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Why tight commodity markets are boosting investor returns

Thu, 03 Sep 2026 10:00:00 Z

Key Points:

Commodities are benefiting from two sources of return: The Bloomberg Commodity Total Return Index has gained 43.3% over the past year, compared with 35% for the Spot Index, highlighting the additional contribution from positive roll returns.
Energy is providing the strongest carry: Tight physical markets have driven Brent, WTI and refined products into steep backwardation, with one-year implied roll yields above 20% across several fuel contracts.
Backwardation can reinforce bullish market conditions: When supply is tight, investors can benefit from both higher spot prices and positive carry, helping explain why commodity markets in backwardation often attract buying on price corrections.
Curve structure matters as much as direction: Contango creates the opposite dynamic, with negative carry eroding returns over time and raising the hurdle for investors even when the underlying commodity price outlook is constructive.

The hidden tailwind behind the commodity rally

The strong performance of commodities this year has been driven by more than rising spot prices. Tight physical markets, particularly across energy, have pushed futures curves deeper into backwardation, providing investors with an additional source of return through positive carry. Over the past year, the Bloomberg Commodity Total Return Index has risen 43.3%, compared with a 35% gain in the Bloomberg Commodity Spot Index. Year to date, the indexes are up 33.4% and 26.5%, respectively.

Over the past five years, the Spot Index has gained 25.5%, while the Total Return Index has risen 71.6%. By contrast, during the previous five-year period, from 2016 to 2021, the Spot Index returned 65.2%, while the Total Return Index fell 3.5%. This period was characterized by ample supply, further reinforced by the sharp, short-term drop in demand during the Covid pandemic.

From ample to tightening supply and its impact on total returns - Source: Bloomberg & Saxo Note: Past performance is not indicative of future results

These figures highlight how market conditions - particularly whether supply is tight or abundant - can significantly affect investor returns. Please note that past performance is not indicative of future results.

The gap reflects futures-curve structure. Commodity indices such as BCOM gain exposure through futures contracts that are periodically rolled into later maturities. When nearby contracts trade above deferred contracts, the roll can generate a positive return by selling an expiring contract at a higher price than the next contract being bought. In contango, the opposite applies.

Energy delivers the strongest tailwind

The effect is most pronounced across energy, where the one-year implied roll yield has risen sharply during the past six months, with Brent and WTI currently offering positive carry of around 19% and 21%, respectively. Refined products are even stronger, with gasoil, ULSD (diesel) and RBOB gasoline showing implied roll yields above 20% and, in some cases, close to 30%.

So far this year, these conditions have helped the BCOM Energy Index - which includes natural gas, down 20% year to date - deliver a total realised return of 75.8%, while the underlying spot index has gained “only” 51.3%.

The steep backwardation reflects tight physical energy markets. Disruption to Middle East and Russian supply and shipping, low product inventories and exceptionally strong refinery margins have increased the premium for prompt supply relative to barrels available further into the future.

This creates a powerful combination for investors: a long position can benefit from both rising spot prices and positive carry as exposure is rolled along the curve.

The one-year futures spread across key commodities - Source: Bloomberg, Saxo

Why backwardation can encourage buying on weakness

A steeply backwardated curve generally signals that consumers are willing to pay a premium for immediate delivery, reflecting low inventories, supply uncertainty or strong near-term demand.

Provided that tightness persists, time works in favour of long positions through positive carry. A correction caused by macroeconomic factors, profit-taking or improved risk sentiment may therefore be viewed as a buying opportunity if the physical market remains tight and the curve stays backwardated.

Contango creates the opposite dynamic. Investors rolling long positions must repeatedly move into more expensive contracts, allowing negative carry to erode returns unless spot prices rise enough to compensate.

Curve structure can therefore provide important confirmation - or a warning - alongside the fundamental and technical outlook.

Metals remain structurally different

Not all commodity sectors currently offer positive carry, with precious and industrial metals mostly remain in contango, although zinc is a notable exception. This does not automatically signal weak fundamentals. Metals typically trade in contango because forward prices incorporate financing, storage and other carrying costs. With USD funding costs still elevated, with the 12-month rate around 4.2%, gold, silver and several industrial metals face a higher hurdle before moving into backwardation.

Zinc’s positive roll yield is therefore particularly noteworthy, reflecting the supply-side tightness supporting the metal. Copper, by contrast, remains in modest contango despite prices near record levels, illustrating why curve structure must be interpreted differently across sectors.

Agriculture presents a mixed picture, with some markets moving towards stronger backwardation while others remain in contango depending on inventories, harvest and weather expectations and immediate supply availability.

Carry has become an important part of the commodity story

Investors focusing exclusively on spot-price performance risk overlooking an increasingly important component of commodity returns.

The trailing difference between BCOM Total Return and Spot performance points to a substantial contribution from rolling futures exposure. The BCOM gross roll yield - measured as the 12-month return difference between the Total Return and Spot indices - has risen to around 8.8 percentage points, close to its strongest level in five years. However, as the chart shows, this return has been driven exclusively by strength in energy, raising the possibility of lower carry once the energy supply situation normalises. At the same time, emerging signs of tightness across key agricultural commodities, driven by war and weather, have not yet translated into meaningful backwardation, as seen during the 2022–2024 period following the beginning of Russia’s war in Ukraine.

One year realised roll yields across the major commodity sectors - Source: Bloomberg and Saxo

Current futures curves still indicate positive aggregate carry, although at a more moderate pace than the exceptional contribution realised over the past year. Based on current BCOM target weights and one-year implied roll yields across its 25 constituent commodities, the weighted implied roll yield is around 3.3%.

The distinction matters: 8.8 percentage points describes the favourable curve conditions experienced over the past year, while 3.3% is a snapshot of currently implied carry, not a forecast of future realised returns.

Overall, commodity markets are being supported by supply constraints, rising spot prices and a futures-curve structure that continues to reward long exposure. As long as physical tightness persists - particularly across energy - backwardation provides an additional tailwind supporting the case for buying corrections rather than automatically treating them as the start of a broader reversal.

A meaningful flattening of these curves, or a shift back towards contango, would instead warn that physical tightness is easing. Watching the shape of the curve may therefore be almost as important as watching the price itself.

Related articles/content
2 Sept 2026: The companies powering AI are outperforming those building it 1 Sept 2026: Commodity strength collides with higher interest rates 29 Aug 2026: COT on forex and commodities - Week to 25 August 2026 28 Aug 2026: From barrels to bushels and bullion as scarcity broadens the commodity rally 26 Aug 2026: Grains hit two-year high as war weather and logistics tighten supply 26 Aug 2026: From escalation to exit ramp why oils war premium is unwinding again 25 Aug 2026: Gold pauses after powerful four-day rally Daily podcasts hosted by John J Hardy can be found here

Related articles/content

2 Sept 2026: The companies powering AI are outperforming those building it
1 Sept 2026: Commodity strength collides with higher interest rates
29 Aug 2026: COT on forex and commodities - Week to 25 August 2026
28 Aug 2026: From barrels to bushels and bullion as scarcity broadens the commodity rally
26 Aug 2026: Grains hit two-year high as war weather and logistics tighten supply
26 Aug 2026: From escalation to exit ramp why oils war premium is unwinding again
25 Aug 2026: Gold pauses after powerful four-day rally

Daily podcasts hosted by John J Hardy can be found here

More from the author
Ole S Hansen's articles on Saxo For market commentary and insights - not trading advice - follow me and join the conversation on Twitter and Substack

Topics: Commodities Crude Oil Gasoline Energy (Sector) Iran USA

Investor Insights: Is it time to consider equal weight ETFs in your portfolio?

Thu, 03 Sep 2026 09:49:00 Z

Note: This is marketing material. This article is not investment advice, capital is at risk.

Equal weight Exchange Traded Funds (ETFs) are enjoying a strong year as several of the largest stocks on major indices that have driven returns in recent years have lagged.

Equal weight ETFs give every stock in the underlying index the same share, rather than market-weight ETFs that resemble the core index itself. For the S&P 500, where the bulk of equal weight index ETF investment is centred, this means each company in the index is weighted at 0.2%.

The oldest equal weight ETF is the Invesco S&P 500 Equal Weight ETF (RSP), which has seen strong inflows this year.

For UK investors the Xtrackers S&P 500 Equal Weight UCITS ETF is more accessible and has USD (XDEW) and sterling-denominated (XDWE) versions. XDWE has returned over +14.35% in the year to date, outperforming a representative market cap weighted ETF like the iShares Core S&P 500 (Acc) UCITS ETF, which has risen +12.30% YTD.

A large part of this lies in the performance of the Magnificent 7 group of companies that have powered US stock market gains and account for around one third of the S&P 500. This means they exert a huge power on overall index performance. They’ve basically been flat this year with the MAGS ETF barely off the 67.50 level.

Investors have been drawn to equal weight ETFs in part due to growing concerns about concentration risk in US markets – the top 10 companies make up about 40% of the index and are very much tied to the AI and therefore mounting concerns about bubble risks and overspending by hyperscalers.

While the S&P 500 has perhaps some of the most liquid equal weight ETFs of their kind, there are other options for investors. For example, the Invesco MSCI World Equal Weight Acc UCITS ETF (MWEP hedged GBP, MWEQ priced in USD) offers broad exposure to global equities in the MSCI World index. There is also the Invesco MSCI Europe Equal Weight UCITS ETF to gain exposure to large and mid-cap companies across developed Europe.

About Equal Weight ETFs

Equal-weight ETFs take a different approach to traditional index investing. Rather than allocating more capital to the largest companies, they give each constituent a similar portfolio weight. This reduces dependence on a small number of market leaders and increases exposure to a broader range of businesses. The trade-off is that investors may sacrifice some upside when mega-cap stocks dominate returns and may face slightly higher costs due to regular portfolio rebalancing.

Most equity indices, such as the FTSE 100, S&P 500, and MSCI World, are market-cap weighted, meaning the largest companies get the biggest allocation.

An equal-weight ETF gives every constituent the same weight. For example, in an equal-weight S&P 500 ETF, each stock starts at around 0.2% of the portfolio regardless of whether it is Apple or a much smaller constituent. The fund periodically rebalances back to equal weights.

Why investors like equal-weight ETFs

1. Less concentration risk

A cap-weighted index can become dominated by a handful of mega-cap stocks. Equal weighting reduces dependence on the biggest names. For example, the largest few US technology stocks can represent a very large share of the S&P 500, whereas an equal-weight version spreads risk much more evenly.

2. Better diversification

Thousands of stocks contribute meaningfully to returns instead of only the largest firms. This can provide broader exposure across sectors and companies.

3. Exposure to a size factor

Equal-weighting naturally increases allocation to medium-sized and smaller large-cap companies. Historically, periods where smaller companies outperform larger ones have often favoured equal-weight indices.

4. "Buy low, sell high" rebalancing effect

Equal-weight funds periodically trim winners and add to laggards during rebalancing. This creates a systematic contrarian discipline that some investors find attractive.

Risks and things to consider

1. Bigger exposure to weaker companies

In a cap-weighted index, successful companies naturally become a larger share of the portfolio.

Equal-weighting forces you to allocate the same amount to weaker or less profitable businesses as to stronger ones.

2. Can underperform in mega-cap-led markets

When a small group of large companies drives market returns (for example, AI-related US tech stocks in recent years), equal-weight funds may lag because they own less of those winners.

3. Higher turnover

Equal-weight ETFs need regular rebalancing, which means more trading, slightly higher costs and potentially greater tracking differences.

4. Often more cyclical

Equal-weight portfolios generally have more exposure to industrials, financials and mid-caps, which can increase volatility during economic downturns.

5. Equal weight is not "safer"

It is a different factor exposure, not necessarily a lower-risk one. Although the ETF itself is passive, equal weighting is effectively an active bet that smaller companies will do relatively well, that market concentration will eventually reverse and that broader market participation will improve.

For other ideas about starting your portfolio I had a look at the Ray Dalio All-Weather Portfolio, and had a look at a simple DIY diversified approach that incorporates gold.

Neil Wilson

Investor Content Strategist

Saxo Bank

Topics: ETFs United Kingdom Highlighted articles UKMustRead UK Generic Disclaimer FR US Actualites et Analyses Trump Version 2 - Investors Volatility investor TagFeed En hurtig tanke UK Portfolio Ideas

Markets pause for breath after yield run-up.

Thu, 03 Sep 2026 09:48:00 Z

The yen is on a tear higher.

Listen to the full episode now or follow the Saxo Market Call on your favourite podcast app.

Links

Breathlessly enthusiastic Silicon Valley types talk up the most optimistic outlook for AI I have heard anywhere. Who am I to say they won't be right, but it was a bit nauseating listening, nonetheless with interesting details here and there.
Gil Duran wrote the ingeniously titled Nerd Reich, a book charging that a tech oligarchy is undermining our democratic institutions and trying to establish a techno-authoritarian state. He traces the intellectual backdrop of its adherents like Peter Thiel, etc. A long form youtube video of the author himself talking about the book.
An exchange on X about China's huge debt load and its implications depending on how it is unwound - Japanese-style or otherwise.
The deepest of dives on "what really happened at Jackson Hole" - not the ramblings of Fed Chair Warsh, but rather on the actual theme of Jackson Hole this year, which was Financial Innovation: Implications for Payments and Policy.

Questions and comments, please!

We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.

Saxo Market Call

Saxo Bank

Topics: Podcast Highlighted articles Forex

Four earnings, one AI message: follow the money

Thu, 03 Sep 2026 09:30:00 Z

Key takeaways

Broadcom’s custom chips and networking show AI spending is broadening beyond general-purpose graphics processing units.
Dell, Snowflake and Palo Alto reveal the next bottlenecks: systems, usable data and security.
Strong results can still disappoint when expectations are extreme, making cash generation and execution more important.

The artificial intelligence boom is starting to look less like one trade and more like a supply chain.

Between 1 and 2 September 2026, Dell Technologies, Palo Alto Networks, Snowflake and Broadcom all reported strong AI-linked demand. Yet investors reacted differently. Dell rallied, Snowflake jumped after hours, while Palo Alto fell and Broadcom slipped.

AI spending still looks strong. The harder question is where the best economics sit, and how much investors have already paid for them.

Broadcom moves to the centre

Broadcom designs custom AI processors and the networking technology connecting thousands of chips inside data centres. AI semiconductor revenue more than tripled year on year, while management now expects about 115 billion USD of AI semiconductor revenue in fiscal 2027.

Large AI developers increasingly want chips designed around their own workloads. Custom chips can offer better cost or power efficiency than general-purpose graphics processing units for specific tasks. Broadcom also sells the networking equipment connecting them, giving it exposure to two bottlenecks at once.

Yet the shares slipped after results. Near-term guidance landed around market expectations, which were already enormous. Strong demand can be real and still not be strong enough for the share price.

The rest of the AI factory is filling up

Dell assembles servers and storage systems that turn chips into working infrastructure. AI server orders hit record levels and the company raised its outlook again, confirming that customers are moving from plans to deployments.

Cash flow deserves attention. Dell generated about 1 billion USD of standard free cash flow on 47 billion USD of quarterly revenue. Its adjusted figure is higher because it adds back cash tied up in customer financing and leased equipment. Hardware growth can still require plenty of cash.

Snowflake helps companies store, organise and use their data. Product revenue accelerated, guidance rose and management said AI products drove roughly half of the recent growth acceleration. AI becomes more useful when it can work safely with a company’s own data.

Palo Alto Networks provides the security layer. More connected data, models and automated agents create more things to protect. Results were strong, but the shares fell as investors questioned how much growth came from acquisitions versus the underlying business.

Follow the bottlenecks, then follow the cash

Broadcom controls scarce custom computing and networking technology. Dell benefits from physical deployment but ties up more capital. Snowflake monetises data usage. Palo Alto benefits from growing security complexity.

For investors, the better question is shifting from “who has AI exposure?” to “what bottleneck does this company control, and how efficiently does it turn demand into cash?”

Risks

The main risk is that infrastructure spending eventually runs ahead of real AI usage. Customer concentration also matters, especially when a few hyperscalers drive demand. Expectations remain demanding.

Investor playbook

Track whether AI orders keep turning into delivered systems, not only announced projects.
Compare revenue growth with margins and free cash flow to judge growth quality.
Watch whether enterprise AI usage spreads into data, security and recurring software spending.

The AI trade is becoming a bottleneck hunt

The first phase of the AI boom rewarded scarce computing power. These four earnings reports suggest the second phase is becoming more interesting.

Broadcom shows custom silicon and networking becoming a serious second pillar of AI infrastructure. Dell confirms physical deployment remains strong. Snowflake shows AI moving into enterprise data, while Palo Alto shows that more automation creates more need for control.

The lesson is not to guess which logo wins the AI race. It is to ask who controls a bottleneck, who gets paid repeatedly and who converts demand into cash. As AI spreads through the stack, those questions may matter more than the headline growth rate.

Topics: Equities Highlighted articles UKMustRead Artificial Intelligence Quarterly earnings

UK shares: Easyjet and Ithaca join FTSE 100 in quarterly reshuffle; Persimmon and Entain drop down

Thu, 03 Sep 2026 06:56:00 Z

Note: This is marketing material. This article is not investment advice, capital is at risk.

Easyjet and Ithaca Energy to join the FTSE 100 Index, with Entain and Persimmon to leave the Index

Five changes to the FTSE 250 Index

FTSE Russell confirmed that Easyjet and Ithaca Energy will join the FTSE 100 Index as a result of the September 2026 quarterly review. In the rebalance, Entain and Persimmon are being demoted from the FTSE 100 Index and will enter the FTSE 250 Index.

