Market Quick Take - 29 June 2026

Market drivers and catalysts

• Equities: US and Europe slipped on tech weakness, Asia sold off harder as AI chip nerves stayed in charge
• Volatility: Chipmaker rotation defined Q2's final week, Warsh at Sintra and payrolls set the Q3 tone
• Digital Assets: BTC steadied post-ceasefire, crypto equities split with COIN up and MSTR lower as MiCA deadline arrives July 1
• Commodities: Oil lower as ships keep crossing Strait of Hormuz; Gold sentiment remains weak after tumultuous week
• Fixed Income: US treasury yields and European yields ended last week on a low note ahead of key week for US data.
• Currencies: USD rally eased last week ahead of key incoming data in holiday- shortened trading week in the US (markets closed Friday)
• Macro: UK May Mortgage Approvals & Eurozone June Economic Confidence

Macro

• Japan’s retail sales climbed 5.3% year-on-year in May 2026, the fastest since November 2023, beating forecasts of 3.2% and up from a revised 2.8% in April. Growth was led by autos, machinery, other goods, department stores, pharmaceuticals, and food, supported by government stimulus, while non-store retail, fuel, and clothing declined. Month-on-month, sales rose 1.9% after a 2.1% gain in April.
• China’s industrial profits rose 18.8% year-on-year to CNY 3.14 trillion in January–May 2026, slightly above the 18.2% gain in January–April, supported by AI-related investment and policy backing for advanced industries. Profits increased across ownership types and were led by strong gains in manufacturing, utilities, and mining, especially non-ferrous metals, computer and communication equipment, and chemicals. In May alone, profits grew 21.1% from a year earlier, down from April’s 24.7%.
• The University of Michigan Consumer Sentiment Index was revised up to 49.5 in June 2026 from 48.9, still below 50 but above May’s record low of 44.8. Lower gasoline prices helped sentiment, with expectations rising to 50.7 and current conditions at 47.7. Year-ahead inflation expectations eased to 4.6%, and long-run expectations fell to 3.3%.
• US and Iran agreed to halt further strikes ahead of peace talks in Doha this week, after several days of tit-for-tat attacks on commercial vessels. Shipping through the Strait of Hormuz has picked up since an interim peace deal, but many shipowners remain cautious, with hundreds of vessels still stranded in the Persian Gulf.
• Year-ahead US inflation expectations were 4.6% in June 2026, unchanged from the initial estimate and down from May’s 4.8%, but still above 3.4% in February before the Iran conflict. The five-year inflation outlook was revised down to 3.3% from 3.4%, below May’s 3.9%.

Macro calendar highlights (times in GMT)

• 0830 – UK May Mortgage Approvals
• 0900 – Eurozone June Economic Confidence
• 1430 – Dallas Fed Manf. Activity
• US Markets closed Friday to mark July 4 holiday.

Earnings events

Next week

• Monday: Prosus
• Tuesday: Nike, Constellation Brands
• Wednesday: General Mills

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

Equities

• USA: US stocks ended softer on Friday, with the S&P 500 down 0.1%, Dow down 0.1%, Nasdaq Composite down 0.2% and Nasdaq 100 down 1.1%, while the Russell 2000 rose 0.1%. The main story was rotation away from mega-cap and AI-linked technology after a crowded chip rally lost momentum. Micron fell 6.7% as its post-earnings surge faded, while Apple rose 3.1% after price increases helped offset memory-cost worries. Moderna jumped 12.6% after Piper Sandler lifted its price target, while FedEx fell 1.8% on margin and post-spinoff concerns.
• Europe: Europe closed lower on Friday, with the STOXX Europe 600 down 0.7%, DAX down 1.3%, CAC 40 down 0.6% and FTSE 100 down 0.2%. AI supply-chain worries pulled technology lower, while cheaper oil eased some inflation pressure but did not rescue risk appetite. Infineon fell 4.5% and STMicroelectronics dropped 4.5% as memory-price concerns spread across chip names, while Zalando lost 6.3% after BaFin opened an accounting probe. Volkswagen rose 3.9% on reports of deeper restructuring, and Wise surged 9.6% after strong customer growth and a buyback.
• Asia: Asia closed sharply lower on Friday, with the Nikkei 225 down 4.2%, Topix down 1.3%, Hang Seng down 1.8%, Kospi down 5.8% and Singapore STI down 0.5%. The region took the full hit from AI-chip profit-taking, with South Korea again the pressure point after circuit breakers were triggered. SK Hynix dropped 8.4% and Samsung Electronics fell 5.3% on memory-demand concerns, while SoftBank lost 12.5% after reports that OpenAI could delay its IPO. In Singapore, Hongkong Land fell 2.5% as property and financials weighed on the STI.

