Global Market Quick Take: Europe – 4 November 2024

Global Market Quick Take: Europe – 4 November 2024

Macro 3 minutes to read
Saxo Strategy Team

Key points:

  • Equities: Strong Amazon lifts US, Europe rises on bank gains, Asia steady ahead of U.S. election.
  • Currencies: USD on the defensive after a weak jobs report and ahead of tomorrow’s election
  • Commodities: WTI crude nears $71 as OPEC+ delays December production, Gold and Silver steady ahead of US elections.
  • Fixed Income: Yields continue to fluctuate amid market uncertainty
The Saxo Quick Take is a short, distilled opinion on financial markets with references to key news and events.

Webinar replay: Trading the 2024 US election

Macro:

  • US Oct. Nonfarm payrolls change came in at +12k vs. +100k expected and the revisions to the prior two months of payrolls was -112k. Some noted the not fully quantifiable impacts of the hurricanes that hit populated areas in Florida, though the impact of striking Boeing workers was known and seen in the -46k decline in manufacturing payrolls for the month.
  • US Oct. Unemployment rate steady at 4.1% as expected
  • US Oct. ISM Manufacturing was reported at 46.5 vs. 47.6 expected and 47.2 in September, with the Prices Paid index jumping to 54.8 vs. 50.0 expected and 48.3 in September.

Macro events (times in GMT):  US Sep. Factory Orders (1500), US 3-year Treasury Auction (1800), China Oct. Caixin PMI (0145), Australia RBA meeting (0330) US Election tomorrow.

Earnings events:

  • Today: Vertex Pharmaceuticals, Palantir, Constellation Energy
  • Tuesday : Marathon Petroleum, Coca-Cola European
  • Wednesday : Qualcomm, Arm, Gilead, MercadoLibre
  • Thursday : Arista Networks, Airbnb, Motorola
 

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

Equities:

  • U.S. stocks rose on Friday, boosted by strong Amazon and Intel earnings despite a weak jobs report. The S&P 500 climbed 0.41%, while the Nasdaq gained 0.72%, and the Dow rose 0.69%, with notable gains in Boeing, Chevron, and Microsoft. Apple, however, fell following its earnings release. Investors now focus on a potentially turbulent week ahead with both the U.S. presidential election and a key Fed meeting. ExxonMobil reported Q3 earnings of $1.92 per share, exceeding expectations but reflecting lower year-to-date results due to weak refining margins. Berkshire Hathaway, meanwhile, trimmed its Apple holdings significantly, taking its cash reserves to a record high.
  • In Europe, markets rebounded on Friday, with the STOXX 50 and STOXX 600 each gaining over 1%, trimming weekly losses as strong U.S. earnings lifted sentiment. The banking sector led gains, while Maersk saw a 4.4% jump following target price upgrades. However, the yen’s recent strength weighed on Japan’s Nikkei 225, which declined by 2.63% on Friday, as tech and export stocks sold off.
  • In Monday’s Asian session, stocks traded cautiously. The Shanghai Composite rose 0.53% and the CSI300 added 0.72%, buoyed by strong auto sales, with BYD climbing 4.4%. The Hang Seng Index in Hong Kong edged up 0.11%, with travel stocks like Trip.com surging 5.9%, though property stocks saw profit-taking. Hong Kong markets remain on edge ahead of the U.S. election, with U.S.-China trade relations a focus.

Volatility: The VIX is at 21.88, down 5.53%, reflecting a slight easing in volatility as markets await this week’s high-stakes events. The one-day VIX1D spiked 41% to 19.22, reflecting immediate event-driven uncertainty. Expected moves for the week are notably elevated, with implied moves at 2.53% for the SPX and 3.10% for the NDX, signaling investor caution. The put/call ratio stands at 1.61, the highest since early August, indicating increased hedging as traders position for potential market turbulence around the U.S. election and Fed decision. The Fed’s rate decision on Thursday could add to the volatility, particularly if it deviates from market forecasts.