Easyjet joins just before it’s due to be taken private after the airline agreed to a £5.7bn takeover by Apollo, following a protracted bidding war by US private equity groups. The takeover approach has sent shares up +31% YTD – a bittersweet re-entry into the index for the airline. It’s due to complete the Apollo deal in the first quarter of next year.

Ithaca Energy shares have risen 68% this year on hopes it will soon gain final regulatory approval to develop the Cambo project. The oil and gas company also has a 20% stake in the Rosebank oil and gas field, which is currently subject to a decision by the government on whether to approve new drilling licences. Whilst the previous Labour government under Keir Starmer halted new licences for drilling in the North Sea, there are signs that Andy Burnham is keen to let some go ahead. A 9.5% dividend yield has supported shares alongside improved guidance but regulatory overhang is a consideration.

Of the two stocks leaving the FTSE 100, Entain has been hit by a lack of progress at its US BetMGM business in the US, while Persimmon has seen its shares slide as part of a broader pullback in the UK housebuilder sector as higher interest rates and rising input cost inflation and labour costs hurt building activity and margins. It’s hard to imagine much more clarity for the sector before the Autumn Budget on 28 October.

Moving up to the FTSE 250 are Pinewood Technologies Group, an automotive software developer, and Volex, which makes power and data transmission products. Volex shares jumped last week after it reported strong profit growth and raised its outlook.

Another joining the mid-cap index is Seraphim Space Investment Trust, which is a newly listed multiple line of existing constituent, Seraphim Space Investment Trust. I had a look at this earlier this year.

Relegated from the index are GB Group and Aston Martin Lagonda Global Holdings.

All changes from this review will be implemented at the close of business on Friday, 18 September 2026 and take effect from the start of trading on Monday, 21 September 2026.

Neil Wilson

Investor Content Strategist

Saxo Bank

Topics: Equities United Kingdom Highlighted articles UKMustRead UK Generic Disclaimer FR US Actualites et Analyses Trump Version 2 - Investors Volatility investor TagFeed En hurtig tanke

London Quick Take - 3 Sep - Stocks subdued in Europe after Wall St snaps losing streak as bond rout cools

Thu, 03 Sep 2026 06:15:00 Z

Note: This is marketing material. This article is not investment advice, capital is at risk.

A global bond rout gathered pace then cooled yesterday as we arguably approached ‘event horizon’ territory for a period of heightened volatility across financial markets as bonds fail as hedges and correlations drive negative feedback loops across equities. A pullback in crude prices offered some relief to bonds but the pressure remains intense with investors hurting to hold onto long-duration debt of any kind. Wall Street snapped a three-day losing streak, with the S&P 500 and Nasdaq both rising almost half a percent. European stock markets are much more subdued this morning with uncertainty over the next move in bonds keeping investors on the sidelines it seems.

The yield on the UK 30yr gilt approached 6% yesterday to notch a fresh 18-year high at 5.944% before some cooling in oil prices saw the move retrace a bit, tracing back to 5.835%. The benchmark 10yr yield rolled over about 10bps from a high at 5.234% to around 5.13% this morning. US yields also moved lower after peaking. The 2-yr Treasury yield tested just above 4.419% Wednesday, nearly matching the intraday high of early 2025 before rolling over several basis points and trading at 4.365% early Thursday. The benchmark 10-year yield dropped back to 4.77% early Thursday after an intraday high of 4.818%. Implied odds for the Fed to hike this month moved down from 70% to 60%. Risks for bond still seemed skewed to the downside (ie higher yields) as it does not feel like we are the level where investors will want to step in front of this wildfire.

Comments from the US administration helped ease concerns in bond markets about the energy complex as Energy Sec Wright said 17mn barrels of oil had transited the Strait of Hormuz on Monday, which if true would be the highest level passing the waterway on a single day since the war started. Even if the Strait is not open fully such a high figure also doesn’t suggest Iran is in control of it. China also said it would work with Middle East countries to ensure crude keep flowing safely. It came as Chevron announced a big investment in Venezuela, which could add some additional barrels on the margins in due course, but will take years so should have limited impact on prices for now. Later on, President Trump said renewed hostilities with Iran will not continue for "too long." There is pressure on him to cool things down in time for the mid-terms. Brent crude futures have backed off from a high yesterday around $97 to below $95, meaning the weekend gap of 25/26 July is just about still holding. European gas prices have also cooled a touch after hitting a more than three-year high.

Yen-tervention: Worries about Japan’s fiscal splurge and debt burden are a factor in the global bond rout. There’s been coordinated US-Japan action in July and August to weaken the yen and perhaps there was some more yesterday as USDJPY tumbled sharply on nothing specific...markets are seeing a chance the Bank of Japan moves more aggressively to tighten policy following comments from the hawkish BoJ policymaker Takata, who hinted at 50bps moves rather than 25bps increments. USDJPY has backed off sharply once again overnight to take a 156 handle as Japan successfully got off a 30yr bond auction.

Meanwhile Andy Burnham, facing his first PMQs, sought to reassure the markets, saying that the government was “grounded in fiscal responsibility” and that Britain was cutting its deficit faster than any other country in the G7. On the whole it sounded like he was neither ruling out more borrowing nor more taxes...we could get both. The 'big spending vibes, small spending commitments' phase of his premiership cannot survive contact with the enemy, which in this case is the bond vigilantes. The best thing the government can do is send a clear signal that it will tackle the supply-side reform required to get the economy moving and more productive. Bond vigilantes would like this – it's more credible than tinkering with taxes and vibing about welfare spending cuts on the one hand and raising defence spending on the other.

US hiring has slowed. Private companies added 38,000 jobs in August, according to ADP, which is down from 46,000 and below forecast 47,000. It makes it the slowest month since January and comes ahead of Friday’s key nonfarm payrolls figures for last month. An unexpectedly soft print for July left market participants trimming expectations for a rate hike in September. July's nonfarm payrolls showed a drop of -23k jobs and more than -100k in downward revisions. And while the unemployment rate declined to 4.1% this was due to a decline in participation. Worker pay was virtually flat over the month with the 12-month increase in average hourly earnings sliding to +3.2%, the lowest since May 2021. As noted previously however, the breakeven employment rate has changed dramatically, which has implications for these monthly jobs reports.

Investors are also starting to look ahead to US-China talks later in September. Semiconductors, AI and Iran are sure to be among the topics, along with broader trade and tariff themes. The G20 has endorsed the US’s light-touch approach to AI regulation. Meanwhile, US Commerce Secretary Howard Lutnick said tariffs on semiconductors are coming and the companies know it.

Among stock movers, Snowflake shares leapt after-hours on growth in its artificial intelligence coding agent named CoCo. Broadcom shares fell despite strong earnings. There was some disappointing revenue forecast for the current quarter, but longer term outlook is very strong- forecasts AI chip market to double to ~$115B in FY27 and reach ~$230B in FY28; targets EPS >$30 in FY28, above estimates, bolstering challenge to Nvidia.

Neil Wilson

Investor Content Strategist

Saxo Bank

Topics: Equities United Kingdom Highlighted articles UKMustRead UK Generic Disclaimer FR US Actualites et Analyses Trump Version 2 - Investors Volatility investor TagFeed En hurtig tanke

Market Quick Take - Shares and bonds rebound as oil prices steady - 03 September 2026

Thu, 03 Sep 2026 05:50:00 Z

Market drivers and catalysts

Macro: A weak private jobs count did little to cool expectations of a Fed hike
Equities: US equities rebounded as technology recovered, Europe stayed under pressure from yields, Asia advanced as bond markets stabilised.
Digital Assets: Miners led the sector higher while the exchange and treasury names lagged
Commodities: Crude steadies, precious metals rebound from three-session slide; wheat retreats from 3½-year high
Fixed Income: Treasury yields rolled over Wednesday after fresh highs. Big rally in longest-dated Japanese government debt overnight after strong 30-year auction.
Currencies: Japanese yen rallied sharply Wednesday and early Thursday, sparking intervention rumours. CAD higher post-BoC.

Macro

US hiring slowed sharply. Private employers added just 38,000 jobs in August on the ADP measure, the weakest since January and below the 47,000 expected. Markets nonetheless moved to a 61% chance of a Federal Reserve hike in September, up from roughly 40% a week earlier, probably driven more by this week’s renewed oil-driven inflation impulse than by the labour data. Factory orders rose 0.9% in July, rebounding from a 0.2% fall and beating the 0.6% forecast, led by a 2.3% jump in transportation equipment.
The Bank of Canada held at 2.25% while warning of stronger upside inflation risks from energy, the Middle East conflict and renewed US tariffs. Australian second-quarter GDP beat estimates, lifting the three-year yield by close to 10 basis points.
Today's calendar highlight is the US August ISM Services survey, expected near unchanged versus July’s 54.1 reading. Some focus will be on the Employment sub-index after July’s surprise dip to 47.4, suggesting weakening hiring plans. Weekly initial jobless claims are expected at 205,000 against 203,000. US August jobs data are up on Friday, with consensus for a non-farm payrolls change of +58k after a decline of -23k the prior month. After Fed Chair Warsh recently emphasised the Fed’s focus on too-high inflation, next Friday’s September CPI data looks particularly important.
More in our Macro Analysis & Macroeconomic News

Macro calendar highlights (times in GMT)

0630 – Switzerland Aug. CPI
0700 – Switzerland Q2 GDP
0930 – US Aug. Challenger Job Cuts
1030 – Sweden Riksbank Governor Thedeen to speak
1230 – US Fed’s Waller (voter) to speak
1230 – US Jul. Trade Balance
1230 – US Weekly Initial Jobless Claims
1400 – US Aug. ISM Services

Earnings events

Today: Zscaler, Lululemon, Ciena, Samsara, DocuSign, Planet Labs

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

Equities

USA: The S&P 500 rose 0.5%, the Nasdaq 100 gained 0.2% and the Dow added 0.6%, ending a three-session losing streak as bond yields stabilised and investors returned to beaten-down stocks. Dell surged 15.8% after lifting its annual revenue outlook to $192 billion on stronger AI-server demand, while Nvidia gained 3.2% as chip stocks rebounded. Palo Alto Networks fell 9.3% despite solid results as its free-cash-flow margin outlook disappointed elevated expectations. After hours, Broadcom initially fell 3.7% after guiding fourth-quarter revenue to $34.8 billion, below consensus, while Snowflake jumped 23.7% after raising its full-year product-revenue outlook on stronger cloud and AI demand.
Europe: The Stoxx Europe 600 fell 0.2%, the DAX lost 0.5% and the FTSE 100 declined 0.3% as elevated bond yields and renewed Middle East tensions kept inflation concerns alive. Retailers were among the weakest groups, with Zalando down 4.7%, while Lottomatica fell 7.6% after announcing a takeover of Spain’s Cirsa. The Swiss market bucked the trend, with the SMI gaining 0.2%. Investors now remain focused on oil prices, bond yields and the next signals from major central banks.
Asia: Asian equities turned lower in today’s session, with Japan’s Nikkei down 0.9% and South Korea’s Kospi falling 1.2% as the stronger yen and renewed pressure on technology shares weighed on sentiment. SoftBank rebounded 1.5%, while Samsung Electronics fell 2.4% and SK Hynix dropped around 3.0%. Investors remained focused on Friday’s US payrolls report and whether central banks will need to tighten further.
More in our Equity Trading - Stock Market Analysis & News

Digital Assets

The coins barely moved and the equity complex split. Miners led, IREN up 7.55%, Riot 4.75% and Cipher 3.90% on continued artificial intelligence and data-centre demand, while Coinbase fell 1.05% and Strategy 1.35%. Block rose 5.88%.
Fund flows stayed supportive, with US spot bitcoin funds taking in about USD 2.6 billion over the past week. On policy, the Senate test for the US Crypto Clarity Act is set for mid-September, and industry confidence in passage before the midterm elections appears to be fading.

Commodities

Oil: Crude prices steadied after a three-day rally, with Brent holding near USD 95 as President Donald Trump said renewed attacks on Iran would be short-lived, while US officials said 17 million barrels of oil exited the Strait on Monday, signalling robust flows through the waterway. Adding to the more constructive tone, Chinese President Xi Jinping said China is willing to work with Middle Eastern countries to “safeguard” shipping through key regional waterways. Meanwhile, US crude stockpiles recorded their first decline since July as exports rose to the highest since June and refineries processed the most crude in seven years.
Precious metals: Precious metals, led by gold, trade higher for a second day, supported by softer US economic data and lower oil prices, which have helped arrest the rise in bond yields. Additional support has come from a softer dollar, particularly against the Japanese yen, which is once again on intervention watch. While the market is pricing a more than 60% probability of a September rate hike, the question remains whether the Fed will tighten that close to the November midterm elections. For now, gold’s inverse correlation with oil prices and bond yields remains a key focus, sidelining other potentially supportive drivers. Fibonacci resistance is seen at USD 4,441 and USD 4,490.
Agriculture: Chicago wheat futures turned lower after reaching a 3½-year high, as traders booked profits while assessing continued threats to Black Sea grain exports. Russia reportedly rejected a moratorium on attacks in the region before striking Ukrainian port infrastructure in Odesa, while Ukraine’s largest farm union warned exporters not to expect deepwater ports to resume operations soon. Turkish President Recep Tayyip Erdogan called for a mechanism to ensure the permanent safety of commercial shipping before the grain crisis escalates further. Corn and soybeans also retreated from recent highs.
More in our Commodity News, Analysis & Commentary

Fixed Income

Global bond yields rolled over slightly lower after new cycle highs Wednesday. The benchmark US 2-year Treasury yield tested just above 4.40% Wednesday, nearly matching the intraday high of early 2025 before rolling over several basis points and trading at 4.365% early Thursday. The benchmark 10-year yield dropped back to 4.77% early Thursday after an intraday high of 4.816%.
Japan’s government bond yield curve bull flattened as rates at the front end of the curve were steady to slightly lower, while the longest-dated JGBs rallied sharply, sending yields tumbling. After strong demand for 30-year JGBs at a government auction, the benchmark 30-year JGB yield had fallen nine basis points by late Tokyo trading Thursday to 4.084%, after testing the record-high yield for the debt just a day before with an intraday high of 4.217%.

Currencies

The Japanese yen rallied sharply Wednesday on no readily identifiable catalyst, sparking rumours of a fresh wave of official intervention to strengthen the currency. The move unfolded as USDJPY was trading above 159.50 and it spiked as low as 158.22 before rebounding to 159.00 and then dipping again early Thursday as low as 157.55. Other JPY crosses fell sharply as volatility in currencies was muted elsewhere: EURJPY dropped to below 183.00 after trading above 185.00, while GBPJPY fell to below 213.00 from above 216.00.
Sterling traded weakly Wednesday as the clearly defined chart resistance in EURGBP of the last two months at 0.8580 fell. EURGBP traded as high as 0.8595 early Thursday. Recent large rises in UK Gilt yields in line with global peers are seen as likely removing budget headroom for new Prime Minister Burnham’s initiatives and spending plans.
The Canadian dollar rallied sharply in the wake of the Bank of Canada rate decision to hold rates as expected. Governor Tiff Macklem raised the level of concern over inflationary pressures in Canada stemming from the Middle East conflict’s impact on energy prices. Macklem was somewhat dismissive of the impact of higher US tariffs for now, as they are to be assessed on a “narrow base” of Canadian goods, but did mention rising growth concerns should the base of the tariffs widen. Canadian 2-year government bond yields jumped about eight basis points and the odds of a BoC hike at the December meeting rose to near certainty. USDCAD rolled over to trade near 1.3835 by early Thursday after an intraday high before the BoC meeting of 1.3940.
More on currencies in our dedicated section: Forex Trading News & Analysis

This content is marketing material and should not be regarded as investment advice. Trading financial instruments carries risks and historic performance is not a guarantee of future results.
The instrument(s) referenced in this content may be issued by a partner, from whom Saxo receives promotional fees, payment or retrocessions. While Saxo may receive compensation from these partnerships, all content is created with the aim of providing clients with valuable information and options..

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Asia Market Quick Take – 03 September 2026

Thu, 03 Sep 2026 01:00:00 Z

Asia Market Quick Take – 3 Sep, 2026

Key points:

Macro: RBNZ hikes to 2.75%. BoC holds at 2.25% but warns of higher inflation
Equities: US indices rise; Snowflake rises 23% after strong earnings
FX: Hawkish BOJ comments and intervention speculation drove USDJPY down to 158.71
Commodities: Oil eases after Trump downplays prolonged conflict
Fixed income: Japan 10-year yields hit 3% since 1996

------------------------------------------------------------------

Disclaimer: Past performance does not indicate future performance.

Macro:

US carried out new strikes on Iranian IRGC targets near the Strait of Hormuz, driving a sustained oil rally and reviving inflation fears, though prices later eased after Trump downplayed the risk of a prolonged conflict.
The latest ADP report showed US private employers added just 38,000 jobs in August, the weakest gain since January and below the 47,000 expected, signaling a cooling labor market. Markets now see a 66% chance of a Fed rate hike in September, up from about 40% a week earlier.
US factory orders rose 0.9% in July 2026, rebounding from a 0.2% drop in June and beating the 0.6% forecast. Gains were led by a 2.3% jump in transportation equipment, including a 12.7% surge in civilian aircraft. Orders ex-transportation rose 0.6%, and ex-defense increased 1.0%.
The RBNZ delivered a second straight 25 bp hike to 2.75% but signaled a slower tightening path than markets expected. It now projects the cash rate at 2.81% by December and 3.15% by end-2027, below the roughly 3.5% peak priced in, and said further hikes are likely but timing is uncertain.
BoC left its policy rate at 2.25% but warned of stronger upside inflation risks from higher energy prices, the Middle East war, and renewed US tariffs, while saying the outlook remains too uncertain to guide future moves.
Australia Q2 GDP beat estimates, sending the 3-year yield up nearly 10 bps, while earnings beats are outpacing misses for the first time in four years.

