Market Quick Take - 8 May 2025

Market Quick Take - 8 May 2025

Macro 3 minutes to read
Saxo Strategy Team

Note: This is marketing material.

Market Quick Take – 8 May 2025

Market drivers and catalysts

  • Equities: US up on steady Fed; Alphabet drops sharply; BMW gains despite weak earnings; UK pauses rally
  • Volatility: VIX declines; markets calm post-Fed; subdued ahead of Trump’s trade dea
  • Digital assets: Bitcoin near $100k; altcoins gain; crypto sentiment aligned with equity optimism
  • Fixed Income: US treasury yields steady post-Fed, Japanese government bond yields rise on weak auction
  • Currencies: USD firms as Fed indicates no rush to cut
  • Commodities: Gold holds below USD 3400, Copper softness as NY premium drops
  • Macro events: UK, Sweden and Norway central bank decisions, US jobless claims, US 30-yr bond auction


Macro data and headlines

  • Trump’s Big News Conference” today is expected to be the announcement of a trade deal with Britain, and if correct if would be the first deal announced since Trump imposed tariffs on America’s major trading partners.
  • The Trump administration plans to revoke Biden-era AI chip restrictions, potentially easing global semiconductor trade rules. The AI diffusion rule that was set for May 15 and aimed at limiting China's access to AI chip technology, will not be enforced, according to unnamed sources referred to in major news media. The Trump administration is said to be working on new rules related to access to high-end chips.
  • The Fed held rates at 4.25%–4.50%, cautious about tariffs impacting inflation and growth. Policymakers noted rising uncertainty and risks of both higher unemployment and inflation. Fed Chair Powell said there's no rush to change rates, and the Fed will monitor data, noting solid economic activity despite export fluctuations.
  • The Manheim Used Vehicle Value Index for the US rose by 2.7% month-on-month in April 2025, marking its first increase in three months and the largest since July 2024, following the early April tariff announcement.
  • US mortgage applications increased by 11% in the week ending May 2nd, reversing three weeks of declines due to falling mortgage rates. New home purchase and refinancing applications both rose by 11%, with Veterans Affairs loans up 26%.

Macro calendar highlights (times in GMT)

0600 – Ger March Industrial production
0730 – Sweden Riksbank Rate Decision
0800 – Norway Norges Bank Rate Decision
1100 – Bank of England Rate Decision
1230 – US Weekly Initial Jobless Claims & Continuing Claims
1430 – EIA's Weekly Natural Gas Storage Change
1500 – NY Fed 1-year Inflation Expectations
1700 – US Treasury to Sell USD 25 Billion 30-year Bonds

Earnings events

  • Today: Toyota, Shopify, ConocoPhillips, Nintendo, McKesson, Enel, Rheinmetall, Siemens Energy, Monster Beverage, Coinbase, Infineon, Cloudflare
  • Friday: Enbridge

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

Equities

  • US: US stocks rose Wednesday, buoyed by the Federal Reserve’s decision to maintain interest rates at 4.25%-4.5%, though caution persists on inflation and unemployment risks. The S&P 500 (+0.4%), Nasdaq (+0.3%), and Dow (+0.7%) gained as markets anticipated President Trump's major trade deal announcement, expected with the UK. Nvidia surged (+3.1%) on potential easing of chip restrictions, Disney spiked (+10.8%) after upbeat earnings, while Alphabet dropped sharply (-7.5%) amid Apple's AI search considerations. Futures signal continued strength Thursday morning.
  • Europe: European markets closed lower Wednesday, with STOXX 50 (-0.63%) and STOXX 600 (-0.54%) declining as investors awaited clearer signals from the Fed’s policy outlook. BMW (+2%) rose despite reporting weaker Q1 earnings, whereas Siemens Healthineers (-1.7%) fell on disappointing guidance. EU markets remain wary of potential tariff escalations, as the EU prepares retaliatory tariffs on US goods if trade negotiations falter.
  • UK: The FTSE 100 ended a record-breaking rally, falling 0.44% Wednesday amid profit-taking and declines in pharma giants AstraZeneca (-2.5%) and GSK (-4.9%). Investors await Thursday's Bank of England decision, with expectations of a 25-basis-point rate cut to 4.25%. Meanwhile, optimism surrounds ongoing US-UK trade negotiations, which could ease tariff pressures.
  • Asia: Asian equities gained modestly Thursday on optimism around US-China trade talks and potential easing of US export restrictions on advanced AI chips. Hong Kong’s Hang Seng (+0.8%) extended its winning streak, while Japan’s Nikkei (+0.4%) and China’s CSI 300 (+0.4%) also rose. Regional sentiment, however, remains cautious given ongoing geopolitical tensions between India and Pakistan.