Volatility

• The S&P 500 closed Friday near flat at 7,354, masking a difficult week: the MSCI All Country World index shed 2.1% as rotation out of chipmakers accelerated, with SMH falling nearly 4% and QQQ losing 1.4%. VIX ended at 18.41 with VIX1D at 17.56 and VIX9D at 16.80. S&P 500 futures are up roughly 0.6% Monday morning after reports of a US-Iran ceasefire agreement.
• Three catalysts shape the week. Warsh speaks at the Sintra central banking conference; any softening of his hawkish June FOMC stance will be closely watched against market expectations of a possible September hike. Nonfarm payrolls later this week tests whether labour market strength gives the Fed cover to move. The BIS annual report, published Sunday, flagged AI-rally reversal, inflation and fiscal stress as the three most pressing vulnerabilities to global financial stability.
• Pre-market SPX pricing implies SPX near 7,359 at the open. The end-of-week expected move, priced off the July 2 expiry - is approximately 119 points, or 1.6%, placing the implied weekly range at 7,241–7,478. Skew is tilted to the downside: the 10-delta risk reversal stands at +10.1 vol points (put IV 27.2% vs call IV 17.1%), with tail protection remaining bid relative to upside. Nonfarm payrolls later this week is the primary catalyst for any move outside that range.

Digital Assets

• As of early Monday, BTC is at 59,403 and ETH at 1,564, both softer than Friday’s close. BTC dipped below 59,000 over the weekend before partially recovering, with the bounce coinciding with reports of a US-Iran ceasefire agreement. BTC remains more than 54% below its October peak, and the recovery looks tentative rather than the start of a sustained reversal.
• IBIT closed Friday at 33.85 and ETHA at 11.89. Crypto equities diverged on Friday: Coinbase (COIN) added 4.6% to 149.06 while MicroStrategy (MSTR) fell 3.5% to 82.31, a split that reflects selective rotation within the crypto equity space rather than a broad risk-on move. Both names remain deeply below their peaks — Coinbase and Circle have fallen 69% and 72% from their all-time highs, with Coinbase’s first-quarter revenue miss a continuing drag on sector sentiment.
• Friday’s crypto-equity positioning was defensive. IBIT put structures across September to January expiries reflect collar mechanics by ETF holders rather than outright shorting; IREN, RIOT and CIFR saw cleaner near-money put buying into mid-July. On the regulatory front, Binance recorded over 400 million dollars in net outflows last week and withdrew its MiCA licence application in Greece, with the EU transition deadline on July 1 set to restrict onboarding for affected EU users.

Commodities

• Brent crude opened higher in Asia after a weekend of tit-for-tat US-Iran strikes near the Strait of Hormuz. Early gains faded after the two sides agreed to halt attacks, allowing vessels to move freely ahead of peace talks set to resume later this week. As European trading gets underway, Brent is little changed around USD 72. Iran's foreign minister reiterated that Tehran retains exclusive authority over traffic through the Strait of Hormuz under the preliminary peace agreement, leaving the risk of renewed supply disruptions elevated.
• Gold trades lower around USD 4,050, with sentiment remaining weak following a tumultuous week that drove prices to their lowest level since November and a fourth consecutive weekly decline, the longest losing streak since August 2023. Prices rebounded on Friday, supported by a softer dollar and lower Treasury yields after US inflation data came broadly in line with expectations.
• The latest weekly COT report highlights a dramatic shift in hedge funds' appetite for commodities. Over the five weeks, the combination of a stronger dollar, renewed inflation concerns raising funding costs, the Middle East peace agreement, and the Fed's hawkish shift has driven the combined net long across 25 major commodity futures down by 73% to 478,000 contracts. The scale of the liquidation leaves several individual markets potentially vulnerable to sharp rebounds should either the technical or fundamental outlook improve.

Fixed Income

• US treasury edged lower to close last week, with the benchmark 2-year yield falling another three basis points Thursday to 4.09% before edging higher early Monday. The benchmark 10-year treasury yield pushed to its lowest close Friday near 4.37%, the lowest since early May.
• European bonds rallied strongly last week, with the benchmark 10-year German Bund ending the week at 2.85%, down 13 basis points from their close the previous Friday and at the lowest since early March on the apparent combination of a soft growth outlook and lower inflation expectations now that crude oil prices have come full circle from where they were just before the Iran war began.
• US high yield debt remained under modest relative negative pressure into the end of last week, as the the Bloomberg index we track of high yield bond spreads to US treasuries rose another three basis points to 282 basis points, a new high since early April. For perspective, the peak during the Iran war was at 335 basis points and the post-2007 low for this measure came back in January at 250 basis points.

Currencies

• The US dollar rally chopped back and forth Friday, weakening off its mid-week surge, but rallying late Friday into the close of the week, as EURUSD fell from a 1.1434 intraday high Friday to end the day and week below 1.1400. USDJPY remains pinned in a tight range just below its forty-year high from 2024 that was matched last week at 161.95 as it traded 161.60-161.80 early Monday. Key US data up this holiday shortened week in the US (Friday off for July 4 celebration) include the ISM Manufacturing data Wednesday and June jobs report up on Thursday.
• Norwegian krone (NOK) weakest G10 currency last week. The tumble in oil prices has powered a sustained sell-off in NOK, with an acceleration in selling Friday as EURNOK ended the week above 11.30, nearly matching its highest level from late March at 11.34, which is the highest level since the Iran war impacted markets at the start of March. In the interim, the EURNOK low was 10.70 posted in early May.

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