Equities:

US — S&P 500 rose 0.5% to 7,666.60 on Wednesday, snapping a three-day losing streak, as oil prices stalled and bargain hunters returned. Nasdaq 100 gained 0.2% and the Dow Jones Industrial Average climbed 0.6%. Ten of eleven S&P 500 sectors closed higher, led by materials and communication services. Dell Technologies surged 15.8% on a solid earnings outlook. Meta Platforms gained 3.1% and Nvidia rose 3.2%, while Palo Alto Networks fell 9.3%. In after-hours trading, Broadcom slid as much as ~3.7% after issuing a Q4 revenue forecast that missed expectations ($34.8b vs $35.03b). Snowflake rose 23% after a strong earnings report and upbeat guidance, with revenue jumping 35% yoy, largely driven by new accounts of its AI coding agent CoCo.
EU — European equities extended their losing streak on Wednesday. The Stoxx Europe 600 fell 0.2% to 645.91, its lowest close since 29 July, led lower by industrials — Siemens dropped 1.5% and Lottomatica fell 7.6%. The DAX declined 0.5% to 25,839, with Zalando down 4.7%. The FTSE 100 fell 0.3% to 10,756, with LSE Group down 3.0% and Kingfisher falling 3.8%. The SMI bucked the trend, rising 0.2%, led by UBS (+1.1%) and Alcon (+1.8%). Index changes were also announced: Nokia and Engie will join the Euro Stoxx 50 on 21 September, replacing Volkswagen and Dutch utility Stellantis.
Asia — Asian equities are advancing this morning, tracking Wall Street's recovery, with the MSCI Asia Pacific gauge up ~0.5%. Japan's Nikkei had fallen 2.9% to 64,325 on Wednesday — its lowest in nearly a month — as oil prices and elevated bond yields pressured tech and auto stocks. South Korea's Kospi tumbled ~4% on Wednesday, led by chip stocks Samsung, SK Hynix and SK Square, amid rising oil and rate-hike fears. Australian ASX 200 fell 1% after the stronger-than-expected GDP print reinforced RBA rate-hike expectations. Hong Kong and mainland China markets also declined ~1% or more on Wednesday. The yen's sharp overnight move is also keeping traders alert.

Earnings this week:

Thursday: Ciena

FX:

A sharp BOJ‑driven yen rally pushed USDJPY down over 200 pips (160.39–158.22) and it closed at 158.71, amid stop‑run‑like price action and only moderate JPY futures volumes, casting doubt on actual Japanese intervention.
CAD outperformed on hawkish Bank of Canada rhetoric, with USDCAD falling to ~1.3842 and 2-year yields jumping, while Citi initiated a short USDCAD position targeting 1.35.
EURUSD slipped to 1.1588, breaking below its 21-day moving average and showing mixed Harami patterns on weekly (bearish) and daily (bullish) charts.
AUDUSD closed at 0.7169, the weakest G10 performer, as higher oil prices amid rising US–Iran tensions pressured Asia FX.
SGD's 120-day correlation with the USD has dropped to -0.94, the most inverse link since May 2024 and the most negative in Asia, positioning it as a key beneficiary if the dollar debasement trade accelerates.
KRW has transformed from Asia's worst-performing currency to its best, driven by AI-related capital inflows from chip firms repatriating overseas earnings.

Commodities:

WTI crude settled above $90 per barrel on Wednesday after a sharp two-day rally driven by US-Iran hostilities over the Strait of Hormuz. Brent had briefly hit ~$95 before easing as President Trump played down the prospect of a prolonged conflict.
Gold traded around $4,330–$4,416 per ounce, having fallen nearly 6% over the prior three sessions to a two-week low as surging global bond yields and a stronger dollar weighed on the non-yielding metal. Gold mining stocks, however, had their best August since at least 1994, driven by geopolitical and fiscal uncertainty.

Fixed income:

After a sharp sell-off that pushed the 10-year yield to its highest since October 2023 (~4.81%) and the 30-year to ~5.27% — levels last seen before Treasury Secretary Bessent expanded the buyback programme — yields edged slightly lower on Wednesday. The 1-year yield fell 2.3bps to 4.16%, the 10-year fell 0.5bps to 4.796%, and the 30-year fell 0.7bps to 5.268% by the close.
The rout spread across markets, with Japan's 10-year yield touching 3% for the first time since 1996, UK 30-year gilt yields hitting 5.89% — the highest since May 1998 — and German 10-year Bund yields reaching their highest since 2011.
Overnight swaps were pricing a full 25bp Fed rate hike at the October policy meeting, with nearly 70% odds of a hike as early as 16 September. BOJ board member Hajime Takata also left the door open for an outsized rate increase, pushing Japanese front-end yields higher during the Asian session.

For a global look at markets – go to Inspiration.

This content is marketing content and should not be considered investment advice. Trading financial instruments carries risks and historic performance is not a guarantee for future performance.The instrument(s) mentioned in this content may be issued by a partner, from which Saxo receives promotion, payment or retrocessions. While Saxo receives compensation from these partnerships, all content is conducted with the intention of providing clients with valuable options and information.

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Have we entered the event horizon for a volatility spike?

Wed, 02 Sep 2026 11:45:00 Z

Global bond markets remain chief focus.

Listen to the full episode now or follow the Saxo Market Call on your favourite podcast app.

Links

Ole's latest piece pointing out that many integrated oil majors have outperformed many of the top market cap companies and AI hyperscalers on both 1-year and 5-year time horizons.
A Reuters article says G20 should consider raising trade barriers to China for its unfair policies. This sparked an great conversation on X between Steve Hou and the WSJ's Greg Ip on the nature of the US-China relationship and the utility of pursuing a Chinese currency revalution (higher) after Greg Ip wrote an op-ed in favour of the world forcing a CNY reval.

Questions and comments, please!

Saxo Market Call

Saxo Bank

Topics: Podcast Highlighted articles Forex

Jobs built the products. Cook built the machine. What does Apple’s new CEO build next?

Wed, 02 Sep 2026 11:30:00 Z

Key takeaways

Ternus inherits 2.5 billion active devices, a huge services business and one of corporate America’s strongest cash machines.
Apple’s biggest AI question is not whether it builds the best model, but whether it keeps controlling the consumer interface.
Watch installed-base growth, services, new-product adoption and capital allocation rather than judging the Ternus era by keynote applause.

Steve Jobs built products. Tim Cook built the machine around them. John Ternus now has to decide where that machine goes next.

Ternus officially became Apple’s chief executive officer (CEO) on 1 September 2026, after 25 years at the company and a long spell running hardware engineering. Cook remains executive chairman, giving Apple something close to continuity with new management.

Investors appeared comfortable with the handover, with Apple shares rising even as the broader market fell. The bigger question is much more interesting: how much does management matter when the business already owns one of the strongest moats in the world?

The moat is already doing much of the work

Ternus does not inherit a turnaround. He inherits an ecosystem.

Apple has more than 2.5 billion active devices, while Services has grown into a business generating more than 100 billion USD a year. Every iPhone can lead to AirPods, an Apple Watch, iCloud, payments, entertainment and, eventually, another iPhone.

That is Apple’s compounding engine. Hardware brings customers in. Services deepen the relationship. A larger installed base creates more opportunities to sell both.

Capital allocation completes the picture. Apple continues to return tens of billions of dollars through buybacks and dividends. For investors influenced by Warren Buffett and Charlie Munger, this is where management matters most.

Apple does not need managerial heroics. It needs discipline. Ternus must protect the ecosystem, allocate enormous cash flows sensibly and avoid expensive distractions. A great moat gives management room to make mistakes. It does not make those mistakes free.

AI may test who really owns the customer

Artificial intelligence (AI) is the clearest strategic challenge.

Apple has looked unusually slow while OpenAI, Alphabet and others pushed ahead. But it may not need to build the biggest or smartest AI model to remain powerful.

Its advantage sits closer to the customer. Apple controls the phone, operating system, headphones, watch and computer around them. If AI models become increasingly interchangeable, Apple can let others spend heavily building the engines while it controls the dashboard.

That is why features such as Live Translation on AirPods matter. They turn AI from something impressive in a demo into something useful in everyday life. That is much closer to Apple’s traditional playbook than launching another chatbot.

The risk is that the dashboard itself changes. If consumers increasingly start with an AI assistant rather than an app or operating system, Apple could lose some control over the customer relationship. Ternus must decide what Apple needs to own and where partnerships are enough.

The next iPhone does not have to be another iPhone

Hardware still matters, particularly with a hardware engineer now in charge.

Apple is preparing products ranging from a foldable iPhone to smarter home devices and more capable AirPods. None needs to become the next iPhone to create value.

A foldable phone can encourage upgrades. A home device can extend Apple’s ecosystem into another room. Smarter AirPods can make the iPhone more useful without replacing it.

That may be the more realistic innovation test for the Ternus era. Apple does not necessarily need another revolutionary category. It needs a steady stream of products and features that make the ecosystem more useful and leaving it slightly less attractive.

Where the machine could slow

The biggest risk is that AI changes consumer behaviour faster than Apple adapts. Investors should watch whether Siri becomes genuinely useful, not simply better on stage.

Product innovation matters too. Vision Pro showed that technical achievement does not automatically create a mass market. Supply-chain, regulatory and geopolitical pressures add another layer.

Early warning signs would include slowing installed-base growth, weaker Services momentum or rising investment without better customer engagement.

Investor playbook

Follow the ecosystem: installed devices and Services growing together matter more than one quarter of iPhone sales.
Separate AI demos from behaviour: watch usage, upgrades and developer adoption.
Judge hardware by ecosystem value: smaller products can matter if they strengthen customer retention.
Watch the cash: buybacks, acquisitions and capital spending show where management sees future returns.

The machine gets a new driver

Jobs built the products. Cook turned them into an extraordinarily efficient compounding machine.

Ternus inherits something different: a machine that already works.

His challenge is not simply to invent the next breakthrough. It is to decide where Apple must lead, where it can follow and where restraint is the better choice. AI, foldables and the home will test those decisions. For investors, the most important question is not whether Ternus changes Apple quickly. It is whether he understands which parts of the machine need changing at all.

Topics: Equities Highlighted articles UKMustRead Apple

Summer round-tripping: August monthly roundup

Wed, 02 Sep 2026 08:48:00 Z

Note: This is marketing material. This article is not investment advice, capital is at risk.

In like a lion and out like a lamb. Weather-watchers use this saying about March. Stock traders might consider August 2026 in a similar vein. Global stocks rallied in August as strong corporate earnings and renewed strength in the AI outlook provided reassurance to investors despite the tense geopolitical backdrop and benchmark government bond yields hitting fresh cycle highs. Nvidia posted bumper earnings to underpin confidence in durable AI demand and returns on investment, while a push higher in bond yields was a worry for longer duration equities. Treasury Secretary Scott Bessent’s announcement to prop up the long end of the bond market with additional buybacks provided only a very brief respite for beleaguered bond investors.

Market Roundup

The month kicked off on a strong note with risk assets rising sharply as markets dialled down bets for the Federal Reserve to raise rates. The yield curve steepened as a result with inflation expectations ticking up. But the month finished with the market seeing the Fed taking on a more hawkish policy stance, after Fed chair Kevin Warsh signalled there is “more work to do” on inflation. US 30yr Treasury yields hit 5.34% in August for the highest since 2007, while the 10yr rose to 4.76%, its highest since January 2025.

It was a month marked by sharp gains at the outset for stocks before a shift at the very end of the month as bond yields shot higher. The FTSE 100 was broadly flat, declining –0.4% for the month, while the FTSE 250 managed to rally +4%.

The S&P 500 rose +2.7% in August to round trip a choppy month. Gains were made early in the month and just about held, though September is set up to be choppy once more. The Dow Jones industrial average rose +1% for its fifth consecutive monthly advance; remarkably its 15th positive month in the last 16. The Nasdaq recorded its first monthly rally since May, rising +3.9%, respectively. Both the S&P 500 and Dow reached all-time highs earlier in August.

Across SPX sectors Energy led the pack with a +7.0% surge, followed by Information Technology (+6.2%) and Materials (+6.0%). IT made up almost three-quarters of the overall index’s advance thanks to large market cap weightings. Utilities and Industrials declined as they have back some of the positive rotation we’d seen earlier this year. As tech regained momentum in August software stocks were notable for their bounce following the drawdown into April’s lows.

Moderna was the best-performing stock on the S&P 500 with a gain of +156% on news of its breakthrough melanoma cancer vaccine trial. Palantir rallied over +51% to take the second spot, while the next three best-performing stocks were Veeva Systems, Salesforce (both on strong results and declining worries about the impact of AI on software), and Paramount Skydance.

Commodities rallied though oil prices remained broadly rangebound until breaking out higher at the start of September. Gold had a good month as the yield curve steepened with longer-dated bonds selling off while the front-end remained reasonably well anchored. This dynamic started to shift after the Jackson Hole event, while a sudden re-escalation in the US-Iran conflict sparked fresh worries about inflation from higher energy costs and disrupted supply chains. The peak for spot gold on 25 August marked its best since the middle of May before trading down –8% in the following week after an ascent of +9% for the month of August.

Top performing FTSE stocks & funds

A 55% rally for Oxford Nanopore Technologies took it to the top of the FTSE 250. Hochschild Mining (+55%) and Pan African Resources (+48%) also delivered strong returns as the rally in gold and silver prices boosted precious metals miners.

The gain for gold +9% and silver +15% ensured Endeavour Mining and Fresnillo were the top risers on the blue-chip FTSE 100 index. Among other basic resources names, record high copper prices hit last month helped the likes of Rio Tinto and Anglo American. Computacenter was the third-best riser last month as it extended gains following the upgrade to profits in July.

The gains in gold and silver ensured that the best-performing funds were dominated by precious metals strategies. The top gainers in the Saxo universe included the UBS Solactive US Listed Gold & Silver Miners UCITS ETF, iShares Gold Producers UCITS ETF, Ninety One Global Gold, BGF World Gold A2, VanEck Gold Miners ETF, Global X Silver Miners ETF and the VanEck S&P Global Mining UCITS ETF.

Neil Wilson

Investor Content Strategist

Saxo Bank

Topics: Equities United Kingdom Highlighted articles UKMustRead UK Generic Disclaimer FR US Actualites et Analyses Trump Version 2 - Investors Volatility investor TagFeed En hurtig tanke ETFs

The companies powering AI are outperforming those building it

Wed, 02 Sep 2026 08:30:00 Z

Key Points:

Energy shares have decisively outperformed Big Tech: Geopolitical supply disruptions and soaring refining and gas margins are delivering immediate cash-flow gains, while hyperscalers face mounting AI investment costs and uncertainty over future returns.
The earnings gap reflects different investment cycles: Technology companies are committing unprecedented sums to AI infrastructure, while much of the associated revenue and return on capital remains years away.
Energy companies are monetising scarcity today: Wars, sanctions and disrupted trade flows have lifted crude oil, refined products and natural gas prices, immediately boosting cash flow from existing assets.
Refining has become exceptionally profitable: The US 3-2-1 crack spread has reached USD 63 per barrel, while even stronger European margins reflect diesel above USD 200 per barrel and expensive natural gas.

The technology sector fuelled by the artificial-intelligence investment boom continues to generate strong revenue growth, but some of the strongest equity returns this year have come from the companies providing the energy needed to build and operate the infrastructure behind it.

The contrast is striking. The seven energy majors shown in the table - ExxonMobil, Equinor, ConocoPhillips, Shell, TotalEnergies, Chevron and BP - have delivered an average year-over-year return of 38.5%, compared with 18% for the Magnificent Seven technology stocks. The performance has been particular strong so far this year with all seven energy stocks having gained at least 25%, led by Equinor at 71%, while performance among the Magnificent Seven ranges from Apple’s 19.6% rise to Tesla’s 20.8% decline.

Please note, that these are simple equal-weight calculations, not formal index returns, and that past performance is not indicative of future results.

Mag 7 and Energy 7 performance - Source: Bloomberg & Saxo Note: Past performance is not indicative of future results

The divergence does not mean the AI story is failing. Technology earnings remain formidable, but the cost of maintaining that growth is escalating rapidly. Meta’s second-quarter revenue rose 28% to USD 60.8 billion, yet capital expenditure reached USD 31.1 billion and free cash flow fell to just USD 784 million. The company now expects full-year capital spending of USD 130–145 billion.

Amazon offers a similar illustration. AWS operating income jumped to USD 16.6 billion from USD 10.2 billion a year earlier, but trailing 12-month free cash flow swung to an outflow of USD 7.6 billion as purchases of property and equipment increased by USD 66.1 billion, primarily reflecting investment in AI infrastructure.

The hyperscalers can finance these programmes, but investors are increasingly focused on the timing and scale of the eventual returns. Much of today’s spending must be committed before future AI demand, utilisation rates and pricing power can be known with confidence.

For the Energy Seven, the economics are almost the reverse. Higher commodity prices immediately lift revenue and cash flow from producing, processing and infrastructure assets already in operation. Years of restrained investment have limited spare capacity, while wars, sanctions and disrupted shipping routes have reduced the availability of crude oil, refined products and natural gas.

