Global Market Quick Take: Europe – 7 December 2023 Global Market Quick Take: Europe – 7 December 2023 Global Market Quick Take: Europe – 7 December 2023

Global Market Quick Take: Europe – 7 December 2023

Macro 3 minutes to read
Saxo Strategy Team

Summary:  The rally in global bonds continued Wednesday with the 10-year US Treasury yield falling to 4.1%, its lowest since August, driven by weaker-than-expected ADP employment report, and a continued sharp decline in crude oil prices supporting a lower inflation outlook. The decline in crude oil pressured energy stocks and together with weakness in Nvidia and Amazon, the S&P 500 futures ended lower to challenge support in the 4550 area. Shares also fell across Asia overnight, driven by Wall Street losses and concerns about China’s fiscal health. The focus now shifts to Friday’s US jobs report after private payrolls showed weakness, thereby supporting a succession of rate cuts in 2024.

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

Equities: Sentiment in equities has soured a bit over the past 24 hours with Nikkei and Hang Seng futures down a little over 1% and equity futures in Europe and the US are slightly lower in early trading hours. One of the looming questions in the market is the decline in the oil price and what it means. Surely, it does not rhyme with economic expansion, but does the current levels rhyme on an incoming recession? This is not clear yet although economic data are suggesting a wider slowdown is happening. Today’s key earnings release is Lululemon Athletica reporting FY24 Q3 earnings tonight after the US market close. With recent upside surprises across many consumer companies, we would not be surprised to see Lululemon surprise to the upside on its outlook.

FX: A broad measure of dollar strength trades higher for a fourth day despite the sharp fall in the 10-year Treasury yield as yields in other G10 bonds declined as well. Losses this week have been led by NOK on plunging oil prices and AUD on continued China growth worries. Bucking the trend is USDJPY which is falling towards 146.50 down more than 0.5% today as Japan’s 10-year yield is at 0.75% rising more than 10 bps, and most since December 2022.

Commodities: The Bloomberg Commodity Index tumbled 2% on Wednesday, with losses seen across all sectors apart from precious metals, most notably the softs sector which saw sugar slump by 7.8% on improved outlook in India, while coffee was down 4.6% on profit taking following recent run up in prices. The energy sector remained under pressure amid concerns supply may exceed demand and scepticism over OPEC+ members’ resolve to deliver on promised production cuts. WTI crude oil tumbled 4.3% to $69.50, its lowest level since June with Brent trading below $75 and into an area that may raise the risk of an emergency OPEC+ meeting. Gold meanwhile continues to consolidate after finding support near $2009 earlier in the week.

Fixed income: The 10-year Treasury yield fell 6bps to 4.10%, marking the lowest level since August. This decline was attributed to a weaker-than-expected ADP employment report, a downward revision in Q3 unit labor costs, and a sharp drop in crude oil prices. Meanwhile, the 2-year yield ticked higher by 2bps to 4.59%, resulting in an 8bps flatter 2-10-year yield curve, now at -49. Job numbers continue to remain a focus today and tomorrow. 

Macro: The US ADP employment report was softer than expected, with a job gain of 103k in November (consensus 130k) and a downward revision to 106k from the previously reported 113k in October. Job gains were mainly in trade and transportation industries and education and health services. Employment in manufacturing fell by 15k. US Q3 unit labor costs were revised down to a large decline of -1.2% Q/Q annualized from previously reported -0.8%. Nonfarm productivity was revised up to 5.2% Q/Q annualized from 4.7%. Bank of Canada, as the market expected, kept its target for the policy overnight rate unchanged at 5% and guidance little changed. Moody’s change outlooks on 22 Chinese local government financing vehicles (LFGVs), eight Chinese banks, 18 Chinese infrastructure SOEs, 15 other SOEs and three private enterprises, including Alibaba and Tencent, to negative from stable.

Volatility: The VIX ticked up to $12.97 yesterday (+0.12 | +0.93%), following the VVIX which rose 1.09 (+1.27%) to 86.85. More volatility is expected today with the release of the Initial Jobless Claims, which will be in focus. Volatility futures rose slightly overnight to 13.900 (+0.165 | +1.19%). S&P 500 and Nasdaq 100 futures stayed nearly flat: -2.50 (-0.05%) and -11.00 (-0.07%) respectively. With oil tumbling down (WTI crude oil tumbled 4.3% to $69.50), it’s volatility index (OVX) rose sharply to 39.72, up 3.36 (+9.24%).

Technical analysis highlights: S&P 500 correction unfolding support at4,58. Nasdaq 100 short term correction, support at 15,744 and 15,535. DAX record close, uptrend very stretched expect correction. EURUSD strong support 1.0760 and 1.07. USDJPY downtrend, strong at 145. GBPUSD rejected at 1.2745, support at 1.2545 & 1.2445. Gold likely to bounce from support at 2.009 to 2,057.  WTI Crude oil support at 67. Brent support at 71.93. 10-year T-yields below support at 4.20 could drop to 4.07

In the news: BOJ's deputy governor highlights benefits of ending ultra-easy policy (Reuters), The Bank of England stepped up warnings about hedge funds shorting US Treasury futures, that suggests a jump in the so-called basis trade, which is where investors seek to exploit price differences between futures and bonds (Bloomberg), Nvidia’s CEO Still Plans to Sell High-End Chips in China (WSJ), Apple moves towards India-made iPhone batteries in push away from China (FT), Global Airlines Set for Record Revenue With Pandemic in Past (Bloomberg), ByteDance offers investors share buyback, valued at $268 bln-sources (Reuters).

Macro events (all times are GMT): Germany Industrial Production (Oct) exp –0.4% vs 0% prior (0800), Eurozone GDP (Q3) exp –0.1% vs –0.1% prior (0900), US Weekly Jobless Claims (1230), US Consumer Credit (Oct), EIA weekly natural gas storage change (1430)

Earnings events: Earnings releases today from DS Smith, Dollar General, Broadcom, Lululemon, Vail Resorts, DocuSign and RH. Our focus is on Lululemon because of its exposure to the US consumer. Analysts expect Lululemon to report revenue growth of 18% y/y and EBITDA of $502mn up from $432mn a year ago.

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.