Global Market Quick Take: Europe – 16 January 2024 Global Market Quick Take: Europe – 16 January 2024 Global Market Quick Take: Europe – 16 January 2024

Global Market Quick Take: Europe – 16 January 2024

Macro 3 minutes to read
Saxo Strategy Team

Summary:  US equity futures trade lower, thereby replicating losses in Europe on Monday after ECB comments pushed back against bets on early and extensive rate cuts. The weakness being driven by a part reversal of Friday’s drop in US and European bond yields and the dollar trading at a one-month high. Focus on a speech from Fed’s Waller later today and whether he also chooses to push back against bets that US rates will be cut by more than 1.5% this year. Brent crude oil prices hold steady while European gas prices slumped to a five-month low amid ample supply to meet current winter demand. In focus today we have bank earnings from Morgan Stanley and Goldman Sachs

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

Equities: The US equity market was closed on Monday for a holiday. So far today, the S&P 500 and the Nasdaq 100 futures trade around 0.4% from their Friday close. This dip followed weakness on Monday in European markets, attributed to ECB officials pushing back on investors' rate cut expectations. Notably, Morgan Stanley and Goldman Sachs are set to report their results before the US market opens on Tuesday.

FX: The Bloomberg Dollar index climbed to a one-month overnight, building on Monday’s gains as Treasury futures slipped at the Tokyo open after rallying strongly last week, thereby following in the footsteps of a selloff in European debt after ECB’s Holzmann said the bank may struggle to lower interest rates this year amid lingering inflation. High beat currencies were the worst performers, with AUDUSD sliding below 50DMA and approaching a test of 0.66 support. NZD also slid to test the 50DMA at 0.6159. USDJPY rose above 146 despite escalation in the Middle East conflict, with firmer Japan PPI report this morning and CPI data on watch this week. EURUSD slid below 1.0920 despite the hawkish rate comments.

Commodities: Brent crude remains stuck below $80 showing limited reaction to another ramp up in geopolitical tensions after Houthis hit a US vessel and Iran’s IRG launched missiles at targets in northern Iraq and Syria. In North America extreme cold has reduced production of crude and demand for fuel. European gas futures fell to a five-month low amid high inventories despite reports that Qatar could pause LNG shipments through the Red Sea. Traders will be focusing on comments out of Davos along with geopolitical developments, and oil market reports from OPEC and IEA due Wednesday and Thursday. Gold failed to break key resistance in the $2060 area before trading softer amid rising yields.

Fixed income: Returning from the Martin Luther King Day holiday, Treasuries were sold in Asian trading on Tuesday, with yields approximately 6bps higher than their Friday New York closing levels. The 2-year Treasury notes are trading at 4.21%, and the 10-year Treasury notes are at 4.0%, influenced by the weakness in European government bonds following hawkish comments from ECB Governing Council member Holzmann. The focus turns to Davos, and the ZEW survey for the Eurozone today. Tomorrow US retail sales, industrial production and the import price index will be released before a 20-year US Treasury bond auction.

Macro: At the Davos meetings, ECBs Holzman and Nagel said that rate cuts were still a way off. Holzman said that the market should not count on rate cuts at all this year. Nagel was a bit more open saying it is too early to talk about rate cuts. WSJ's Timiraos wrote Fed officials are to start deliberations on slowing but not ending (QT) as soon as their policy meeting this month. Japan’s December PPI came in firm at 0.3% MoM, unchanged from last month but higher than flat expected. YoY was flat vs. +0.3% previous and -0.3% expected. This could fuel some talk of BOJ exit, but any gains in yen could be erased.

Volatility: Volatility took a brief hiatus as U.S. markets observed Martin Luther King Jr. Day, but the undercurrents were active. VIX futures rose to $14.900, a 3.01% increase, hinting at some apprehension. The S&P 500 and Nasdaq futures dipped, at 4997.75 (-18.75 | -0.39%) and 16877.00 (-92.25 | -0.54%) respectively, potentially setting a cautious tone for the trading day ahead. Today's spotlight is on Morgan Stanley and Goldman Sachs, with their earnings reports anticipated to be significant yet unlikely to stir major volatility, as reflected by their relatively low IV Rank. Interestingly, both firms saw a post-earnings IV Rank increase last quarter, bucking the common trend of post-earnings volatility contraction.

In the news: Fed Tiptoes Toward Dialing Back Key Channel of Monetary Tightening (WSJ), Apple to Pull Blood-Oxygen Tool From Watches to Avoid US Ban If Appeal Fails (Bloomberg), Microsoft Expands Office AI Copilot to Consumers, Smaller Companies (Bloomberg), Communist Party must ‘win the hearts’ of people in Hong Kong, Macau and Taiwan: Xi (SCMP), Alibaba, TikTok woo US with AI and live-streaming e-commerce at CES trade show (SCMP), Republicans Battle for Runner-Up as Trump Leads Iowa Caucuses (Bloomberg), Donald Trump wins landslide in Iowa with Ron DeSantis a distant second (FT)

Macro events (all times are GMT): Germany ZEW (Jan) exp 11.7 vs 12.8 (0900), US NY Fed Empire State Manufacturing (Jan) exp –5 vs –14.5 prior (1230), Canada CPI (Dec) exp –0.3% & 3.4% vs 0.1% & 3.1% prior (1230), Fed’s Waller speaks on economic outlook and monetary policy (1500)

Earnings events: Morgan Stanley and Goldman Sachs are set to report their results before the US market opens

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


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

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 (
- Analysis Disclaimer (
- Notification on Non-Independent Investment Research (

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

Contact Saxo

Select region


The Saxo trading platform has received numerous awards and recognition. For details of these awards and information on awards visit

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.