The consequences are already visible in earnings. ExxonMobil reported second-quarter earnings of USD 14.5 billion, more than double the USD 7.1 billion earned a year earlier. Cash flow from operations reached USD 23.6 billion and free cash flow USD 17.2 billion, supported by higher prices, stronger margins and record second-quarter diesel production. Chevron earned USD 12.1 billion, achieved a 21% return on capital employed and reported record US production and refinery throughput.

Equinor has been a particularly clear beneficiary of Europe’s scramble for secure energy. Its second-quarter adjusted operating income reached USD 11.5 billion, while net operating income more than doubled from a year earlier. The company realised USD 15.8 per MMBtu for European gas and USD 97.9 per barrel for liquids, with strong crude trading and refining performance providing additional support.

Crude, products and gas priced in USD per barrel - Source: Bloomberg, Saxo

Refining assets have become another major source of exceptional profits. The US 3-2-1 crack spread - the theoretical margin from converting three barrels of crude into two barrels of gasoline and one barrel of distillate - is trading near USD 63 per barrel, compared with around USD 25 per barrel this time last year. That implies a remarkable margin before operating and other costs for refiners able to maintain high utilisation.

Conditions are even tighter in Europe, where diesel has risen above USD 200 per barrel, more than USD 105 above Brent and well above the USD 28 per barrel at which the spread traded this time last year. The premium reflects disrupted supply from Russia and Middle East refiners as well as limited regional refining capacity and Europe’s continued dependence on imported crude and products. Companies combining upstream production, trading operations and refining assets are therefore benefiting at several stages of the value chain.

European natural gas provides an equally dramatic example. EU gas is trading near USD 142 per barrel of oil equivalent, more than USD 45 above Brent and around eight times the prevailing US natural gas price. Europe’s shortage of indigenous supply and dependence on seaborne LNG, increasingly sourced from the US as Middle Eastern supplies remain close to offline, have created a substantial regional premium, handing a windfall to suppliers such as Equinor.

The performance gap therefore reflects more than a temporary rotation from technology into traditional energy. The Magnificent Seven are spending vast sums today to support earnings expected tomorrow. The Energy Seven are harvesting exceptional cash flow today from scarcity, elevated prices and infrastructure that already exists.

AI remains a powerful structural growth theme. However, its expanding requirement for electricity, natural gas, backup generation and grid infrastructure means some of its most immediate profits are accruing not only to those developing the technology, but also to those supplying the molecules and electrons needed to run it.

Related articles/content
1 Sept 2026: Commodity strength collides with higher interest rates 29 Aug 2026: COT on forex and commodities - Week to 25 August 2026 28 Aug 2026: From barrels to bushels and bullion as scarcity broadens the commodity rally 26 Aug 2026: Grains hit two-year high as war weather and logistics tighten supply 26 Aug 2026: From escalation to exit ramp why oils war premium is unwinding again 25 Aug 2026: Gold pauses after powerful four-day rally Daily podcasts hosted by John J Hardy can be found here

Related articles/content

1 Sept 2026: Commodity strength collides with higher interest rates
29 Aug 2026: COT on forex and commodities - Week to 25 August 2026
28 Aug 2026: From barrels to bushels and bullion as scarcity broadens the commodity rally
26 Aug 2026: Grains hit two-year high as war weather and logistics tighten supply
26 Aug 2026: From escalation to exit ramp why oils war premium is unwinding again
25 Aug 2026: Gold pauses after powerful four-day rally

Daily podcasts hosted by John J Hardy can be found here

More from the author
Ole S Hansen's articles on Saxo For market commentary and insights - not trading advice - follow me and join the conversation on Twitter and Substack

Topics: Commodities Crude Oil Gasoline Energy (Sector) Iran USA Technology En hurtig tanke

London Quick Take - 2 Sep - Risk assets under pressures as bond yields keep rising

Wed, 02 Sep 2026 06:18:00 Z

Note: This is marketing material. This article is not investment advice, capital is at risk.

Andy Burnham spoke to MPs in Parliament as PM for the first time yesterday. He must be cursing financial markets as the blowout in government bond yields - which is a global phenomenon - makes the arithmetic for his new Chancellor all the tougher ahead of the Budget at the end of October. There will be less fiscal headroom, less room to raise spending and no chance to borrow much more - the pressure to tackle a couple of sacred cows (like the triple lock) will grow. Crises can shift the Overton Window - the rapid rise in gilt yields is not a crisis yet but it could start to become one if it gets much worse and risks further undermining Britain's fiscal position just when it might need more room.

Bond yields keep going up and the pressure on risk assets ratchets up further. Fresh multi-year/multi-decade highs for government bond yields this morning reflect inflation expectations and fiscal policy risks with a fresh flareup in the Middle East layered on top. The escalation in the Middle East comes swiftly after the Federal Reserve chair, Kevin Warsh, sounded more hawkish than many had expected. Markets have started to lean towards a September rate hike, with implied odds for the Fed to raise rates by 25bps up to 70%. The dollar has firmed to a two-week high and rising real yields are pressing on gold, which slid to its lowest in almost a month.

There are lots of reasons for the blowout - the unclear fiscal outlook across developed countries and rising deficits, layered with a belief/fear that they just can't/won't stop spending like drunken sailors; (case in point) the US is running super-loose pro-cyclical fiscal stance with 6% deficit with economy at full employment; AI capex debt boom competing for demand and sucking capital away from government bonds; increased military spending, both real (the US needs to spend a lot more to replace what it spent in Iran) and expected (Europe is slowing piling into defence spending); a shift from price-insensitive buyers (institutions) of bonds to price-sensitive (private); rising inflation expectations both in near-term (war, supply disruptions) and longer term...due to fiscal dominance fears – that central banks keep policy rates lower (financial repression) to finance the ever-growing debt pile. There are fewer ways out... governments could get control of spending, and central banks could show unbreakable resolve to fight inflation through a more hawkish policy stance. The former is not going to happen without a political reset or crisis. The latter is considerably more feasible.

Eurozone flash headline inflation rose to 3.3% year-on-year in August from 2.9% in July, the highest in close to three years, driven mainly by energy. It cements a September rate hike by the European Central Bank, particularly as the Eurozone economy has held up so well in the teeth of the US-Iran war - Germany’s manufacturing PMI was revised up to 54.3, the strongest since May 2022, on stronger new and export orders.

Stock markets are entering September in a pretty standard fashion; with a selloff, one that often that leads into an October-to-yearend rally for equities. September is seasonally the worst month for US equities and I think the spike in bond yields will drive further losses before it stabilises. European markets faded early Wednesday by around 0.4% after steeper losses in Asia overnight with the Kospi -4% and and Nikkei -3%. Tuesday had seen the Nasdaq down -1% and S&P 500 decline -0.7%. Higher bond yields make duration equities like the entire tech complex less appealing. The risk is a doom loop for risk assets (sounds perhaps a bit mawkish but certainly could offer tactical entry points) as higher bond yields force selling of equities (particularly higher duration stocks like tech) as bonds don't act as a hedge, which in turn forces further liquidation/deleveraging.

Oil prices rose as the US and Iran traded a fresh round of military strikes, with Brent spiking to $97 before paring gains a touch to trade around $95, still a 5-week high. A deal could be in the offing at any point but at present it doesn't seem either side is desperate to back down. Brent crude prices nearing $100 is one thing – but we don’t use crude oil, we use refined products and it’s here – due to a lack of refining capacity and constrained supply of crude – where the stagflationary risks abound – diesel trades at $200 a barrel, effectively a 100% premium to a barrel of crude. Don't miss the Week Ahead here.

Neil Wilson

Investor Content Strategist

Saxo Bank

Topics: Equities United Kingdom Highlighted articles UKMustRead UK Generic Disclaimer FR US Actualites et Analyses Trump Version 2 - Investors Volatility investor TagFeed En hurtig tanke

Market Quick Take - Oil tops USD 95 and global bond yields reach multi-decade highs - 02 September 2026

Wed, 02 Sep 2026 05:50:00 Z

Market drivers and catalysts

Macro: Stocks and bonds slid as surging oil prices fan inflation and rate-hike fears
Equities: US and European equities fell as oil and yields rose, Asia sold off sharply as the same pressures intensified.
Digital Assets: Crypto equities bore the risk-off session while fund inflows kept building quietly
Commodities: Brent above USD 95 as gold drops to three-week low
Fixed Income: Global yields lifted again Tuesday and early Wednesday, in part on the latest sharp rise in crude oil prices.
Currencies: The Japanese yen weakened to a new local low before rising early Wednesday on hawkish BoJ rhetoric. NZD punched lower by RBNZ guidance.

Macro

Brent crude oil topped USD 95 after the US-Iran conflict escalated further as American forces launched fresh strikes and Tehran retaliated. President Trump also downplayed prospects for diplomacy, saying he was “not trying to force Iran to the bargaining table.” Traffic through the Strait of Hormuz remains sharply curtailed, although Treasury Secretary Bessent said 17 million barrels of crude transited on Monday, suggesting Iran does not control the waterway.
The Reserve Bank of New Zealand hiked its official cash rate 25 basis points to 2.75% as expected, but lowered its 2027 forecast for the policy rate, taking short-term NZ yields sharply lower. The New Zealand dollar weakened sharply in the wake of the decision.
European inflation accelerated. Eurozone flash headline inflation rose to 3.3% year-on-year in August from 2.9% in July, the highest in close to three years, driven mainly by energy. Core inflation was little changed, which in our view softens the print somewhat. Germany’s manufacturing PMI was revised up to 54.3, the strongest since May 2022, on stronger new and export orders, although supply-chain pressures worsened. UK house prices rose 1.6% year-on-year, up from 1.4% but below the 2.1% forecast.
US July JOLTS job openings rose to 7.27 million from a downwardly revised 7.18 million, slightly below the 7.31 million consensus, while layoffs fell, leaving what looks like a low-hire, low-fire labour market. The ISM manufacturing gauge eased to 54.6 versus 55.2 expected and 55.6 in July, with the New Orders index dipping to 53.7 versus 56.8 expected and 56.7 in July and the Employment index falling to 51.2 versus 52.5 expected and 52.8 in July.
More in our Macro Analysis & Macroeconomic News

Macro calendar highlights (times in GMT)

1215 – US ADP August Employment
1345 – Bank of Canada Rate Decision
1400 – US July Factory Orders
1430 – EIA’s Weekly Crude and Fuel Stocks Report
1800 – Fed Beige Book

Earnings events

Today: Broadcom, Snowflake, Hewlett Packard Enterprise, NetApp, Five Below
Thursday: Zscaler, Lululemon, Ciena, Samsara, DocuSign, Planet Labs

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

Equities

USA: The S&P 500 fell 0.7% to 7,631.47, the Nasdaq 100 dropped 1.3%, and the Dow fell 0.8% to 52,766.88, extending losses to a third session as higher oil prices and bond yields revived inflation and rate-hike concerns. Technology and consumer discretionary led declines while energy outperformed. CrowdStrike fell 6.9% as higher yields pressured growth software, while Micron lost 2.6% after unions representing most of its Taiwan workforce threatened strike action over bonuses. Apple bucked the selloff, rising 2.6% as John Ternus took over as chief executive from Tim Cook.
Europe: The Stoxx Europe 600 fell 0.6% to 647.46, the DAX lost 1.1%, the Euro Stoxx 50 declined 0.8%, and the FTSE 100 slipped 0.3% as rising oil prices, inflation and bond yields pressured equities and ended the Stoxx 600’s five-month winning streak. Partners Group dropped 7.3% after its CEO departure and weaker-than-expected performance income, while SAP fell 3.5% amid another analyst downgrade and concerns over its pace of AI monetisation. Novartis gained 6.3% after positive late-stage multiple-sclerosis trial data. Nokia and Engie will join the Euro Stoxx 50 on 21 September, replacing Volkswagen and Wolters Kluwer.
Asia: Asian equities fell sharply in Wednesday trading as renewed US-Iran strikes pushed oil and sovereign yields higher, deepening inflation and rate concerns. Japan’s Nikkei 225 was down around 3.0%, South Korea’s Kospi fell 3.5%, the Hang Seng slipped 0.8% and the Shanghai Composite lost 0.9%, with technology among the weakest areas. SoftBank Group fell 6.3% as Japanese technology shares sold off, while Samsung Electronics and SK Hynix also weighed heavily on Seoul. The reversal from Tuesday’s more resilient session put oil prices, bond yields and expectations for further central-bank tightening firmly back at the centre of the market.
More in our Equity Trading - Stock Market Analysis & News

Digital Assets

Listed crypto took the brunt of the risk-off session while the coins held up better. Circle fell 7.1% and BitMine 7.7%, with Coinbase down 6.8% and Strategy 6.1%, although IREN was close to unchanged. Bitcoin has since eased toward USD 77,000 in Asian hours.
Fund flows kept moving the other way. US spot ether funds extended a net-inflow run to eleven sessions, and spot bitcoin funds took in USD 217 million on Monday. The Senate vote on the US Crypto Clarity Act is still outstanding after it missed the 60-vote threshold before the recess.

Commodities

Oil: WTI topped USD 92 a barrel and Brent USD 97 earlier in the session before retracing slightly, reaching their highest levels since late July after the US struck two Iranian government vessels, apparently as part of a new “tanker-for-tanker” policy aimed at deterring Iran from attacking ships transiting Hormuz. Iran retaliated against Jordan, Bahrain and Kuwait, which host American forces. Disruption fears remain the key price driver as commercial vessel traffic through the Strait remains curtailed. European gas prices also surged to a three-year high. Meanwhile, the API reported a weekly drop in US crude stocks, the first in five weeks if confirmed by the EIA later.
Precious metals: Precious metals remain on the defensive, extending recent declines as renewed oil price gains stoke inflation risks, pushing up bond yields while raising Fed rate-hike expectations. Meanwhile, India’s Modi urged Indians to avoid buying gold unless necessary as a widening trade deficit and weaker rupee strain the economy. A USD 414 top-to-bottom slump over the past week has wiped out gold’s gains following Bessent’s Treasury buyback announcement, forcing some recently established longs to exit. For now, gold’s inverse correlation with rising oil prices and bond yields remains the main focus, sidelining other potentially supportive drivers.
Agriculture: US grain futures turned lower on Monday following a three-week surge that drove the BCOM Grains Index to a 12.3% gain last month amid escalating attacks on Black Sea ports and vessels and global heat waves threatening output. While the supportive fundamental outlook remains intact, record hedge-fund buying has, within weeks, transformed the sector from underowned to a crowded long, leaving prices increasingly exposed to any deterioration in the technical or fundamental setup.
More in our Commodity News, Analysis & Commentary

Fixed Income

Global bond yields continued rising Tuesday and early Wednesday, in part on the sharp fresh rise in oil prices as the Strait of Hormuz situation escalated again. The benchmark US 2-year Treasury yield rose more than five basis points Tuesday to a new high since early 2025 at 4.40%, while the benchmark 10-year Treasury yield lifted as high as 4.81% after rising Monday above the key 4.75% level for the first time since January 2025. The next focus is 5.00%, a level that only traded briefly in late 2023 since 2007.
Japan’s short-term yields rose sharply on BoJ rhetoric and as US Treasury Secretary Bessent was seen encouraging further BoJ action on the sidelines of the G20 summit of central-bank and finance heads in North Carolina. Bank of Japan Governor Ueda hinted at a September rate hike and known hawkish BoJ member Takata also weighed in with comments supporting more policy tightening. The benchmark 2-year JGB yield rose more than five basis points to a new 31-year high of 1.85%. The 10-year JGB yield rose over three basis points Wednesday before dropping back more than two basis points to trade near 3.01% in late trading in Tokyo as Japan’s yield curve flattened.

Currencies

The US dollar firmed slightly, but volatility remains extremely muted, likely as traders mull the risk of USDJPY intervention as that pair wandered to a new one-month high near 160.39 before Bank of Japan Governor Ueda hinted at a September rate hike and BoJ hawk Takata weighed in with hawkish comments. This sent USDJPY back below 160.00 by early trading Wednesday in Europe, even as EURUSD traded near the low of the 24-hour and two-week range at 1.1580.
EURCHF rose to a new high for the year, trading just above the previous high-water mark of 0.9410, with the rise in global bond yields to new cycle highs the likely driver as the SNB maintains a zero-interest-rate policy for now.
The New Zealand dollar fell sharply after the Reserve Bank of New Zealand’s decision to hike the policy rate 25 basis points to 2.75%, as expected, as the bank said that further tightening was likely, but with the timing uncertain. The policy committee’s average forecast of the RBNZ policy rate for Q1 2027 fell slightly to 2.96% from 3.0% previously. NZDUSD fell from just below 0.5900 before the decision to as low as 0.5826, while AUDNZD rose sharply to 1.2233 from 1.2125, taking the exchange rate back within a stone’s throw of the 13-year high of 1.2288 from earlier this year.
More on currencies in our dedicated section: Forex Trading News & Analysis

Saxo Bank

Higher rates are back: The winners and losers of 5% bond yields

Wed, 02 Sep 2026 04:30:00 Z

Key points:

Cash flow matters more when money is expensive: Companies with strong free cash flow, low leverage and limited refinancing needs are better placed to keep investing and returning capital even when borrowing costs stay high.
Higher rates create clear winners and pressure points: Quality financials, energy, commodities and defensive sectors can prove more resilient, while small caps, property, consumer discretionary and long-duration growth face a higher funding or valuation hurdle.
The reason rates are high still matters: Strong growth can support financials and commodities, while inflation shocks or fiscal stress are more challenging for equities broadly. Higher rates call for selectivity, not simply abandoning risk.

