Market Quick Take - Oil gaps lower as US-Iran strikes pause, Fed in focus - 27 July 2026

Market drivers and catalysts

• Macro: A two-night pause in US strikes on Iran pulled oil sharply lower and reset the risk mood before Wednesday's Fed decision
• Equities: US futures point to a chip-led rebound after a soft Friday close, Asia opened higher on the de-escalation
• Volatility: VIX held near 18.6 into a Fed week, with the curve in contango and oil vol still running near four times equity vol
• Digital Assets: Crypto firmed overnight with the relief rally after two sessions of heavy ETF redemptions
• Commodities: Brent gapped below 90 dollars on the strike pause while gold pushed back above 4,100
• Fixed Income: Treasuries rallied across the curve as cheaper oil eased inflation fears before a live FOMC
• Currencies: The dollar weakened against every G10 peer as the haven bid unwound; MAS tightening lifted the Singapore dollar

Macro

• The US suspended strikes against Iran for a second night, easing supply-disruption fears after almost two weeks of conflict. The unannounced pause began late Friday, with Tehran saying it had halted retaliatory operations and held talks with Oman over the Strait of Hormuz. Iran-backed Houthi forces claimed weekend attacks on Saudi Aramco-linked facilities at the Red Sea ports of Jizan and Yanbu, leaving a residual risk premium in place.
• Wednesday's Fed decision is now a live event. Bond markets enter the week pricing better than a one-in-three probability of a rate hike, a marked shift from expectations of an extended hold. A hold remains the base case, and the tone of the statement and press conference will carry more weight than the decision itself.
• Data were firm across the board. The S&P Global US Services PMI rose to 53.6 in July from 51.2, the fastest growth this year, though input costs hit a 14-month high; manufacturing edged down to 53.8. New single-family home sales rose 1.6% in June to an annualised 628,000. In Europe, the UK composite PMI returned to expansion at 52.1 from 49.3, and the eurozone services PMI rose to 51.6 from 49.4.
• More in our Macro Analysis & Macroeconomic News

Macro calendar highlights (times in GMT)

Wednesday 29 July: FOMC decision, followed by Chair Warsh's press conference
Thursday 30 July: Bank of England decision, US Q2 GDP and the PCE deflator
Thursday to Friday 30 to 31 July: Bank of Japan decision

Earnings events

• Monday: LVMH, Christian Dior, Navitas
• Tuesday: Visa, Coca-Cola, KLA, Seagate, Boeing, S&P Global, PayPal
• Wednesday: Microsoft, Meta Platforms, Lam Research, Procter & Gamble, ARM Holdings, Qualcomm, Starbucks, SK Hynix, Hermes, L'Oreal, Rio Tint
• Thursday: Apple, Amazon, Mastercard, Coinbase, Prada
• Friday: ExxonMobil, Chevron, AbbVie, Moderna, Kioxia

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

Equities

• USA: The S&P 500 closed little changed at 7,411.98 on Friday, finishing the week down 0.6% for a second consecutive weekly decline. The Nasdaq 100 fell 1.15% as chipmakers sold off sharply, with the Philadelphia Semiconductor Index down 4.3%. Intel reversed an initial post-earnings advance to close down 7.89% despite a blockbuster revenue forecast, and Tesla extended Thursday's slump with a further 3.3% fall. Apple was the bright spot, rising 3.5%. Financials outperformed, up 0.9%, while American Express fell 4.3% on elevated expenses. About 85% of S&P 500 companies reporting so far have beaten profit estimates, the highest proportion in five years. Heading into Monday, S&P 500 futures rose about 0.7% and Nasdaq 100 futures about 1.2%.
• Europe: The pan-European Stoxx 600 edged 0.6% higher to 644.67 on Friday, rising for a second straight week and outperforming global benchmarks. SAP lifted the tech sector, while Nestle suffered a record single-day drop on Thursday after weaker North American volumes, and UniCredit's results were overshadowed by concerns it may scrap a planned buyback. Blended EPS growth for the index is tracking around 17% year-on-year with roughly 30% through results. Euro Stoxx 50 futures rose 0.6% this morning.
• Asia: Asian equities opened higher on Monday as the strike pause lifted sentiment, with MSCI's Asia Pacific gauge up 0.5%, led by South Korea and Japan. The Kospi rose about 1.7% at the open, the Topix gained 1.3% and Australia's ASX 200 1.3%. Samsung Electronics won a contract worth more than 200 billion dollars to supply chips to Broadcom through 2030. Hong Kong's Hang Seng added 0.8%, though Chinese chipmakers were volatile as CXMT debuted in Shanghai, jumping as much as 535% and briefly valuing the memory maker near 487 billion dollars, China's largest onshore-listed company. Separately, Nvidia is reported to be in talks to provide a guarantee of about 250 billion dollars to help OpenAI lease computing from a SoftBank-developed data centre, and will invest 1 billion dollars in Naver.
• More in our Equity Trading - Stock Market Analysis & News

