in the crosses early Tuesday after one of Australia’s major four banks, National Australia Bank said that the next RBA move is more likely to be a cut, with uncertain timing, and that they no longer expect an RBA hike at the August meeting. Australian two-year swaps fell back as much as six basis points from Monday’s highs in the Tuesday session and AUDNZD fell back below 1.2100 to as low as 1.2087 after a Monday high of 1.2187.
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