Markets are once again facing higher bond yields across the US and other major economies, raising a tougher question for equity investors: how much should they be willing to pay for stocks when safer assets are offering more attractive returns? Higher yields also matter because they raise the discount rate used to value future earnings, putting pressure on equity multiples — especially for companies whose profits sit further into the future.

But equities still play an important role in protecting purchasing power and capturing long-term growth, especially in an environment where inflation remains a risk. The challenge is finding businesses that can continue delivering earnings and cash flows even when the cost of capital stays elevated.

For investors, that puts cash flow, balance-sheet strength and refinancing needs back at the centre of stock selection. Higher rates can favour businesses generating strong cash flows today, while raising the hurdle for companies whose valuations, growth or business models depend heavily on expensive financing.

What can withstand higher rates?

1. Cash-rich quality

Strong cash generation, low refinancing needs and the ability to fund growth internally can become increasingly valuable as borrowing costs rise. Companies with strong balance sheets are generally less exposed to refinancing pressure and can continue investing even when capital becomes more expensive.

However, strong balance sheets do not eliminate valuation or company-specific risks, and highly valued quality companies can still be vulnerable if earnings disappoint or bond yields rise further.

Illustrative company examples: Microsoft, Alphabet, Meta, Apple, Broadcom, Visa, Mastercard

Illustrative examples of ETFs providing exposure to this theme: iShares MSCI USA Quality Factor ETF (QUAL)

2. Quality financials

Higher rates can support interest income and reinvestment yields, particularly for well-capitalised banks and insurers. Market volatility can also support exchanges and trading businesses. Companies with stronger balance sheets and diversified revenue streams may be better positioned than the financial sector as a whole.

At the same time, persistently high rates can weaken credit quality, raise funding costs and increase loan losses, so the impact is not uniformly positive across financial companies.

Illustrative company examples: JPMorgan, Bank of America, Goldman Sachs, Berkshire Hathaway, Chubb, DBS

Examples of ETFs providing exposure to this theme: Financial Select Sector SPDR Fund (XLF), SPDR S&P Insurance ETF (KIE)

3. Energy and commodity producers

Commodity producers can benefit when higher rates are being driven by stronger nominal growth, inflation, supply constraints or geopolitical risks. They can also provide diversification when rising commodity prices are themselves contributing to persistent inflation.

However, commodity equities can be highly volatile and remain sensitive to global growth, commodity prices, regulation and geopolitical developments. A global slowdown accompanied by elevated rates would be considerably less supportive.

Illustrative company examples: Exxon Mobil, Chevron, Shell, TotalEnergies, BHP, Rio Tinto, Freeport-McMoRan

Illustrative examples of ETFs providing exposure to this theme: Energy Select Sector SPDR Fund (XLE), Commodities Select Strategy ETF (COMT), Invesco Bloomberg Commodity UCITS ETF (CMOD)

4. Healthcare and defensive cash flows

Healthcare demand is relatively insensitive to interest rates and the economic cycle. Large pharmaceutical and healthcare companies with strong cash generation may therefore offer relatively resilient earnings if higher rates begin to slow economic growth.

Defensive demand does not remove company-specific risks, including drug-pipeline failures, patent expiries, pricing pressure, regulation and potentially demanding valuations.

Illustrative company examples: Eli Lilly, Johnson & Johnson, Novartis, Roche, Sanofi, AstraZeneca

Examples of ETFs providing exposure to this theme: iShares Global Healthcare ETF (IXJ), Health Care Select Sector SPDR Fund (XLV)

5. Consumer staples and pricing power

Higher rates may eventually slow household spending, but demand for everyday essentials tends to be more stable. Companies with strong brands, recurring demand and pricing power may be better able to maintain cash generation as financing conditions tighten.

However, staples can still face margin pressure from higher input costs, weaker consumer demand and valuation risk, particularly when defensive sectors trade at elevated multiples.

Illustrative company examples: Procter & Gamble, Coca-Cola, PepsiCo, Walmart, Costco, Colgate-Palmolive, Nestlé

Illustrative examples of ETFs providing exposure to this theme: Consumer Staples Select Sector SPDR Fund (XLP), Vanguard Consumer Staples ETF (VDC)

Note: The securities mentioned are provided for illustrative and educational purposes only and should not be considered investment recommendations. Investors should assess individual securities based on their own objectives, risk tolerance and circumstances.

Where are the vulnerabilities?

1. Small caps and highly leveraged companies

Smaller companies often have less access to capital markets and greater reliance on bank loans and shorter-duration borrowing. Refinancing therefore becomes more painful when interest rates remain elevated.

Not every small-cap company is highly leveraged, and companies with strong balance sheets can still outperform. But as a group, smaller companies generally face a higher funding hurdle than large cash-rich businesses.

Illustrative examples of ETFs providing exposure to this theme: iShares Russell 2000 ETF (IWM), SPDR Portfolio S&P 600 Small Cap ETF (SPSM)

2. Rate-sensitive property and housing

Property is one of the clearest areas where higher rates transmit directly into the economy.

For REITs and property companies, higher rates raise refinancing costs and make bond yields more competitive with property income. For homebuilders, elevated mortgage rates can reduce housing affordability and demand.

Strong rental growth, housing shortages and well-managed balance sheets can still offset some of these pressures, so selectivity matters.

Illustrative examples of ETFs providing exposure to this theme: Vanguard Real Estate ETF (VNQ), iShares U.S. Real Estate ETF (IYR), SPDR S&P Homebuilders ETF (XHB), iShares U.S. Home Construction ETF (ITB)

3. Consumer discretionary

Higher mortgage, auto-loan and credit-card rates reduce disposable income and make consumers more cautious about large or optional purchases. The pressure tends to be greatest for lower-income consumers and businesses dependent on financed purchases.

Not all discretionary spending suffers equally: affluent consumers and companies with strong brands can remain resilient even when rates are high.

Illustrative examples of ETFs providing exposure to this theme: Consumer Discretionary Select Sector SPDR Fund (XLY)

4. Long-duration and speculative growth

Higher interest rates raise the discount rate applied to future earnings. That matters most for companies where much of today's valuation depends on profits expected many years from now.

The pressure can be even greater for businesses that are still burning cash and need external funding to grow.

Illustrative examples of ETFs providing exposure to this theme: ARK Innovation ETF (ARKK), Roundhill Space & Technology ETF (MARS)

This is also where the distinction between profitable AI leaders and speculative AI stories becomes increasingly important. High rates do not necessarily hurt technology; they raise the bar on valuation and profitability.

5. Emerging markets with funding pressure

Persistently high US yields can support the dollar and increase financing costs for governments and companies reliant on dollar funding. Markets with large external borrowing requirements can therefore become more vulnerable when global liquidity tightens.

But emerging markets should not be treated as one trade. Commodity exporters, countries with high real yields and economies with strong current-account positions can prove considerably more resilient.

Illustrative examples of ETFs providing exposure to this theme: iShares MSCI Emerging Markets ETF (EEM), iShares MSCI Emerging Markets Small-Cap ETF (EEMS), iShares J.P. Morgan USD Emerging Markets Bond ETF (EMB)

Note: The securities mentioned are provided for illustrative and educational purposes only and should not be considered investment recommendations. Investors should assess individual securities based on their own objectives, risk tolerance and circumstances.

The bigger message

The key divide in a higher-rate environment is not simply growth versus value or cyclicals versus defensives.

It is increasingly: Cash generators vs. cash borrowers.

Companies with strong free cash flow, manageable debt and pricing power can continue investing even when capital becomes expensive. Businesses dependent on refinancing, cheap mortgages or profits far into the future face a much tougher hurdle.

Higher rates do not mean abandoning equities. They mean being more demanding about what you own.

Topics: Equities Theme Category - Equities Macro Commodities Theme Category - Commodities Crude Oil Gas Oil Heating Oil Oil Oil and Gas Theme - Oil and gas majors Theme - Big pharma Consumer Technology Technology UK Portfolio Ideas

Shein finally goes public. Now comes the harder test

Tue, 01 Sep 2026 11:30:00 Z

Key takeaways

Shein’s advantage comes from testing tiny product batches and scaling winners quickly, not simply from selling cheap clothes.
New tariffs, parcel fees and regulation are making that model more expensive and harder to reproduce across markets.
Inditex and H&M show why brand, inventory discipline and distribution can matter more than pure speed.

Shein taught fashion to behave a little like a social-media feed: test something, watch the reaction, then produce more of what people click on.

On 1 September 2026, the China-founded, Singapore-headquartered retailer finally reached the Hong Kong stock market after failed attempts to list in New York and London. Its initial public offering (IPO) valued the company at roughly USD 26.5 billion, far below the near USD 100 billion valuation reached in 2022. Shares traded below the offer price during their first session.

For investors, the question is not whether Shein can still sell a lot of clothes. It is whether the machinery behind those sales remains as powerful when its regulatory and cost advantages start to fade.

The business model is the product

Shein’s real innovation sits behind the screen.

Traditional fashion retailers often decide months ahead what to sell and in what quantities. Shein instead launches designs in batches as small as 100 to 200 items, watches demand in real time and quickly reorders the products that work.

That can reduce unsold stock and lets Shein offer huge variety without committing as much money upfront. In simple terms, Shein tries to make demand first and inventory second.

But part of this machine was built around cheap cross-border shipping from China. The United States has removed an important duty exemption for low-value packages, while the European Union introduced a EUR 3 fee on many low-value e-commerce parcels in July.

Those changes do not destroy Shein’s model. They make it less frictionless. Local warehouses and production can reduce tariff exposure, but also add cost and complexity. The test is whether Shein can preserve its speed while becoming a more conventional global retailer.

Zara and H&M are slower, but harder to dismiss

This is where Europe’s established fashion groups become useful comparisons.

Inditex owns Zara and combines stores, online sales, tight inventory control and frequent product refreshes. Its first-quarter 2026 results showed sales growth and stronger gross profitability.

H&M is in a different position. Sales have been softer, but the Swedish group has improved profitability and reduced inventory. Its latest results show that better stock management and cost control can still create value when revenue barely moves.

Neither company can match Shein’s endless digital assortment. But speed is not the only useful measure.

Inditex and H&M have established brands, physical distribution and long operating histories. They have already navigated fashion cycles, recessions and competitive shifts. Shein now has to prove that its newer model can survive a similar test.

The hidden cost of becoming normal

The IPO gives Shein capital, visibility and a public valuation. It also removes some of the mystery.

Investors can now watch whether growth returns, margins recover and higher logistics costs eat into each order. The old private-market valuation matters much less than what the business can earn under today’s rules.

The risks are visible. Regulation could make ultra-cheap cross-border fashion more expensive. Competition from Temu, Zara and H&M could push marketing costs higher. Governance also deserves attention because Shein’s founders retain overwhelming voting control after the listing.

Early warning signs include weaker repeat purchases, rising fulfilment and marketing costs, lower margins, or evidence that localising production makes the supply chain less efficient.

Investor playbook

Compare growth with the cost required to produce it. Faster sales matter less if fulfilment and marketing costs rise faster.
Watch inventory and margins together. Strong retailers sell the right products without relying heavily on discounts.
Treat regulation as part of the business model. An advantage built on exemptions is less durable when those exemptions disappear.
Compare Shein with Inditex and H&M on durability, not only growth.

Speed was never the whole moat

Shein’s story began with speed. It could spot a trend, test it cheaply and scale the winners before traditional retailers had finished planning the season. The IPO does not make that advantage disappear, but it changes the question investors need to ask. The contest is no longer about who can move fastest under the old rules.

It is about who can keep moving when the rules, costs and expectations become tougher. Inditex and H&M show that slower systems can still create durable economics through brand, inventory discipline and distribution. Shein now has to prove that its digital engine can do the same. A fashion feed can refresh every second. A listed company has to compound for years.

Topics: Equities Highlighted articles UKMustRead Initial Public Offering (IPO)

Commodity strength collides with higher interest rates

Tue, 01 Sep 2026 11:00:00 Z

Key Points:

Commodities are complicating the inflation fight: Renewed strength across energy and agriculture is keeping inflation pressures elevated just as Fed Chair Kevin Warsh’s hawkish Jackson Hole speech has revived expectations for further US monetary tightening.
Global bond yields are flashing monetary and fiscal warnings: The US yield curve has bear-steepened, with the 10-year Treasury yield above 4.75%, while German and Japanese yields have reached multi-decade highs amid concerns about inflation, heavy government borrowing and debt sustainability.
Investment metals face a three-pronged headwind: Gold and silver have corrected lower as higher rate expectations, rising yields and a stronger dollar weigh on demand, although longer-term support from fiscal concerns, debasement risks and central-bank buying remains intact.
Industrial metals continue to defy macro headwinds: Supply tightness is partly offsetting the stronger dollar and higher borrowing costs, with zinc reaching a four-year high while copper holds firm near record levels.

Global markets have entered September facing an increasingly uncomfortable combination of rising commodity prices, sticky inflation, higher interest-rate expectations and concerns about government debt sustainability. Commodities sit near the centre of this tension, with renewed strength across energy and agriculture adding to inflation pressures just as central banks signal borrowing costs may need to remain elevated, or even rise further.

The shift accelerated following Federal Reserve Chair Kevin Warsh's hawkish Jackson Hole speech on Friday. His renewed focus on restoring price stability prompted markets to increase expectations for further monetary tightening, pushing US yields and the dollar higher.

The move has since broadened beyond the immediate repricing of Fed policy. The US Treasury curve has bear-steepened, with the 10-year yield reaching 4.79%, its highest since January 2025. The selloff has also become global, with Germany's 10-year Bund yield reaching a 15-year high above 3.35%, while Japan's equivalent has reached 3% for the first time in more than three decades.

At the front end, higher yields primarily reflect expectations for tighter monetary policy. Further out, investors are also demanding increased compensation for inflation uncertainty, heavy sovereign issuance and mounting fiscal risks. With US government debt having reached USD 40 trillion, rising borrowing costs risk becoming an increasingly important part of the macroeconomic story.

The commodities driving inflation continue to rise

Tighter financial conditions have so far done little to contain several of the commodity markets contributing most directly to inflation. Since Jackson Hole, the Bloomberg Commodity Total Return Index has risen further, led by energy, grains and soft commodities, while precious metals have fallen. Put simply, the commodities creating the inflation problem have continued higher, while those traditionally bought to protect against its consequences have retreated.

Energy remains the most immediate source of pressure. Crude oil has risen for a second session after renewed US-Iran hostilities raised concerns about prolonged disruptions to flows through the Strait of Hormuz. Brent has moved back above USD 92 per barrel, while already tight refined-product markets remain particularly exposed.

In Europe, gasoil futures, the benchmark for diesel and jet fuel, trade above USD 183 per barrel, while natural gas has reached EUR 71.5/MWh, equivalent to roughly USD 24.3/MMBtu and more than eight times the US price. These elevated costs highlight Europe's continued dependence on imported energy and vulnerability to supply disruptions.

Diesel's inflation impact extends well beyond transport into freight, agriculture, mining, construction and industrial production, while expensive natural gas raises electricity and manufacturing costs. This represents a supply-driven inflation shock that monetary policy cannot directly resolve. Central banks can suppress demand, but they cannot produce additional crude oil, refining capacity or natural gas.

In simple terms, the commodities creating the inflation problem have continued higher, while the commodities traditionally bought to protect against its consequences have fallen.

Food adds a second inflation front

The Bloomberg Commodity Agriculture Total Return Index ended August at a 14-year high after surging 12.4% during the month. Strong gains across grains and soft commodities, led by sugar, wheat and corn, more than offset weakness in livestock. Weather disruptions are affecting crops around the world, while renewed fighting between Russia and Ukraine has targeted critical export infrastructure around the Black Sea. With the region accounting for more than a quarter of global wheat exports, supply concerns have helped lift wheat prices towards a three-year high.

Unlike energy, where higher prices feed relatively quickly into headline inflation, rising agricultural costs often take longer to reach consumers through processing, transportation and retail channels. The latest rally therefore raises the risk that food inflation remains elevated even if energy prices eventually stabilise. Together, energy and agriculture leave central banks facing a difficult trade-off: inflation is being supported by supply constraints and geopolitical disruption, while tighter monetary policy risks putting additional pressure on economic activity and already stretched government finances.

Investment metals feel the heat

Precious metals have taken the brunt of the monetary repricing. Gold and silver have both fallen by more than 4% since Friday as Warsh's speech produced three immediate headwinds: higher short-term rate expectations, rising real and nominal yields, and a stronger US dollar.

The dollar has retained much of its post-Jackson Hole strength, while breaks below key technical support levels have triggered additional long liquidation from momentum-focused traders. Higher yields increase the opportunity cost of holding non-interest-bearing assets, while a stronger dollar raises their cost for non-US investors.

However, the longer-term implications are less straightforward. Higher real rates driven by a credible inflation-fighting central bank are normally negative for gold. Higher long-term yields increasingly driven by concerns about debt sustainability, heavy sovereign issuance and fiscal credibility are a different matter.

Persistently rising debt-servicing costs may eventually increase pressure on policymakers to prevent long-term borrowing costs from rising indefinitely. Gold therefore remains caught between two opposing forces: the immediate cost of money and longer-term concerns about the quantity and credibility of money. Continued central-bank demand and reserve diversification provide another structural source of support that is less sensitive to short-term changes in US rates.

Industrial metals defy the stronger dollar

Interestingly, weakness in investment metals has not spread meaningfully to industrial metals. Ordinarily, a stronger dollar, higher yields and rising funding costs would represent a challenging combination for cyclically sensitive metals. Instead, persistent supply-side turbulence continues to offset concerns about demand and tighter financial conditions.

