Market drivers and catalysts

• Equities: US earnings disappoint; Fed decision due; Europe rebounds; Novo Nordisk plunges
• Volatility: VIX 15.98; curve steepens; SPX straddle signals ±0.5% move
• Digital assets: Bitcoin flat; Ethereum firmer; crypto stocks weaker; ETF flows key
• Fixed Income: US Treasury yields drop ahead of FOMC, key jobs data through Friday’s US jobs report
• Currencies: JPY outpaces the US dollar, rising across the board ahead of FOMC tonight and BoJ to follow in Thursday Asia session.
• Commodities: Oil rallies hard on Russia supply concerns. Gold and silver survive test of support
• Macro events: US July ADP payrolls change, US Q2 GDP, Bank of Canada Rate Decision, FOMC meeting, Bank of Japan meeting

Macro headlines

• U.S. and Chinese officials agreed to pursue extending their 90-day tariff truce after constructive talks in Stockholm. No major breakthroughs were announced, leaving the decision to extend the truce up to President Trump as the August 12 deadline nears. U.S. Treasury Secretary Scott Bessent indicated Trump is likely to approve the extension.
• The UK indicated it will recognize the Palestinian state unless Israel agrees to a ceasefire in Gaza due to the humanitarian crisis there.
• Australia June CPI rose 1.9% YoY, with the core, “trimmed mean” CPI up 2.1% vs. 2.4% in May. For the quarterly Q2 figures, CPI rose +0.7% QoQ and 2.1% YoY vs. 0.8%/2.2% expected, respectively and vs. 2.4% YoY in Q1, while the trimmed mean rose +0.6% QoQ vs. +0.7% expected and 2.7% YoY as expected, down from a 2.9% rate in Q1.
• US job openings dropped by 275,000 to 7.437 million in June 2025, missing expectations of 7.55 million. Declines were seen in accommodation and food services (-308,000), health care (-244,000), and finance (-142,000), while increases occurred in retail trade (+190,000), information (+67,000), and state/local government education (+61,000).
• The US goods trade balance deficit narrowed by $10.4 billion to $86 billion in June 2025, below expectations of $98.4 billion. Importers reduced foreign orders after front-loading inventories due to tariff concerns, following a record deficit of $162 billion in March.
• The US S&P CoreLogic Case-Shiller 20-City Home Price Index fell -0.34% MoM, but increased 2.8% year-over-year in May 2025, down from 3.4% in April and missing the expected 3.0%. This is the slowest growth since August 2023, impacted by higher mortgage rates, tighter financial conditions, and localized market dynamics.

Macro calendar highlights (times in GMT)

• 0700 – Spain Flash July CPI
• 0900 – Eurozone July Confidence Surveys
• 1215 – US Jul. ADP Employment Change
• 1230 – US Q2 GDP Estimate
• 1345 – Canada Bank of Canada Rate Decision
• 1800 – US FOMC Meeting
• 1830 – US Fed Chair Powell Press Conference
• Bank of Japan meeting (usually 0230-0330)

Earnings Events

• Today: Microsoft, Meta, Hermes, HSBC, Qualcomm, Airbus, Lam Research, Banco Santander, Automatic Data Processing, UBS Group, Rio Tinto, Trane Technologies, Robinhood Markets, BAE Systems, Mercedes Benz, Ford, Adidas, Stellantis
• Thursday: Apple, Amazon, Mastercard, AbbVie, Samsung Electronics, Shell, CATL, Schneider Electric, Stryker, Safran, AB InBev, Ferrari, MercadoLibre, KLA Tencor, Microstrategy, Rolls Royce Holdings, The Southern Company, Coinbase, Tokyo Electron, Roblox, Cloudflare, BMW
• Friday: ExxonMobil, Chevron, Linde, Nintendo