Fixed Income: UK gilts stabilized on Friday following the selloff caused by the UK Autumn Budget, with the 10-year yield settling at 4.44%, down from a peak of 4.53% during the week. Expectations for BOE rate cuts were adjusted to 95bps by the end of 2025, compared to 125bps a week earlier, with a 21bps cut anticipated this Thursday. German bonds saw the two-year yield dip to 2.25%, and the yield curve steepened as 10-year Bund yields rose to 2.40%. Meanwhile, US Treasury yields climbed to their highest levels in months, erasing earlier gains from weak but distorted October jobs data. This increase reflected caution ahead of key events, including refunding auctions, the US presidential election, and the Fed’s rate decision, with the 10-year yield reaching 4.36% on Friday, the highest since July.

Commodities: WTI crude climbed toward $71 per barrel on Monday, marking a fourth consecutive session of gains as OPEC+ delayed its December production plans, aiming to stabilize prices and prevent oversupply amid demand uncertainties. Renewed Middle East tensions further supported oil prices, with Iran signaling a potential "crushing response" to Israel, possibly timed after the U.S. election but before the January inauguration. Meanwhile, Brent crude rose to $73.1. Gold remained steady at $2,750 as investors assess safe-haven demand and the Fed's policy outlook ahead of the election, while silver held around $32.49, close to a two-week low.

Currencies: Sterling stabilized Friday after the steep run lower on the announcement of the autumn budget, but long UK gilts bear watching this week for whether the bond market will continue to revolt on the fiscal outlook for the country, which would spill over into sterling if yields continue to rise. Elsewhere, the US dollar sold off in the Asian session to start the week after a strong finish on Friday, seemingly as Trump’s odds of winning have faded sharply in betting markets. The US election is tomorrow.

For a global look at markets – go to Inspiration.

Quarterly Outlook

01 /

  • Macro Outlook: The US rate cut cycle has begun

    Quarterly Outlook

    Macro Outlook: The US rate cut cycle has begun

    Peter Garnry

    Chief Investment Strategist

    The Fed started the US rate cut cycle in Q3 and in this macro outlook we will explore how the rate c...
  • Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges

    Quarterly Outlook

    Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges

    Althea Spinozzi

    Head of Fixed Income Strategy

  • Equity Outlook: Will lower rates lift all boats in equities?

    Quarterly Outlook

    Equity Outlook: Will lower rates lift all boats in equities?

    Peter Garnry

    Chief Investment Strategist

    After a period of historically high equity index concentration driven by the 'Magnificent Seven' sto...
  • FX Outlook: USD in limbo amid political and policy jitters

    Quarterly Outlook

    FX Outlook: USD in limbo amid political and policy jitters

    Charu Chanana

    Chief Investment Strategist

    As we enter the final quarter of 2024, currency markets are set for heightened turbulence due to US ...
  • Commodity Outlook: Gold and silver continue to shine bright

    Quarterly Outlook

    Commodity Outlook: Gold and silver continue to shine bright

    Ole Hansen

    Head of Commodity Strategy

  • FX: Risk-on currencies to surge against havens

    Quarterly Outlook

    FX: Risk-on currencies to surge against havens

    Charu Chanana

    Chief Investment Strategist

    Explore the outlook for USD, AUD, NZD, and EM carry trades as risk-on currencies are set to outperfo...
  • Equities: Are we blowing bubbles again

    Quarterly Outlook

    Equities: Are we blowing bubbles again

    Peter Garnry

    Chief Investment Strategist

    Explore key trends and opportunities in European equities and electrification theme as market dynami...
  • Macro: Sandcastle economics

    Quarterly Outlook

    Macro: Sandcastle economics

    Peter Garnry

    Chief Investment Strategist

    Explore the "two-lane economy," European equities, energy commodities, and the impact of US fiscal p...
  • Bonds: What to do until inflation stabilises