Zinc has become the latest example, rising towards USD 4,000 per tonne on the LME and reaching its highest level since May 2022. Falling refined inventories outside China, constrained raw-material availability and tight positioning have supported the rally.

Copper has also remained resilient after recently reaching record levels, with LME copper holding above USD 14,000 per tonne. Tight nearby availability and large volumes being pulled towards the US continue to support prices, while backwardation in both copper and zinc signals physical tightness.

Supply challenges were highlighted by the latest production update from Chile, where statistics agency INE said output in the world's largest copper-producing country fell 9.4% year-on-year in July after severe storms struck mining regions. The divergence between precious and industrial metals underlines that the current commodity rally is not simply a monetary phenomenon. Where physical availability is sufficiently tight, supply constraints continue to override macroeconomic headwinds.

An increasingly difficult policy mix

The coming weeks may determine which of these forces dominates. Further strength in oil, refined products and food could keep inflation expectations elevated and reinforce expectations for additional monetary tightening. That would remain a near-term headwind for gold and silver while potentially weighing on broader risk appetite and commodity demand.

At the same time, higher policy rates and rising long-term yields increase borrowing costs across economies already carrying historically large debt burdens. The longer rates stay elevated, the greater the fiscal strain and the stronger the potential focus on debt sustainability, currency debasement and eventual policy intervention.

Commodities are therefore caught between rising rates and rising inflation, but the pressures are far from uniform. Energy and agriculture continue to benefit from scarcity and geopolitical disruption, industrial metals remain supported by tight supply, while gold and silver are temporarily paying the price for tighter monetary conditions and a stronger dollar.

The paradox is that if rising commodity prices force interest rates higher for longer, the resulting pressure on heavily indebted governments could eventually revive the fiscal and debasement concerns that have been among the strongest structural drivers of investment demand for precious metals.

Commodities post Jackson Hole - Source: Bloomberg & Saxo Note: Past performance is not indicative of future results

Gold being weighed down by rate hike expectations and rising bond yields - Source: Bloomberg, Saxo

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29 Aug 2026: COT on forex and commodities - Week to 25 August 2026
28 Aug 2026: From barrels to bushels and bullion as scarcity broadens the commodity rally
26 Aug 2026: Grains hit two-year high as war weather and logistics tighten supply
26 Aug 2026: From escalation to exit ramp why oils war premium is unwinding again
25 Aug 2026: Gold pauses after powerful four-day rally

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Topics: Commodities Crude Oil Gasoline Energy (Sector) Iran USA Agriculture Gold Silver Copper Corn Wheat Sugar

Global yield breakout dominates market focus.

Tue, 01 Sep 2026 09:04:00 Z

Japan's JGB's hit 30-year high yield.

Listen to the full episode now or follow the Saxo Market Call on your favourite podcast app.

Questions and comments, please!

Saxo Market Call

Saxo Bank

Topics: Podcast Highlighted articles Forex

Market Quick Take - Renewed Iran strikes lift crude while the US 10-year tops 4.75% - 01 September 2026

Tue, 01 Sep 2026 06:00:00 Z

Market drivers and catalysts

Macro: Stocks fall as higher oil prices and rising global bond yields weigh on markets
Equities: US and European stocks fell as oil and yields rose, Asian markets weakened, with Shein sliding on its Hong Kong debut.
Digital Assets: Crypto equities snapped back hard while the coins themselves barely moved overnight
Commodities: Crude rises on supply risks; gold steadies after two-session retreat; agriculture hits fresh multi-year high
Fixed Income: US 10-year yield clears 4.75% for first time in 19 months. The 10-year German Bund yield hits 15-year high. Japan’s 10-year JGB yield hit a 30-year high.
Currencies: USD volatility muted, JPY and CHF weak on rising global bond yields.

Macro

US and Iran resumed hostilities. US forces struck Iranian launchers and President Trump threatened Kharg Island, while Iran retaliated against the UAE and Jordan. Crude still transits the Strait of Hormuz despite a supertanker fire caused by naval mines, and Russian strikes on refineries appear to be tightening global refining capacity and lifting fuel margins.
Washington leaned on the Bank of Japan. US Treasury Secretary Bessent reportedly told Governor Ueda and Finance Minister Katayama at the G20 in North Carolina that Japan's next move should be a rate hike, adding that he expects a stronger yen once the central bank and the government act.
European inflation firmed while US survey data improved. German inflation rose to 2.9% in August, a four-month high just under the 3.0% consensus, with energy inflation at 10.5% and core steady at 2.4%. UK shop price inflation climbed to 1.5% from 0.9%, the highest since February 2024. The Dallas Fed Texas manufacturing index jumped to 11.6 from 1.3, its best since January 2025.
The week's calendar starts today. US ISM manufacturing is expected at 55.2 against 55.6 previously, alongside JOLTS job openings and construction spending. August payrolls land on Friday 4 September, into a market now pricing a September Fed hike.
More in our Macro Analysis & Macroeconomic News

Macro calendar highlights (times in GMT)

0600 – UK Aug. Nationwide House Prices
0900 – Eurozone Flash Aug. CPI
1345 – US Aug. ISM Manufacturing
1400 – US July Construction Spending
1400 – US July JOLTS Job Openings
0130 – Australia Q2 GDP
0200 – New Zealand RBNZ Official Cash Rate

Earnings events

Tuesday: Palo Alto Networks, Medtronic, MongoDB, Credo Technology, NIO, GitLab, Dell Technologies
Wednesday: Broadcom, Snowflake, Hewlett Packard Enterprise, NetApp, Five Below
Thursday: Zscaler, Lululemon, Ciena, Samsara, DocuSign, Planet Labs

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

Equities

USA: The S&P 500 fell 0.3% to 7,686 on Monday, its second straight decline, while the Dow dropped 0.7% to 53,186 and the Nasdaq 100 edged up 0.1%. Rising oil prices and Treasury yields pressured most sectors as renewed US-Iran tensions revived inflation concerns. Amazon fell 2.5% after the Federal Trade Commission sued over alleged ad-pricing practices, while Edison International plunged 23.1% after California wildfire legislation disappointed utilities. Nvidia gained 1.5% after committing $3.5 billion to MediaTek. Investors now turn to this week’s labour data for clues on whether the Federal Reserve could raise rates in September.
Europe: The Stoxx 600 fell 0.6% to 651, the Euro Stoxx 50 dropped 1.0% to 6,420 and Germany’s DAX lost 1.2% to 26,258 as higher oil prices and bond yields weighed on risk appetite. London was closed for the Summer Bank Holiday, leaving trading volumes unusually light. ASML fell 2.9% as rate-sensitive technology weakened, while Siemens Energy dropped 5.0%. Energy names moved the other way as Brent traded above $90, with Eni up 2.3% and TotalEnergies gaining 1.2%. Investors now watch euro-area inflation data as markets weigh the risk of another European Central Bank rate increase.
Asia: Asian equities traded lower on Tuesday as oil above $90 and rising global bond yields revived inflation concerns. Around midday, Japan’s Nikkei was down 0.4%, Hong Kong’s Hang Seng fell 1.0%, South Korea’s Kospi hovered near flat after an early drop, and China’s CSI 300 was little changed. MediaTek surged 9.9% to its daily limit after Nvidia’s $3.5 billion investment deepened their AI-chip partnership, while Shein fell about 8.0% on its Hong Kong debut after raising $1.7 billion at a roughly $26.5 billion valuation. The weak debut highlighted investor caution toward consumer growth stories as AI and semiconductor names continue to attract stronger demand.
More in our Equity Trading - Stock Market Analysis & News

Digital Assets

Listed crypto rebounded sharply from Friday's slide. Circle led at 9.65%, with BitMine 6.39% higher, Coinbase 5.31%, IREN 4.70% and Strategy 4.42%, while the spot bitcoin and ether funds each added close to 2%. Deribit’s DVOL eased to 37.41, which in our view leaves implied volatility near the lower end of its recent range.
On the structural side, the US Crypto Clarity Act fell short of the 60 votes needed before the August recess, pushing the earliest new vote to mid-September. Thailand's regulator is consulting on draft spot bitcoin and ether fund rules until 20 September.

Commodities

Precious metals: Gold and silver remain challenged by another rise in global bond yields to their highest in almost two decades, as rising oil and food prices stoke inflation concerns that could force central banks to raise rates, increasing the funding cost of holding non-interest-bearing assets. These headwinds are being partly offset by investors seeking protection in hard assets amid concerns over elevated and rising government debt levels, and the increased cost of servicing this debt. Gold has so far retraced only 38.2% of its August rally, which in technical terms is considered a relatively shallow correction within an established uptrend. For that picture to change, prices would need to break below a band of support in the USD 4,200–4,240 area. Conversely, a move back above the 200-day moving average could attract renewed demand on the view that the latest correction has run its course.
Oil: Crude rose for a second session as fresh hostilities between the US and Iran raised concerns about prolonged disruptions to energy flows through the Strait of Hormuz. Brent traded back above USD 91 after US forces struck an island in the Strait, prompting Iran to retaliate with attacks on the UAE and Jordan.
European energy: European diesel prices rose to USD 181 per barrel, while natural gas climbed to EUR 70.6/MWh, equivalent to around USD 24/MMBtu and more than eight times the US price. The widening energy cost gap highlights Europe’s dependence on imports and its vulnerability to supply disruptions, given limited local production and limited refinery capacity.
Agriculture: The BCOM Agriculture Total Return Index ended August at a 14-year high after surging 12.4% during the month. Strong gains across grains and soft commodities, led by sugar, wheat and corn, more than offset a monthly decline in livestock after President Trump moved to allow increased imports of foreign beef in an effort to curb elevated domestic prices.
More in our Commodity News, Analysis & Commentary

Fixed Income

The US Treasury yield curve continued to lift, this time in a bear-steepening move as long-dated Treasury yields rose faster than yields at the front of the curve, as the market remains unsure how aggressively to price in Fed policy tightening after Fed Chair Warsh’s hawkish speech on Friday. The benchmark 2-year yield rose back to Friday’s highs near 4.36% Monday, just a basis point shy of the 4.37% high from July, which is the highest level since February 2025. The benchmark 10-year Treasury yield rose above 4.75% for the first time this year and since January 2025, trading at 4.78% early Tuesday.
Global bond yields all rose on Monday, many to multi-year highs. The benchmark German 10-year Bund yield rose more than four basis points to above 3.32%, a 15-year high. Japan’s benchmark 10-year JGB yield lifted more than four basis points to trade above 3.00% for the first time in over 30 years.

Currencies

The US dollar traded sideways to slightly lower Monday even as US Treasury yields continued to rise in the wake of Friday’s hawkish speech from Fed Chair Kevin Warsh. EURUSD rose as high as 1.1625 early Tuesday before drifting back toward 1.1600, while USDJPY rose back above 159.80 after lows near 159.50 on Tuesday.
The Swiss franc dipped to an almost two-week low versus the euro, as EURCHF pulled toward 0.9400 early Tuesday, with the cycle and 12-month high from early August at 0.9411, as global bond yields rose, encouraging carry traders funding in francs.
More on currencies in our dedicated section: Forex Trading News & Analysis

Saxo Bank

Higher oil = higher energy? It’s not that simple

Tue, 01 Sep 2026 03:00:00 Z

Key points:

Energy is becoming more relevant in portfolios again. Middle East disruption has revived the role of energy as a geopolitical and inflation hedge, while Venezuela shows how the global supply map can also evolve.
Energy is not one trade. Oil producers, refiners, pipelines, LNG, power generators and grid companies sit at different points of the value chain and respond to very different drivers.
The longer-term opportunity is broadening beyond traditional hydrocarbons. EVs challenge road-fuel demand, but AI, electrification, LNG, nuclear and grid investment are creating another energy investment cycle.

Why energy matters again

Energy is back on investors’ radar for two very different reasons.

The first is geopolitics. Renewed tensions in the Middle East and disruption around the Strait of Hormuz have brought energy security and inflation risks back into portfolio discussions. Supply shocks can push oil higher even when underlying global demand is mediocre.

But there is another side to that story. Venezuela is reopening to more foreign investment and could gradually increase production. It will not replace disrupted Middle Eastern barrels overnight — infrastructure, heavy crude and execution remain constraints — but it shows how higher prices and changing geopolitics can eventually bring new supply back to market.

The second force is structural. The world is consuming energy differently.

EVs are reducing demand for petrol and diesel, but they also increase electricity consumption. AI data centres, manufacturing and cooling are adding another layer of power demand just as electricity grids in many economies are already struggling to keep up.

This creates an unusual backdrop: the long-term outlook for oil demand is becoming less certain at exactly the same time that investment needs across the broader energy system are rising.

For investors, the important question is therefore not simply whether oil goes up or down. It is where scarcity is developing across the energy value chain.

The energy value chain: what are you actually investing in?

A $10 move in crude does not affect every energy company in the same way. Understanding where a company sits in the value chain is critical.

Oil and gas producers: owning the commodity

Upstream companies explore for and produce oil and natural gas. ConocoPhillips, EOG Resources and Occidental Petroleum are examples.

They provide some of the most direct equity sensitivity to commodity prices. Once production costs are covered, higher prices can translate into disproportionately stronger cash flows.

The main drivers are oil and gas prices, production costs, reserve quality and capital discipline.

Integrated majors: diversifying across the chain

ExxonMobil, Chevron, Shell and TotalEnergies combine upstream production with refining, LNG, chemicals and trading.

That diversification generally makes earnings less sensitive to a single commodity than pure producers and can provide greater cash-flow resilience across different market environments.

Oilfield services: the capex trade

SLB, Halliburton and Baker Hughes supply drilling technology, equipment and services to producers.

Their key driver is not today's oil price but producer capital expenditure.

A temporary geopolitical spike may change very little. But if prices remain high enough for long enough to encourage new fields and additional drilling, oilfield services can become a major second-order beneficiary.

Midstream and LNG: moving and storing energy

Williams, Kinder Morgan and Enbridge own pipelines, processing plants and storage infrastructure.

Their revenues tend to depend more on volumes and long-term contracts than on the daily commodity price, giving them more infrastructure- and income-like characteristics.

LNG extends this chain. Liquefying natural gas allows it to be shipped globally, linking regional gas markets and making LNG infrastructure increasingly important for energy security.

Refiners: owning the margin, not the barrel

Valero, Marathon Petroleum and Phillips 66 buy crude and convert it into petrol, diesel and jet fuel.

Their main driver is the refining margin — the difference between crude input costs and the price of finished products.

That means higher oil prices are not automatically positive. A crude shortage can raise input costs, while shortages of diesel or jet fuel can widen refining margins significantly.

A crude shortage and a refined-product shortage are therefore different investment calls.

Power generators and utilities: producing electricity

Electricity creates a second energy value chain.

Regulated utilities such as Duke Energy, Southern Company and American Electric Power invest in generation and networks and typically earn regulated returns on those assets.

Merchant power producers such as Constellation Energy and Vistra have greater exposure to wholesale electricity and capacity prices. Existing nuclear and gas plants can become particularly valuable when electricity supply is constrained.

Renewables sit within this generation mix too. Rising power demand does not necessarily require one source of generation to eliminate the others.

Grids and electrical equipment: delivering power

Generation is only useful if electricity can reach consumers.

Transmission lines, transformers, substations, switchgear and distribution networks are therefore becoming critical infrastructure.

Companies such as GE Vernova, Eaton, Schneider Electric and Siemens Energy supply the equipment, while companies such as Quanta Services help build and maintain the networks.

This is an important structural feature of the theme because it is relatively agnostic about the ultimate generation mix.

Gas, nuclear and renewables all require substantial grid investment, while data centres add another source of demand for that infrastructure.

How investors can position: four energy scenarios

Rather than treating energy as a single sector allocation, investors can match exposure to the macro environment they expect.

Scenario	What is driving it?	Areas to consider
1. Geopolitical supply shock	Middle East disruption, sanctions or shipping constraints keep oil scarce	Upstream producers and integrated majors
2. High prices trigger a capex cycle	Oil and gas remain expensive long enough to encourage new investment	Producers initially; then oilfield services, pipelines and LNG infrastructure
3. Supply expands while oil demand softens	Venezuela/non-OPEC supply rises as EVs and slower demand challenge oil	Reduce high-beta upstream; favour contracted infrastructure and more diversified energy exposure
4. Electricity becomes the structural growth trade	AI, data centres, EVs and grid constraints drive sustained power investment	Power generators, nuclear, utilities, electrical equipment and grid construction

Scenario 1: Geopolitics remains the dominant driver

This is closest to the current Middle East environment.

If physical supply remains disrupted, upstream producers provide the clearest oil-price sensitivity, while integrated majors offer a more diversified way of expressing the same view.

But investors should not assume all energy companies benefit equally. Pipelines are primarily volume-driven, oilfield services need a sustained spending response, and refiners depend on product margins rather than simply higher crude.

The shorter and sharper the shock, the more important this distinction becomes.

Scenario 2: High energy prices become a capex story

The opportunity changes if high oil and gas prices persist.

Initially, producers capture the higher commodity price. But over time, stronger cash flows and greater confidence in future prices can encourage drilling, field development and infrastructure spending.

That broadens the opportunity towards oilfield services, pipelines and LNG infrastructure.

This is when energy moves from being simply a commodity-price trade to becoming an investment-cycle trade.

Venezuela illustrates this dynamic too. Bringing more production back online requires investment in fields, infrastructure and equipment even if those additional barrels eventually put downward pressure on global oil prices.

