Market Quick Take – 7 October 2025

Market drivers and catalysts

• Equities: US hits new highs on AI rally; Europe flat; Asia mixed
• Volatility: VIX down, headline risks, seasonal bias
• Digital Assets: Bitcoin near record, ETH +3.7%, ETF inflows, MiCA oversight
• Currencies: JPY remains weak but does not extend Monday’s losses.
• Commodities: The gold rush continues, copper trades near record highs
• Fixed Income: Strong 30-year JGB auction reverses some of Monday’s jump in yields. France-Germany yield spread closes at widest since January on French politics.
• Macro events: Thin economic calendar as US government shutdown continues

Macro headlines

• Japan's household spending rose 2.3% in August 2025, exceeding the 1.2% forecast and July's 1.4% increase. It marked four months of growth, helped by government measures. Spending increased in areas like fuel and education, but decreased for food and housing. Monthly spending rose 0.6%, above the 0.1% forecast, yet slower than July's 1.7%.
• French Prime Minister's resignation raised concerns about managing fiscal deficits. In Japan, the yen weakened after Sanae Takaichi's election as LDP leader, with expectations of increased fiscal stimulus. Meanwhile, the US government shutdown continued, as Senators repeatedly failed to pass a spending plan. They are set to vote again on Monday on funding proposals.
• Australian consumer confidence fell to a six-month low in October as firm inflation dimmed rate-cut hopes; Westpac’s index dropped 3.5% to 92.1, its 44th month below 100 with pessimists outnumbering optimists.
• Trump said he would negotiate with Democrats over health care subsidies, a move that could open the door to resolving the government shutdown that has stretched into a second week, but only after the government reopened.

Macro calendar highlights (times in GMT)

US Government data are impacted by shutdowns and are likely to be delayed
0800 – Germany Aug Factory Orders

Earnings this week

• Thu: Pepsico, Progressive Corporation, Delta
• Fri: Blackrock

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

Equities

• USA: The S&P 500 rose 0.4% and the Nasdaq gained 0.7% to record closes, while the Dow slipped 0.1%, as an AI-driven rally overpowered broader caution. Advanced Micro Devices jumped 24.9% on a multi-year OpenAI supply deal that includes a potential equity stake, lifting AI peers. Tesla added 5.5% ahead of a teased event tied to a lower-cost model. Verizon fell 5.1% after naming Dan Schulman as CEO, and AppLovin sank 14.0% on an SEC probe report. Focus turns to shutdown-related data gaps and earnings pre-announcements.
• Europe: The STOXX 600 finished flat (−0.0%) as a chip rebound offset French weakness; the CAC 40 fell 1.4% after political turmoil, while the DAX ended flat and the FTSE 100 slipped 0.1%. ASML climbed with semis after AMD’s OpenAI news, but Mondi plunged 15.4% on a profit warning that hit packaging names. French banks weakened alongside luxury as yields rose and sentiment soured. The tape awaits fresh macro clarity as shutdown delays cloud U.S. data flow.
• Asia: Tone mixed into local catalysts. Japan’s Nikkei 225 rose 0.8% as investors priced pro-growth signals following LDP leadership changes, keeping yen soft and cyclicals bid. Australia’s ASX 200 fell 0.3% on broad sector declines despite upbeat global tech sentiment. Hong Kong’s Hang Seng closed yesterday −0.7% with tech and property weaker; today’s session tracked choppy flows around mainland holidays. Regional attention stays on BOJ signaling and China’s post-holiday policy hints.

Volatility

• The VIX fell to ~16.37 as the S&P 500 gained ~0.36%. Implied volatility anticipates daily SPX moves of ±0.32%. Market calm persists despite macro uncertainty. Headline risk (U.S. shutdown, European politics, central bank moves) could re-ignite volatility. October tends to see volatility creep higher into November. Watch Fed speakers, U.S. data, and Treasury yields for triggers.

Digital Assets

• Bitcoin hovered just below a new record (~$125–126k) after briefly topping $126k over the weekend. Spot Bitcoin ETFs drew about $3.2 billion in inflows last week, led by BlackRock’s IBIT, which nears the $100 billion AUM mark. Ether outperformed with a 3.7% rise, helped by strong inflows into ETHA, while Solana and XRP saw modest gains. Record crypto fund inflows (~$5.95 billion) highlight continued demand despite the U.S. government shutdown. The “hard-money” narrative and supportive policy tone in Washington remain key drivers. In Europe, ESMA’s bid to centralize crypto oversight under MiCA could reshape how exchanges and brokers are supervised.

Fixed Income

• US treasury yields traded sideways to slightly weaker, as yields rose yesterday but fell back overnight. The benchmark 2-year treasury yield is near 3.58% this morning and the benchmark 10-year yield is 4.15% after a high yesterday of 4.166%.
• An auction of 30-year Japanese Government Bonds calmed the JGB market after the benchmark 30-year yield in Japan stretched to a new high for the cycle at 3.35% before crashing back ten basis points lower to 3.25%.
• The France-Germany sovereign debt yield spread blew wider yesterday to test just above the highest close of the year (the 10-year spread reached 89 basis points intraday but fell back to close at 85 basis points, still the widest close since January).

Commodities

• The modern-era gold rush continues unabated, with USD 4,000 — a key psychological level — within reach. Strong ETF demand remains key, driven by ‘FOMO’ and eroding trust in traditional safe havens. Together with ongoing central bank demand and lower funding costs, these are the reasons why Goldman Sachs has raised its December 2026 forecast to USD 4,900. Short-term focus on US government shutdown and French political crisis.
• Oil steadied after a two-day rise as OPEC+ approved a modest 137,000 barrels-a-day increase, and Saudi Arabia kept its main Asia grade price unchanged — surprising traders — as it signals robust demand. Brent held above USD 65, with no urgency seen to cover recently sold positions, and the Brent futures curve reflected softer conditions ahead.
• LME copper reached a 17-month high on Monday to trade less than 3% below the USD 11,100-per-tonne record high from May last year, while NY high grade — distorted by H1 2025 tariff on/off speculation — trades above USD 5 per pound. The market is supported by resource constraints following recent mining accidents and by structural demand growth towards grid and power infrastructure as the AI spending craze continues unabated.

Currencies

• The Japanese yen remains weak after the surprise victory at the weekend of Sanae Takaichi as new LDP leader and coming prime minister of Japan. An advisor to Takaichi said yesterday that USDJPY going beyond 150.00 is “a bit too much” and said that if the yen is too weak, it will keep inflation elevated. He said that an October BoJ rate hike is “difificult” but didn’t see a problem with a December BoJ rate hike. USDJPY posted a new high of 150.62 overnight, while other JPY pairs failed to extend their rally, ending sideways to slightly lower from yesterday’s close.
• Elsewhere, the US dollar mounted a small comeback after its rally yesterday was sharply reversed in places. EURUSD, for example, posted a low below 1.1660 on the news of the latest Prime Minister resignation in France but bounced back to 1.1720 before easing back to 1.1690 by late trading in Asia overnight.

For a global look at markets – go to Inspiration.