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

Equities

• US: US stocks closed lower Tuesday, with the S&P 500 −0.3%, Nasdaq −0.2%, and Dow −0.46%. Earnings disappointments from UnitedHealth (−7.5%), Boeing (−4.4%), Merck (−1.7%), UPS (−10.6%), and Whirlpool (−13.4%) weighed on sentiment. Job openings fell in June, while consumer confidence beat expectations. US-China trade talks ended without a deal, but hopes remain for extending the tariff truce. Futures are flat ahead of today’s Fed decision, where rates are expected to stay unchanged. Investors await earnings from Microsoft, Meta, Ford, and others.
• Europe: European stocks rebounded Tuesday as the STOXX 50 +0.7%, DAX +1.0%, CAC 40 +0.7%, and FTSE 100 +0.6%. EssilorLuxottica +6.4% led gains after strong results, while banks like Santander, BBVA, and Intesa Sanpaolo rose over 2%. Barclays gained 2.5% on solid earnings and a £1B buyback. Novo Nordisk plunged 22% after cutting its profit outlook and replacing its CEO. Heidelberg Druckmaschinen surged 35% after announcing plans to enter the defense market.
• UK: The FTSE 100 rose 0.6%, helped by AstraZeneca (+3.4%) and Barclays (+2.5%). Games Workshop jumped 5.4% on strong profits and dividend growth. Croda International sank 10% after weaker-than-expected first-half profit. Investors focus on today’s results from BAE Systems, HSBC, GSK, Rio Tinto, and Glencore. UK economic data showed steady money supply growth and stronger consumer credit borrowing.
• Asia: Asian equities traded mixed. Australia’s ASX 200 +0.7% after soft inflation boosted RBA rate cut bets. Japan’s Nikkei was steady, while South Korea’s KOSPI +0.9% and China’s CSI 300 +0.5% gained. Hong Kong’s Hang Seng −0.4% fell as tech and property names weakened amid US-China trade uncertainty. Li Auto (−10.5%) and SMIC (−3.7%) led declines. Investors await the Fed and BOJ policy decisions, with Japan likely to hold rates but issue an upbeat outlook.

Volatility

• The VIX rose 0.95 to 15.98 as the S&P 500 slipped 0.3%. VIX futures remain higher at 17.75, reflecting expectations for more volatility. The futures curve is steeper than typical at these levels, showing demand for downside hedges ahead of key earnings and the Fed decision. The SPX at-the-money straddle prices an ±0.5% move for today. Traders remain cautious with Microsoft and Meta earnings due tonight.

Digital Assets

• Bitcoin trades near $118,200, up 0.2%, consolidating after last week’s rally. Ethereum is at $3,821 (+0.7%), while Solana +0.3% and XRP +0.5% edge higher. BlackRock’s IBIT ETF slipped 0.6% despite $147M inflows Monday. ETHA Trust fell 1% to $28.49. Crypto-related equities underperformed, with Coinbase −2.1%, MicroStrategy −2.3%, and Riot Platforms −2.7%. Markets await Friday’s US PCE data as ETF flows dominate sentiment.

Fixed Income

• The US Treasury yields dipped yesterday, with strength in treasuries all throughout the session, not only around the US data releases. The 10-year US Treasury benchmark yield fell some eight basis points to near three-week lows around 4.32%, while 2-year treasury yields edged almost six basis points lower on the session. The US July ADP employment change data and FOMC meetings are up today, with the Fed seen unlikely to change the policy rate, but to suggest incoming data will determine whether a September cut is in play. The market is priced at about 65% odds in favour of a September cut.
• US high yield corporate bond spreads rose slightly yesterday after recently nearing the lows for the cycle since February. The Bloomberg High Yield spread to US treasuries indicator we track rose 4 basis points to 277 basis points.

Commodities

• Gold and silver prices survived an attack on support levels yesterday, with gold remaining above 3,300 per ounce in USD terms and silver above 38 per ounce. Gold remains mid-range after the highs were established way back in April at exactly 3,500 per ounce, and has been unable to close above 3,400 per ounce for more than one day consecutively after four tries above that level.

• The major oil benchmarks rallied hard yesterday, likely on US President Trump’s shortening of the timeline of threatened Russia sanctions to 10-12 days yesterday if Russian leader Putin fails to agree a ceasefire in the Ukraine war. The move higher took Brent and WTI to their respect highest levels since the brief crisis during the exchange of hostilities between Iran and Israel. September Brent trades this morning north of 72.50, up more than four dollars from recent low, with September WTI up above 69.00 this morning.

Currencies

• The Japanese yen took the lead from the strong US dollar yesterday, strengthening across the board as USDJPY fell below 148.00 into early European hours today after trading as high as 148.81 yesterday and ahead of the FOMC this evening and Bank of Japan meeting in the Thursday session overnight tonight.
• The Euro remained broadly weak after a sell-off yesterday, with EURUSD stabilizing just above 1.1550 overnight after a massive sell-off on Monday that extended to a 1.1519 low yesterday. EURGBP found support just below 0.8650 after an enormous reversal off the test of the highs since 2023 near 0.8765 on Monday.

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