    Quarterly Outlook

    Bonds: What to do until inflation stabilises

    Althea Spinozzi

    Head of Fixed Income Strategy

    Discover strategies for managing bonds as US and European yields remain rangebound due to uncertain ...
  • Commodities: Energy and grains in focus as metals pause

    Quarterly Outlook

    Commodities: Energy and grains in focus as metals pause

    Ole Hansen

    Head of Commodity Strategy

    Energy and grains to shine as metals pause. Discover key trends and market drivers for commodities i...
Disclaimer

Saxo Capital Markets (Australia) Limited prepares and distributes information/research produced within the Saxo Bank Group for informational purposes only. In addition to the disclaimer below, if any general advice is provided, such advice does not take into account your individual objectives, financial situation or needs. You should consider the appropriateness of trading any financial instrument as trading can result in losses that exceed your initial investment. Please refer to our Analysis Disclaimer, and our Financial Services Guide and Product Disclosure Statement. All legal documentation and disclaimers can be found at https://www.home.saxo/en-au/legal/.

The Saxo Bank Group entities each provide execution-only service. Access and use of Saxo News & Research and any Saxo Bank Group website are subject to (i) the Terms of Use; (ii) the full Disclaimer; and (iii) the Risk Warning in addition (where relevant) to the terms governing the use of the website of a member of the Saxo Bank Group.

Saxo News & Research is provided for informational purposes, does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. No Saxo Bank Group entity shall be liable for any losses that you may sustain as a result of any investment decision made in reliance on information on Saxo News & Research.

To the extent that any content is construed as investment research, such content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication.

None of the information contained here constitutes an offer to purchase or sell a financial instrument, or to make any investments.Saxo Capital Markets does not take into account your personal investment objectives or financial situation and makes no representation and assumes no liability as to the accuracy or completeness of the information nor for any loss arising from any investment made in reliance of this presentation. Any opinions made are subject to change and may be personal to the author. These may not necessarily reflect the opinion of Saxo Capital Markets or its affiliates.

Please read our disclaimers:
- Full Disclaimer (https://www.home.saxo/en-au/legal/disclaimer/saxo-disclaimer)
- Analysis Disclaimer (https://www.home.saxo/en-au/legal/analysis-disclaimer/saxo-analysis-disclaimer)
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)

Saxo Capital Markets (Australia) Limited
Suite 1, Level 14, 9 Castlereagh St
Sydney NSW 2000
Australia

Contact Saxo

Select region

Australia
Australia

The Saxo trading platform has received numerous awards and recognition. For details of these awards and information on awards visit www.home.saxo/en-au/about-us/awards

Saxo Capital Markets (Australia) Limited ABN 32 110 128 286 AFSL 280372 (‘Saxo’ or ‘Saxo Capital Markets’) is a wholly owned subsidiary of Saxo Bank A/S, headquartered in Denmark. Please refer to our General Business Terms, Financial Services Guide, Product Disclosure Statement and Target Market Determination to consider whether acquiring or continuing to hold financial products is suitable for you, prior to opening an account and investing in a financial product.

Trading in financial instruments carries various risks, and is not suitable for all investors. Please seek expert advice, and always ensure that you fully understand these risks before trading. Saxo Capital Markets does not provide ‘personal’ financial product advice, any information available on this website is ‘general’ in nature and for informational purposes only. Saxo Capital Markets does not take into account an individual’s needs, objectives or financial situation. The Target Market Determination should assist you in determining whether any of the products or services we offer are likely to be consistent with your objectives, financial situation and needs.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the US and other countries. AppStore is a service mark of Apple Inc.

The information or the products and services referred to on this website may be accessed worldwide, however is only intended for distribution to and use by recipients located in countries where such use does not constitute a violation of applicable legislation or regulations. Products and Services offered on this website is not intended for residents of the United States and Japan.

Please click here to view our full disclaimer.