Volatility

Volatility eased further Wednesday, with VIX declining to 23.55 (-4.89%) reflecting calmer market conditions post-Fed announcement. Futures (VX1 at 23.00) continued downward early Thursday (-1.39%), signaling a subdued risk environment ahead of President Trump’s anticipated trade deal announcement.

Digital Assets

Crypto assets rose, driven by renewed trade optimism, with Bitcoin approaching the critical $100,000 mark (+1.88% to $98,850) and Ethereum surging (+5.15%). XRP (+2.21%) and Solana (+2.08%) followed suit. Crypto sentiment appears closely tied to broader equity market optimism ahead of upcoming US-China trade talks.

Fixed Income

  • US treasury yields are almost unchanged from the levels that trade prior to the FOMC meeting late yesterday as the outlook for the US economy remains murky.
  • 10-yearJapanese government bond yields rose sharply from near session lows by some five basis points as an auction of 10-year JGB’s saw the weakest bidding metrics since 2021.
  • The Bloomberg High Yield spread to US treasuries indicator we track tightened one basis point to 356 basis points, which is five basis points above the one-month lows.

Commodities

  • Crude prices rose after falling in the previous session after the Federal Open Market Committee (FOMC) issued a murky outlook for the US economy. Traders continue to focus on US trade talks with China this weekend as Trump moves closer to a deal with the UK. Meanwhile, the Energy Information Administration (EIA) reported a second weekly drop in US stockpiles.
  • Gold is once again consolidating, having failed to hold above USD 3,400 after the FOMC said it was in no hurry to lower rates while also warning about the risk of higher unemployment and inflation from Trump’s tariffs. Traders are still betting on three gold-supportive rate cuts this year.
  • High-grade copper futures in New York trade softer as the premium over London shrinks to 8.5%, down from a recent peak at 15%, with traders pondering what tariff level the US administration will settle for following an ongoing investigation. Demand in China, meanwhile, remains strong while stranded stocks in the US continue to swell, leaving the rest of the world with a tightening supply outlook.

Currencies

  • The US dollar firmed in part on an FOMC meeting that raised concerns for stagflationary outcomes for the US economy (higher unemployment and inflation), although short-term rates were hardly affected by the FOMC meeting or Fed Chair Powell press conference.
  • The USD may also be higher on anticipation of a UK-US trade deal that is apparently set to be announced by the White House later today. This would be the first country of note to agree to a deal with the US since Trump announced the Liberation Day tariffs back on April 2. Sterling has firmed on this development, with a possibly pivotal Bank of England meeting up later today, where guidance for the next meeting will be closely watched.
  • Sweden’s Riksbank and Norway’s Norges Bank are both set to announce rate decisions (no changes expected) this morning and more importantly, will likely indicate their forecasts for the policy rate.

For a global look at markets – go to Inspiration.

Quarterly Outlook

01 /

  • Equity outlook: The high cost of global fragmentation for US portfolios

    Quarterly Outlook

    Equity outlook: The high cost of global fragmentation for US portfolios

    Charu Chanana

    Chief Investment Strategist

  • Commodity Outlook: Commodities rally despite global uncertainty

    Quarterly Outlook

    Commodity Outlook: Commodities rally despite global uncertainty

    Ole Hansen

    Head of Commodity Strategy

  • Upending the global order at blinding speed

    Quarterly Outlook

    Upending the global order at blinding speed

    John J. Hardy

    Global Head of Macro Strategy

    We are witnessing a once-in-a-lifetime shredding of the global order. As the new order takes shape, ...
  • Asset allocation outlook: From Magnificent 7 to Magnificent 2,645—diversification matters, now more than ever

    Quarterly Outlook

    Asset allocation outlook: From Magnificent 7 to Magnificent 2,645—diversification matters, now more than ever

    Jacob Falkencrone

    Global Head of Investment Strategy

  • Macro outlook: Trump 2.0: Can the US have its cake and eat it, too?

    Quarterly Outlook

    Macro outlook: Trump 2.0: Can the US have its cake and eat it, too?

    John J. Hardy

    Global Head of Macro Strategy

  • Equity Outlook: The ride just got rougher

    Quarterly Outlook

    Equity Outlook: The ride just got rougher

    Charu Chanana

    Chief Investment Strategist

  • China Outlook: The choice between retaliation or de-escalation

    Quarterly Outlook

    China Outlook: The choice between retaliation or de-escalation

    Charu Chanana

    Chief Investment Strategist

  • Commodity Outlook: A bumpy road ahead calls for diversification

    Quarterly Outlook

    Commodity Outlook: A bumpy road ahead calls for diversification

    Ole Hansen

    Head of Commodity Strategy

  • FX outlook: Tariffs drive USD strength, until...?

    Quarterly Outlook

    FX outlook: Tariffs drive USD strength, until...?

    John J. Hardy

    Global Head of Macro Strategy

  • 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

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.