Scenario 3: More supply meets weaker oil-demand growth

This is the key counterweight to the bullish oil story.

On the supply side, Venezuela and other non-OPEC producers can gradually add production. On the demand side, EV adoption, efficiency gains and potentially softer global growth can constrain oil consumption.

If additional supply arrives at the same time that demand growth disappoints, the greatest pressure is likely to fall on higher-cost and higher-beta upstream producers.

That does not make the broader energy theme unattractive. It instead argues for shifting exposure towards businesses where earnings depend less on the spot oil price — including integrated majors, contracted pipelines and parts of the power infrastructure value chain.

Venezuela captures the nuance well: more Venezuelan production can be bearish for the commodity while still creating opportunities in the capital spending needed to bring those barrels to market.

Scenario 4: Electricity becomes the structural growth trade

This is the scenario we think deserves increasing attention over a multi-year horizon.

Electricity demand is entering a stronger growth phase as AI data centres, EVs, manufacturing and cooling requirements increase consumption. At the same time, generation and grid capacity cannot be expanded overnight.

The opportunity therefore runs across several parts of the value chain:

Power generators where electricity and capacity are scarce;
nuclear generation as demand grows for reliable baseload power;
regulated utilities investing in generation and transmission;
electrical-equipment suppliers providing transformers, turbines and switchgear;
grid construction and engineering as connection bottlenecks intensify.

Importantly, much of this opportunity does not sit inside traditional Energy indices. It is spread across Utilities and Industrials.

That means investors relying only on conventional oil-heavy energy ETFs may be underexposed to what could become the more durable part of the energy investment cycle.

Our view: diversify the energy allocation beyond oil

Our preference is not to make one large directional call on crude.

Near-term geopolitical risks still justify exposure to traditional energy. Oil producers and integrated majors can provide useful sensitivity to supply shocks and inflation, particularly while Middle East risks remain elevated.

But we would be cautious about extrapolating today's high oil prices indefinitely. Higher prices encourage additional supply, Venezuela is gradually re-entering the investment landscape, and EV adoption is becoming a more meaningful constraint on long-term road-fuel demand.

For longer-term allocations, we see a stronger case for broadening energy exposure towards the infrastructure required to meet rising electricity demand.

That suggests three portfolio actions:

Keep some traditional energy exposure for geopolitical and inflation sensitivity, with integrated majors offering broader exposure than pure commodity beta.
Use oilfield services and midstream selectively when there is evidence that high prices are translating into a sustained capex cycle rather than simply a short-lived oil spike.
Build structural exposure to power and grid infrastructure through power generation, nuclear, regulated utilities, electrical equipment and grid investment.

Our bias is therefore to treat traditional oil and gas as an important tactical and diversification allocation, while viewing power generation and infrastructure as the stronger multi-year structural opportunity.

That does not mean oil disappears from portfolios. It means the energy allocation should evolve with the energy system itself.

Global Head of Macro Strategy

Topics: Equities Theme Category - Equities Macro Commodities Theme Category - Commodities Crude Oil Gas Oil Heating Oil Oil Oil and Gas Theme - Oil and gas majors

Asia Market Quick Take – 01 September 2026

Tue, 01 Sep 2026 01:00:00 Z

Asia Market Quick Take – 1 Sep, 2026

Key points:

Macro: US-Iran resume hostilities. Bessent tells BoJ to raise rates.
Equities: Dow fell 0.7% as AMZN -2.5% on ad lawsuit; Nvidia to invest $3.5 in MediaTek
FX: Softening USD extends August decline; Yen stays near 160 despite BOJ speculation
Commodities: Crude up on Hormuz fears; gold down on rate repricing
Fixed income: US 10y yield hits 19-month high, >4.75%

------------------------------------------------------------------

Disclaimer: Past performance does not indicate future performance.

Macro:

Renewed US-Iran clashes are heightening energy supply risks as US forces hit Iranian launchers and Trump threatens Kharg Island. Oil still transits the Strait of Hormuz despite a supertanker fire from naval mines, while Russian refinery strikes are tightening global refining capacity and lifting fuel margins.
US Treasury Secretary Bessent reportedly told BOJ Governor Ueda and Finance Minister Katayama at the G20 in North Carolina that Japan’s next move should be a rate hike, adding he expects a stronger yen following BOJ and government action.
UK shop price inflation rose to 1.5% in August 2026 from 0.9% in July, the highest since February 2024, driven by higher energy and input costs. Food prices climbed 2.8% and non-food 0.9%, while UK CPI was 2.9% in July, with the BoE expecting a 3.2% peak later in the year.
Germany’s annual inflation rose to 2.9% in August 2026, a four-month high but just below the 3.0% forecast, driven by energy inflation jumping to 10.5%, while food inflation slowed to 0.1% and core inflation held at 2.4%.
The Dallas Fed’s Texas manufacturing index rose to 11.6 in August 2026 from 1.3 in July, its highest since January 2025, with stronger production, new orders, shipments, and capacity use. Price pressures stayed high, uncertainty remained elevated, but firms turned more optimistic about the next six months.
Australia’s Melbourne Institute inflation gauge rose 0.5% in August 2026, down from 1.0% in July, suggesting easing but still elevated price pressures. Annual inflation slowed to 3.5% in July, above the RBA’s 2–3% target, and the bank expects a gradual return to target by late 2027 amid ongoing global and domestic risks.
Japan’s retail sales rose 4% year-on-year in July 2026, beating the 3% forecast and up from 0.6% in June, led by a 16.2% jump in motor vehicle sales and broad rebounds across most categories. Month-on-month, sales climbed 2.4% after a 3.9% fall in June.

Equities:

US — The S&P 500 fell 0.3% to 7,686 on Monday, its second consecutive decline, as Middle East tensions and rising oil prices weighed on sentiment. The Dow shed 0.7% to 53,186, while the Nasdaq 100 edged up 0.1%. Nine of 11 S&P sectors closed lower, led by communication services and utilities. Amazon was the largest drag on the S&P 500, falling 2.5% after the FTC filed a lawsuit over ad pricing, while Edison International collapsed 23.1%. Nvidia will invest $3.5b in Taiwan’s MediaTek to deepen collaboration in the custom AI chips space. In after-hours trade, GameStop rose 2.85% after preliminary Q2 net sales of $780–800m beat the $757m consensus.
EU — European equities slid on Monday, with the Stoxx 600 falling 0.6% to 651 and the Euro Stoxx 50 dropping 1.0% to 6,420, as rising oil prices on the US-Iran flare-up weighed on sentiment. Trading volumes were approximately 40% below normal with London closed for a bank holiday. ASML fell 2.9%, leading the Stoxx 600 lower. Siemens Energy dropped 5.0% and was the DAX's biggest decliner, with the index falling 1.2% to 26,258. The SMI fell 0.8%, led lower by Holcim (-2.7%) and Roche (-1.6%). Oil majors TotalEnergies, Shell and Eni were among the few gainers.
Asia — The Kospi initially plunged as much as 3.6% before erasing all losses to close up 0.5% at 6,820, aided by pension fund buying of approximately 120 billion won in tech names over a 20-minute window. Samsung Electronics and SK Hynix both recovered from losses exceeding 4% to close little changed. The MSCI Asia Pacific Index ended little changed after falling more than 1% at the open. China's CSI 300 rose 0.3%. In Hong Kong, PSBC surged 8.8% after first-half net interest income met estimates. Biren Technology jumped as much as 17% after reporting a narrower first-half loss and a sharp jump in revenue. Asian equity futures are pointing lower on Tuesday, with higher crude above $86 and elevated Treasury yields the key headwinds, though overnight SOX gains should cushion declines in memory-heavy markets. Shein raised HK$13.6b ($1.7b) in its Hong Kong IPO, selling about 280m shares at HK$48.56 and valuing it just over $26b—below H&M’s ~$30b. In gray-market trading, shares fell up to 17% to HK$40.04 by late Monday and it starts trading today.

Earnings this week:

Tuesday: SHEIN (IPO), Nio, Sino Land, Palo Alto Networks, Medtronic
Wednesday: Broadcom, Snowflake
Thursday: Ciena

FX:

USD starts the Asia session softer, extending August’s decline, with the Dollar Index down 0.39% on the month and 0.19% on the final day, as markets weigh higher oil on Iran tensions, hawkish Warsh-driven Fed hike odds, and potential yen-supportive BOJ/MOF action.
AUD and NZD outperform in the Asia session. AUDUSD is described as flat amid the oil spike and hawkish Fed bets keeping traders cautious.
EUR gained 0.76% against the USD in August — its second consecutive monthly gain — and rose 0.27% on Aug 31 alone, snapping a three-session losing streak. It sits 3.53% below its 52-week high of 1.2042.
USDJPY is marginally softer at 159.73 despite a strong Japan consumption print, which the yen failed to benefit from. Bessent reportedly held talks with BOJ Governor Ueda and Finance Minister Katayama, with reports suggesting Bessent expects Japan to take action to boost the yen and signalling a BOJ rate-hike chance.
USD lost 1.21% vs. CAD in August — its largest two-month decline since January 2026 — and fell 0.37% on Aug 31.
Both NOK and SEK firmer, consistent with the broader USD softness and elevated oil prices supporting NOK.

Commodities:

WTI crude rose 2.8% on Monday to settle near $86 a barrel — its biggest single-session gain in three weeks — after US forces struck an island in the Strait of Hormuz and Iran retaliated against the UAE and Jordan. WTI extended gains above $86.30 in early Asian trading on Tuesday. Brent settled near $90 on Monday. The renewed fighting has revived fears of prolonged disruptions to energy flows through the strait.
Gold steadied around $4,445 an ounce after falling more than 3.5% over the prior two sessions. The metal is caught between safe-haven demand from Middle East tensions and headwinds from rising Fed rate-hike expectations, which have boosted real yields and pressured bullion.

Fixed income:

The 10-year Treasury yield topped 4.75% on Monday for the first time since January 2025, driven by rising oil prices amplifying inflation concerns and cementing bets on a September Fed rate hike. The 30-year yield rose to 5.248%, extending a four-day run higher. The long end led the selloff, steepening the yield curve after Friday's sharp flattening post-Warsh.
JPMorgan's rates strategists unwound their 2s10s steepener recommendation at a 7.6bp loss following Warsh's "somewhat more hawkish than expected" Jackson Hole address. The bank had previously flagged that Warsh's speech added to his credibility on the inflation fight, making the steepener untenable in the near term.
JGB futures are expected to fall as elevated oil prices and Bessent's call for BOJ rate hikes weigh on sentiment. The 10-year JGB auction will be closely watched for its read-across to global bond markets.

For a global look at markets – go to Inspiration.

APAC Research

Saxo Group

The FX Trader: Restrained USD reaction to Warsh hawkishness

Mon, 31 Aug 2026 12:05:00 Z

Incoming data to take over this week.

The latest

The market was caught off guard by Fed Chair Warsh’s hawkish speech at the Fed’s Jackson Hole, Wyoming symposium on Friday. The reaction function – more in gold and US treasuries than in the stronger US dollar – was to a large degree the US Treasury’s fault. When the Bessent Treasury recently announced the doubling of long-term treasury buybacks on August 19th and the idea was even floated (according to two Treasury officials cited by CNBC’s Steve Liesman) of the Treasury using its large “General Account” to throw its weight into supporting the US treasury market, it felt like US officialdom was circling the wagons around the US treasury market. And with increasing talk in recent years of “fiscal dominance”, in which US fiscal policy priorities far outweigh anything the Fed might consider doing with monetary policy, it was thought that the new Fed chair was brought on board to support the Treasury.

Instead, Chair Warsh has consistently made all the “right” orthodox noises on Fed independence, on the need to get ahead of inflation and on the sanctity of the 2% inflation target. That was the impression at his first presser as Fed Chair back at the June FOMC meeting, and it was the impression on Friday, even if he continues to avoid explicit forward guidance for the September rate hike decision. Warsh said that the Fed has “work to do” if inflation doesn’t retreat and said that financial conditions weren’t holding the economy back, while adjusting short-term interest rates are the Fed’s “predominant tool”. His rhetoric Friday shocked US treasury yields higher, especially at the short end of the curve as more Fed tightening was brought forward. The US 2-year rose more than 10 basis points at one point and the odds of a hike at the September meeting rose above 60%. And yet, we are still talking about a “terminal” Fed policy rate, if they do resume hiking, of only 50 basis points higher than the current rate – it would likely take considerable incoming data evidence on the inflation front to take Fed expectations higher still, assuming the labor market remains in its “low hire, low fire” state. The USD spiked higher, but we only trade back to 1.1600 in EURUSD now versus 1.1640 before the Warsh speech. USDJPY has reset back to levels prevailing just before Warsh spoke – interesting to note there that Japan said it had plowed over JPY 15 trillion (close to USD 100 billion) into defending its currency over the last month, while Treasury Secretary Bessent said that the BoJ would “do the right thing” in making coming policy decisions.

Bottom line: Follow on USD strength from here would likely have to come from incoming data more than the specific implications of this speech. We’ll get a decent amount of that this week (see preview below) but also watch oil prices and next week’s CPI data point as well. The longer end of the US yield curve and whether yields are positively correlated with the US dollar or uncorrelated is also critical. Recently, long US yields and the US dollar have arguably been slightly negatively correlated if there is any relationship at all. Given the timing of the US Treasury’s soft “intervention” - its announcement of buyback increases - with the break of the benchmark 30-year T-bond yield to 19-year highs, it is logical to conclude that the next US Treasury policy measures to support the treasury market will be reached for quickly if, for example, the benchmark US 10-year treasury yield breaks sharply above the recent 4.75% cycle high that was tested multiple times.

Chart focus: EURUSD
Note how the EURUSD sell-off almost neatly reverses the reaction to the Treasury buyback announcement from August 19th. This is a short-term reset of that extension to the upside, not yet a full reversal, which only starts to threaten if the price action continues down through 1.1580 (the previous high), although a punch down through 1.1450-1.1500 would be needed to develop any downside momentum and a retest of the longer-term range lows. The upside path is simpler, as a reversal of this latest sell-off wave would suggest the recent larger bull move off the sub-1.1400 base remains intact. In the big picture, EURUSD has been impossibly mired in the 1.1400-1.1800 range for over fourteen months except for a few spikes. The pair is almost exactly in the very middle of the range of the last many months.

Source: Saxo

Looking ahead

It’s a busy week ahead for US macro data as we watch whether the market extends its reaction to Fed Chair Warsh’s speech. This week we get the usual first-of-month data with the August ISM Manufacturing survey up on Tuesday, which also sees the July JOLTS job opening survey (poor quality and old-ish data, but the market reacts to surprises). On Wednesday we get the August ADP private payrolls change numbers (a typical soft +50k number expected there). On Thursday it’s the ISM Services survey. Finally, Friday sees the August jobs report ahead of the three-day Labor Day weekend. The market is expecting nonfarm payrolls growth of +50k after -23k in July, +20k in June and +63k in May.

The RBNZ set to continue it hiking cycle Wednesday.
The Bank is expected to follow up on its first-of-the-cycle July hike with another hike on Wednesday, with the forward guidance in focus as the market sees at least two hikes over the next three meetings, including this week’s.

Bank of Canada on Wednesday.
The Bank of Canada meeting will likely have Governor Tiff Macklem and company sitting on their hands, with little sense of being in a rush to do otherwise. Canada’s core inflation measure, the “trimmed mean” dropped to a more than five-year low in June and July of 1.9% after a persistent slide in the previous months. As well, the US and Canada are engaged in a trade tiff that will hit Canada far harder if the situation escalates.

FX Board of G10 and CNH trend evolution and strength.
Note: If unfamiliar with the FX board, please see a video tutorial for understanding and using the FX Board.

No surprise to see that the two weakest currencies (SEK, CHF) are Europe’s lowest yielding currencies, with CHF weakest while SEK is also weak from two angles: traditionally it is a pro-cyclical currency and traditionally does poorly when risk sentiment is on the defensive, but it’s more likely that the Riksbank’s low 1.75% policy rate and lack of urgency in moving that rate higher is the largest driver of SEK weakness, notable since Friday as EURSEK burst to a new 12 month high above 11.115. While the US dollar has turned around a bit in momentum terms, there is a lot more wood to chop to suggest it is powering up for a larger strengthening move. Sterling actually traded weaker Monday after BoE Governor Bailey said that the BoE would be happy to wait for a while before deciding on policy moves due to the slackening UK labor market. He also said that AI risks triggering a global economic downturn and risks to global financial stability.

Table: NEW FX Board Trend Scoreboard for individual pairs.

AUDNZD is attempting to establish a new uptrend, with the Wednesday RBNZ meeting a key test there. It is far too early to point to new USD developments and the deep blue colors in so many pairs point to the very low volatility (often meeting lack of conviction in market direction) nearly everywhere outside of gold and silver.

John J. Hardy

Topics: Forex Highlighted articles Trump Version 2 - Traders FR US Actualites et Analyses EURUSD USDJPY UKMustRead

Broadcom vs Marvell: the custom-chip boom has an expectations problem

Mon, 31 Aug 2026 11:30:00 Z

Key takeaways

Custom AI chips are becoming a second growth engine alongside Nvidia’s GPUs, with Broadcom and Marvell competing for Big Tech designs.
Marvell shows how strong results can disappoint when investors have already priced in even faster growth.
Broadcom’s Wednesday earnings will test both the custom-chip boom and investors’ increasingly demanding expectations.

A company can report record revenue, raise its outlook and tell investors that an important business will more than double next year. Its shares can still fall 10%.

Marvell Technology managed exactly that last week.