Volatility

VIX 18.58 | VIX FUTURES: 18.61 | TERM STRUCTURE: CONTANGO | SKEW: ELEVATED (147.28) | MARKET REGIME: NEUTRAL / CHOP | AS OF ~06:00 CET

• Friday's close left VIX at 18.58 and VIX1D at 15.43 after the chip selloff, with VXN at 28.39, 1.53 times the VIX. The weekend pause in US strikes on Iran showed up first in the futures: the front VIX contract eased 3.2% to 18.61 overnight, the second month to 19.57.
• The cash curve held Friday's contango, VIX9D 17.62 against VIX3M 20.51, SKEW elevated at 147.28 and MOVE down 4.1% to 76.82. Oil vol OVX near 68 is 3.7 times the VIX. SPX options imply 53 points (0.71%) for today and 134 points (1.81%) into Friday, ahead of Wednesday's Fed.
• For a more detailed view on volatility, check our Options Briefs in the Options Insights

Digital Assets

BITCOIN ~65,241 +1.2% | ETHEREUM ~1,945 +3.4% | IBIT 36.35 -0.82% | ETHA 14.04 -0.50% | AS OF ~06:00 CET

• Digital assets firmed overnight with the broader relief rally, ether outpacing bitcoin as the oil-driven inflation scare faded. That follows a bruising Friday for crypto equities: miners fell hard, with Cipher down 10.3%, Iren 8.7% and CleanSpark 7.0%, while Coinbase and Strategy each lost about 2%.
• Institutional flows turned: US spot bitcoin ETFs shed about 225 million dollars on Thursday and a further 240 million on Friday, roughly 90% of it from IBIT, erasing much of July's inflows. Coinbase reports Thursday.

Commodities

• Brent crude fell as much as 7.4% at Monday's open, briefly dipping below 90 dollars a barrel, and was trading near 88 into the European morning; WTI fell about 5% to around 85. The move reverses part of last week's surge that briefly took Brent above 100 dollars, a level last seen in late May. The global benchmark is still up more than 50% this year. Houthi claims of attacks on Saudi targets keep a residual risk premium in place, and oil vol OVX held near 68, still the most elevated corner of the vol complex. European natural gas futures also slid at the open.
• Gold climbed about 0.9% to near 4,090 dollars an ounce, on track for its first monthly gain since the Middle East conflict began, with central-bank reserve buying and sovereign-debt concerns cited as structural supports. The overnight drop in oil could temper safe-haven demand at the margin, though dip-buyers have been active; GVZ eased to 24.33. Silver rose 1.2% to 59.60. Copper edged higher to about 6.35 dollars a pound, with supply tightness in China cited as a key driver.
• More in our Commodity News, Analysis & Commentary

Fixed Income

• US Treasuries rallied on sharply lower crude oil prices after the weekend saw a halt of US-Iran hostilities. This came after Thursday and Friday last week saw cycle-highs in US treasury yields since late 2024 across the US treasury yield curve. The benchmark US 2-year yield traded early Monday almost four basis points lower at 4.29%, while the 10-year yield traded over four basis points lower at 4.63%.
• Japan’s yield curve flattened last week as front-end yields rose more sharply than longer yields, anticipating more Bank of Japan tightening later this year. The 2-10 spread peaked at 145 basis points in early July, but is now near 125 basis points Monday after the benchmark 10-year JGB yield fell five basis points, while the 2-year JGB yield only dropped back one basis point Monday.

Currencies

• The US dollar weakened against all of its G10 peers, with the Bloomberg Dollar Spot Index down about 0.2% as the haven bid built during the US-Iran conflict unwound. EUR/USD rose 0.3% to 1.1403. The Swiss franc rallied slightly as global yields dipped.
• The yen remains structurally weak. Despite a modest overnight gain to about 163.58 per dollar, USD/JPY sits near multi-decade highs; Goldman Sachs revised its FY26 assumption to 162 from 157. In Asia, USD/SGD fell about 0.15% to 1.2886 after the MAS very slightly steepened the SGD NEER policy band, while the Indonesian rupiah dropped alongside the country's bonds and stocks after Bank Indonesia Governor Perry Warjiyo unexpectedly resigned. The offshore yuan was little changed at 6.7691.
• The FOMC (Wednesday), Bank of England (Thursday) and Bank of Japan (Friday) all meet this week, with stakes a bit higher than usual because of the recent aggressive rise in energy prices and global bond yields. The FOMC is seen at about 33% likely to hike, while guidance indicating the likely timing of a coming hike is more the focus from the BoJ and BoE this week.
• More on currencies in our dedicated section: Forex Trading News & Analysis