Global Market Quick Take: Europe – August 31, 2023 Global Market Quick Take: Europe – August 31, 2023 Global Market Quick Take: Europe – August 31, 2023

Global Market Quick Take: Europe – August 31, 2023

Macro 3 minutes to read
Saxo Strategy Team

Summary:  US and European stocks trade higher for a fifth day while Treasuries hold gains after recent economic data weakness have raised expectations the Federal Reserve is close to ending its rate hike cycle. Weakness was seen in China overnight after manufacturing activity contracted for a fifth month, albeit by less than feared.

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

Equities: Momentum is extending with S&P 500 now firmly above the 4,500 up 3.3% over the past five trading days. Hang Seng futures are still very volatile due to policy uncertainty in China but up 4.4% over the past 8 trading sessions suggesting that traders are betting that Chinese equities have turned a corner; we remain cautious on China.

FX: More dovish data in the US put the dollar on the backfoot, while firmer inflation prints in Germany and Spain brought EURUSD above 1.09 although it failed an attempt of 1.0945. EZ inflation data in focus today. GBPUSD broke above 1.27 amid a data-light week with focus on US and EZ. AUDUSD extended its recent recovery before failing again above 0.65. USDJPY remains close to 146

Commodities: Gold holds near resistance at $1948 after US economic data weakness supported an extension of the recent rally. Crude oil holds gain after US stockpiles hit the lowest of the year following a large 10.6m barrel draw and speculation that OPEC+ will prolong current supply cuts. Coffee rose on worries about the El Niño impact on production in Brazil while cocoa hit a 12-year high on poor crop conditions in West Africa.

Fixed-income: Treasuries stay in demand with US 10-year yield down 25 bp since the August 22 peak as US economic data weakness raise the prospect for peak rates. The 2-10 spread trades steady around –77 bp.

Volatility: Yesterday the VIX continued its downward path to 13.88, heading towards the lows of this year at 12.73. In equities, volatility of Lululemon Athletica is still very high as they will be releasing their quarterly earnings. The put/call ratio of LULU was 1.52 yesterday, which indicates that traders are more bearish than bullish on the stock in the short term.

Macro: The 2nd estimate for Q2 2023 GDP was revised lower to 2.1%, softer than the expected and prior 2.4% with PCE prices and the deflator for the quarter also softer. Following on from the drop in JOLTS job openings on Tuesday, the ADP private payroll data cooled to 177k (exp. 195k), down from the prior month's even hotter 371k print after a revision from 324k, both adding to hopes that Fed will not hike more. China’s Manufacturing PMI data rose for a third month in a row but at 49.7 vs 49.2 expected, it remains in contraction territory for a fifth month, while the services PMI showed expansion.

In the news: Salesforce shares up 5% in extended trading on better-than-expected profitability on cost cutting while outlook has improved - Full article in the WSJ. UBS reports first quarterly results post the Credit Suisse takeover beating expectations – Full article on CNCB.

Technical analysis: Shoulder-Head-Shoulder reversal pattern demolished in S&P 500, resistance at 4,527 and key support at 4,340. DAX has key resistance at 16,060, above uptrend, with key support at 15,482. EURUSD correction to 1.0960 before expecting downtrend to resume.

Macro events: EU CPI (Aug) est. 5.1% vs 5.3% prior (0900 GMT), US Cont. Claims est. 1706k vs prior 1702 (1230 GMT), US PCE Deflator (Jul) est. 3.3% vs prior 3% (1230 GMT)

Earnings events: Broadcom FY23 Q3 results (US aft-mkt)

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

Quarterly Outlook 2024 Q3

Sandcastle economics

01 / 05

  • Macro: Sandcastle economics

    Invest wisely in Q3 2024: Discover SaxoStrats' insights on navigating a stable yet fragile global economy.

    Read article
  • Bonds: What to do until inflation stabilises

    Discover strategies for managing bonds as US and European yields remain rangebound due to uncertain inflation and evolving monetary policies.

    Read article
  • Equities: Are we blowing bubbles again

    Explore key trends and opportunities in European equities and electrification theme as market dynamics echo 2021's rally.

    Read article
  • FX: Risk-on currencies to surge against havens

    Explore the outlook for USD, AUD, NZD, and EM carry trades as risk-on currencies are set to outperform in Q3 2024.

    Read article
  • Commodities: Energy and grains in focus as metals pause

    Energy and grains to shine as metals pause. Discover key trends and market drivers for commodities in Q3 2024.

    Read article


The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research 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. To the extent that any content is construed as investment research, you must note and accept that the 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 under relevant laws.

Please read our disclaimers:
- Notification on Non-Independent Investment Research (
- Full disclaimer (

40 Bank Street, 26th floor
E14 5DA
United Kingdom

Contact Saxo

Select region

United Kingdom
United Kingdom

Trade Responsibly
All trading carries risk. To help you understand the risks involved we have put together a series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. Read more
Additional Key Information Documents are available in our trading platform.

Saxo is a registered Trading Name of Saxo Capital Markets UK Ltd (‘Saxo’). Saxo is authorised and regulated by the Financial Conduct Authority, Firm Reference Number 551422. Registered address: 26th Floor, 40 Bank Street, Canary Wharf, London E14 5DA. Company number 7413871. Registered in England & Wales.

This website, including the information and materials contained in it, are not directed at, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in the United States, Belgium or any other jurisdiction where such distribution, publication, availability or use would be contrary to applicable law or regulation.

It is important that you understand that with investments, your capital is at risk. Past performance is not a guide to future performance. It is your responsibility to ensure that you make an informed decision about whether or not to invest with us. If you are still unsure if investing is right for you, please seek independent advice. Saxo assumes no liability for any loss sustained from trading in accordance with a recommendation.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the U.S. and other countries. App Store is a service mark of Apple Inc. Android is a trademark of Google Inc.

©   since 1992