The chip designer raised its longer-term revenue expectations as demand for artificial intelligence (AI) infrastructure accelerated. Yet Marvell closed at 216.62 USD on 28 August, down 10.3%, because investors wanted its new Google custom-chip partnership to generate meaningful revenue sooner.

That reaction offers a useful preview for Broadcom, which reports fiscal third-quarter results on Wednesday, 2 September. It also captures one of today’s most important investing lessons: great company plus great results does not automatically equal a great stock return. Expectations sit in the middle.

The chip is getting personal

Nvidia built the AI boom around the graphics processing unit (GPU), a flexible chip capable of handling many different computing tasks.

But flexibility is not always the cheapest option.

As AI moves from training models towards repeatedly running them for millions of users, known as inference, efficiency matters more. Google, Meta, OpenAI and other large technology companies increasingly want processors designed around their own workloads.

Think of the difference between a Swiss Army knife and a factory machine. Nvidia sells an exceptionally capable Swiss Army knife. Custom silicon is the machine built to perform one job repeatedly and efficiently.

This creates an expanding market for companies such as Broadcom and Marvell. They help customers turn their own chip ideas into products and also supply much of the networking technology connecting thousands of processors inside data centres.

The race is becoming more competitive. Google recently expanded its relationship with Marvell across custom processors, networking and memory technologies. The agreement could eventually generate up to 120 billion USD of orders through fiscal 2033. Importantly, Google appears to be adding Marvell alongside Broadcom rather than simply replacing Broadcom.

Broadcom, meanwhile, is helping Meta develop its Meta Training and Inference Accelerator (MTIA), with production of the latest generation expected to start in September. It has also developed OpenAI’s first custom inference processor, Jalapeño, which is expected to begin deployment by the end of 2026.

The important point is not that custom chips replace Nvidia. Big technology companies increasingly use several types of processors. The AI semiconductor market is becoming larger and more specialised at the same time.

Marvell delivered. Expectations moved faster

That sounds ideal for Marvell.

Quarterly revenue reached 2.74 billion USD, while management lifted its fiscal 2027 revenue outlook to around 12 billion USD and fiscal 2028 expectations to around 18 billion USD. Custom-chip revenue is expected to more than double next year.

The problem was timing.

Management indicated that the largest contribution from Google would arrive from fiscal 2029. Investors had already pushed Marvell shares sharply higher this year partly because they expected custom silicon to become a much larger business.

The result was therefore good, but the change in expectations was not good enough.

Compare that with Salesforce and CrowdStrike one day earlier.

Salesforce, which sells software that helps companies manage customers and sales, raised its annual outlook and showed better demand for its AI products. Its shares closed at 252.05 USD, up 22.6%.

CrowdStrike, a cybersecurity company, reported record net new annual recurring revenue (ARR), a measure of new subscription business. Its shares closed at 227.96 USD, up 20.5%.

Why such different reactions? Salesforce and CrowdStrike entered earnings carrying fears that AI could disrupt software. Strong results reduced that fear. Marvell entered earnings carrying enormous optimism. Strong results confirmed much of the existing story rather than improving it.

That is the expectations game in one earnings week.

Broadcom now has to clear its own bar

Broadcom faces an unusually high hurdle on Wednesday.

Last quarter, its AI semiconductor revenue reached 10.8 billion USD, up 143% from a year earlier. Management expects roughly 16 billion USD this quarter, representing growth of more than 200%. Total revenue guidance stands around 29.4 billion USD.

Those numbers would normally look extraordinary. The complication is that extraordinary has become normal for leading AI companies.

Broadcom learned this in June. Revenue grew 48%, but still came slightly below market expectations. Its 16 billion USD AI forecast also fell just short of what analysts had hoped for. The business was booming. The expectation bar was simply higher.

Investors therefore need to look beyond whether Broadcom “beats”. More important will be what management says about the next stage: how quickly custom processors ramp, whether new customers add meaningful revenue, and whether AI networking grows alongside compute.

Broadcom’s advantage is that it can potentially collect revenue twice. It helps design specialised processors, then sells networking and connectivity products needed to make large clusters of those processors work together.

Risks: a bigger market can still disappoint

Custom silicon remains tied to a relatively small number of enormous customers. A delayed chip programme, lower infrastructure spending or a customer moving more work to another supplier can shift billions of future revenue.

Competition is also increasing. Marvell’s Google win shows that customers may deliberately use several suppliers. That expands the overall opportunity, but makes market share less predictable.

Finally, expectations matter. When investors already assume years of exceptional growth, even small delays can create large share-price reactions without meaning the long-term business has suddenly deteriorated.

Investor playbook

Separate results from expectations. Ask what investors appeared to expect before earnings, not simply whether revenue grew.
Follow timelines, not deal headlines. A large contract matters differently if revenue arrives next quarter rather than three years later.
Watch customer diversification. More custom-chip customers can strengthen growth, while supplier diversification can increase competitive pressure.
Treat share reactions as information, not verdicts. A falling stock can reflect lower expectations rather than worsening business fundamentals.

The business reports the numbers. The market grades the expectations

Broadcom’s earnings on 2 September will therefore test more than one company. They will test whether custom silicon is becoming a durable second pillar of AI infrastructure alongside Nvidia’s GPUs, and how much of that opportunity investors already assume.

Marvell has already shown the strange arithmetic of an optimistic market: revenue can rise, forecasts can rise and the share price can still fall. Salesforce and CrowdStrike showed the reverse when good results removed a major fear.

For investors, that distinction matters. Earnings tell you how the business performed. The share-price reaction tells you how that performance compared with the story investors had already paid for.

Topics: Equities Highlighted articles UKMustRead Theme - Artificial intelligence Artificial Intelligence

Warsh spoils the gold party. Busy week ahead.

Mon, 31 Aug 2026 09:27:00 Z

Fed Chair Warsh talks up Fed's need to fight inflation.

Listen to the full episode now or follow the Saxo Market Call on your favourite podcast app.

Questions and comments, please!

Saxo Market Call

Saxo Bank

Topics: Podcast Highlighted articles Forex

COT update: Agriculture buying accelerates as funds rush into grains and softs

Mon, 31 Aug 2026 08:00:00 Z

Our weekly Commitment of Traders update returns highlighting future positions and changes made by hedge funds and other speculators across commodities and forex during the week to last Tuesday, 25 August 2026

Key points:

Our weekly Commitment of Traders update tracks hedge fund positioning across forex and commodity futures during the week ending 25 August 2026.
Dollar longs cut after the Treasury buyback: Speculators reduced the aggregate dollar long by USD 8.3 billion to USD 27.6 billion, led by short covering in the euro, Canadian dollar, Swiss franc and New Zealand dollar, while yen selling continued amid unfavourable US-Japan rate differentials.
Agriculture length surges at a record pace: The managed-money net long across ten major grains and softs jumped at the fastest pace on record, with corn, sugar, cotton and Kansas wheat reaching multi-year positioning highs, while CBOT wheat remained net short ahead of an 11% price surge as worsening Black Sea supply risks forced shorts to retreat.
Metals and energy positioning diverge: Gold futures buying remained relatively restrained despite a 6.2% rally, while copper length eased from elevated levels. In energy, funds cut Brent longs by 11% as increased Hormuz flows reduced the Middle East risk premium.

Forex

The COT update on forex covering the week to 25 August captured the aftermath of the US Treasury’s bond buyback announcement, which initially weakened the dollar before some buying returned later in the reporting period. Overall, the Bloomberg Dollar Spot Index ended the reporting week down around 0.8%, before fully reversing the buyback-driven decline by last Friday following Kevin Warsh’s hawkish speech at Jackson Hole.

Against this backdrop, the initial reaction was unsurprisingly one of dollar-long liquidation, with speculators turning net buyers of most of the eight IMM currency futures tracked in this report. The main exception was the Japanese yen. Overall, the aggregate speculative dollar long was cut by USD 8.3 billion to USD 27.6 billion, extending a sharp reversal from the record long of around USD 50 billion reached just one month earlier.

At the individual currency level, the euro short was cut by 38% after speculators bought a net 22.7k contracts, equivalent to USD 3.3 billion, leaving the net short at USD 5.3 billion. The Canadian dollar saw its net short reduced by 23%, or USD 2.7 billion, following net buying of 36.6k contracts. The Swiss franc and New Zealand dollar also attracted sizeable short covering, each seeing their respective dollar-equivalent shorts reduced by around USD 1.1 billion.

Sterling and the Australian dollar also saw modest net buying, although both remained firmly net short, while the Mexican peso continued to stand out as the only currency among the eight carrying a speculative net long against the dollar. Its relative strength continues to be supported by favourable rate differentials - the same dynamic, but in reverse, that continues to weigh on the Japanese yen.

Going against the broader trend, the yen saw net selling for a second consecutive week, with speculators selling 10.4k contracts and lifting the net short to 63.3k contracts, or around USD 5 billion. The divergence highlights the continued importance of relative rate expectations, with the still-wide US-Japan yield differential limiting the yen's ability to benefit from the broader bout of dollar weakness.

Non-commercial IMM forex futures position and Dollar index - Source: Bloomberg & Saxo

Commodities

In commodities, the latest reporting week to 25 August covered the period following the surprise US Treasury bond buyback announcement, which triggered a rush into hard assets, particularly precious metals, while the accompanying dollar weakness provided broader support across the commodity complex. It was also a week in which the geopolitical temperature rose in and around the Black Sea region while a temporary easing in the Middle East contributed to an increase in crude flows through the Strait of Hormuz and a partial unwinding of the oil market's geopolitical risk premium.

During the week, the Bloomberg Commodity Index rose by 1.1%, with strong gains across agriculture excluding livestock and, not least, precious metals, while industrial metals also advanced. These gains more than offset losses across the energy sector. Speculators responded by cutting length in Brent crude, soybean oil and livestock, while most other markets saw net buying. Once again, the strongest appetite was concentrated in grains and softs, a sector that in a matter of weeks has moved from being relatively under-owned to carrying an increasingly sizeable speculative long.

Elsewhere, the positioning response to strong gains across the investment metals was relatively muted. Gold rose 6.2% during the reporting week, while the managed-money net long increased by just 4% to 151.3k contracts, leaving it close to its one-year high. Silver and platinum saw larger percentage increases albeit from considerably smaller starting positions. This suggests that the strong price response to the Treasury announcement was not accompanied by an equally aggressive build-up in futures positioning, potentially pointing to demand coming from other sources as well.

On Friday, gold led the precious metals sector sharply lower following Kevin Warsh’s hawkish Jackson Hole speech on Friday, in which he pledged to fight inflation, lifting expectations that the Fed could raise rates before year-end. The weakness extended into today's session after bullion closed back below its 200-day moving average on Friday, currently at USD 4,528, forcing traders to reassess the short-term technical outlook. The next key support is around USD 4,328, the 50% retracement of the August rally. Focus on the dollar and bond yields considering the longer-term fiscal challenge posed by US debt at around USD 40 trillion has not disappeared.

Managed money positions and changes across key commodity futures - Source: Bloomberg & Saxo

Agriculture: Across the ten major grain and soft commodity futures tracked in this report, the combined managed-money net long has now in the past two weeks surged by 546k contracts, the fastest pace on record, with the total rising above 1.1 million contracts, the highest in more than four years and representing a nominal exposure of more than USD 40 billion. The speed of the turnaround has been particularly striking, with the combined position having been close to neutral only a few months ago.

The buying was led by corn, where funds added a net 126k contracts to lift the net long to 376.5k contracts, the highest in more than four years. Soybeans also attracted sizeable demand, with the net long rising by 46.6k contracts to 198.3k, while sugar saw another 55.7k contracts of net buying, lifting the position to a fresh two-year high of 207.1k contracts. Cotton also reached a two-year high at 95.8k contracts, while the Kansas City wheat net long rose to 44.1k contracts, a four-year high.

One notable exception was CBOT wheat, where speculators, despite some short covering, still held a net short position of more than 100,000 contracts by last Tuesday. This helps explain why prices jumped more than 11% in the days that followed, as short sellers retreated on news that Russian exports had slowed sharply and disruptions to Ukrainian shipments increasingly threatened not only current exports but also future planting. The fundamental backdrop has therefore become considerably less comfortable for remaining wheat shorts.

Grains and softs combined net long - Source: Bloomberg & Saxo

Key agriculture commodity positioning - Source: Bloomberg & Saxo

Major energy and metal futures positioning - Source: Bloomberg & Saxo

What is the Commitments of Traders report?

The COT reports are issued by the U.S. Commodity Futures Trading Commission (CFTC) and the ICE Exchange Europe for Brent crude oil and gas oil. They are released every Friday after the U.S. close, covering positions held as of the previous Tuesday. The reports break down open interest in futures markets into different categories of market participants, depending on the asset class.

Commodities: Producer/Merchant/Processor/User, Swap Dealers, Managed Money, and Other Reportables
Financials: Dealer/Intermediary, Asset Manager/Institutional, Leveraged Funds, and Other Reportables
Forex: A broader breakdown between commercial and non-commercial participants, with the latter generally viewed as speculators

The main reasons we focus primarily on the behaviour of speculators, such as hedge funds and trend-following CTAs, are:

They are more likely to have tight stops and no underlying physical exposure that needs to be hedged
This makes them more reactive to changes in fundamental or technical price developments
Their positioning provides insight into major trends, while extreme positions can also help identify when a reversal or correction may be looming

It is worth noting that this group tends to anticipate, accelerate and amplify price moves that have often already been set in motion by fundamentals. As followers of momentum, these traders typically buy into strength and sell into weakness. As a result, they are often found holding their largest long exposure near the peak of a cycle or their largest short exposure ahead of a trough in the market. For that reason, positioning extremes can be useful contrarian indicators, but rarely in isolation: timing still depends on a fundamental or technical catalyst that changes the prevailing trend.

Related articles/content
28 Aug 2026: From barrels to bushels and bullion as scarcity broadens the commodity rally 26 Aug 2026: Grains hit two-year high as war weather and logistics tighten supply 26 Aug 2026: From escalation to exit ramp why oils war premium is unwinding again 25 Aug 2026: Gold pauses after powerful four-day rally Educational resources: A short guide to trading crude oil The basics of trading wheat online A short guide to trading gold A short guide to trading copper A short guide to trading silver Gold, silver, and platinum: Are precious metals a safe haven investment? Daily podcasts hosted by John J Hardy can be found here

Related articles/content

28 Aug 2026: From barrels to bushels and bullion as scarcity broadens the commodity rally
26 Aug 2026: Grains hit two-year high as war weather and logistics tighten supply
26 Aug 2026: From escalation to exit ramp why oils war premium is unwinding again
25 Aug 2026: Gold pauses after powerful four-day rally

Educational resources:
A short guide to trading crude oil
The basics of trading wheat online
A short guide to trading gold
A short guide to trading copper
A short guide to trading silver
Gold, silver, and platinum: Are precious metals a safe haven investment?

Daily podcasts hosted by John J Hardy can be found here

More from the author
Ole S Hansen's articles on Saxo For market commentary and insights - not trading advice - follow me and join the conversation on Twitter and Substack

Topics: Commodities COT Commodities Crude Oil Natural Gas Gold Silver Copper Platinum Corn Sugar Coffee Gasoline Palladium Wheat Cocoa Cotton Cattle Energy (Sector) COT FX EURUSD USDJPY AUDUSD USDCAD USDCHF GBPUSD NZDUSD Forex Trump Version 2 - Traders CZ ESMA disclaimer

Market Quick Take - Warsh turns hawkish as Hormuz risk returns - 31 August 2026

Mon, 31 Aug 2026 06:00:00 Z

Market drivers and catalysts

Macro: A weekend strike near Hormuz collided with a hawkish Fed chair to reset the week
Equities: US stocks slipped on hawkish Fed signals, Europe rebounded, Asia recovered from early losses as rate fears and higher oil hit technology.
Digital Assets: Miners and treasury companies were sold hard while the coins themselves barely moved
Commodities: Crude jumps on renewed supply risks as Warsh drives precious metals slump; speculators rush into agriculture at record pace
Fixed Income: US Treasury yield curve bear flattens on hawkish Fed Chair Warsh speech Friday. Global yields follow US Treasury yields higher.
Currencies: USD stronger on hawkish Warsh speech, USDJPY briefly traded above 160.00.

Macro

Fed Chair Kevin Warsh delivered a hawkish speech at the Fed’s Jackson Hole, Wyoming symposium on Friday as he declared that inflation is not slowing and that interest rates are the “predominant tool” for the Fed to achieve its mandate, though he continued to criticize the notion of the Fed’s former forward guidance policy or to provide any specific hints on policy tightening. “I stand here today committed to a discipline, not to a decision”.
US Treasury Secretary Scott Bessent said he expects the Bank of Japan will “do the right thing” on policy and said he expected to meet with Bank of Japan governor Ueda on the sidelines of the upcoming G20 summit, which starts today in North Carolina. Japan’s Ministry of Finance said Friday that its intervention to support the JPY had deployed over JPY 15 trillion (USD 96 billion).
A weekend military exchange reset the geopolitical backdrop. The US struck Iranian rocket launchers reportedly preparing to mine the Strait of Hormuz on Sunday, its first such attack in over a month, alongside increased sanctions pressure. Roughly 6 to 8 million barrels of crude still transit the strait each day. An Iranian official said renewed talks with Washington are not impossible.
More in our Macro Analysis & Macroeconomic News

Macro calendar highlights (times in GMT)

1200 – Germany Flash Aug. CPI
UK Summer Bank Holiday

Earnings events

Tuesday: Palo Alto Networks, Medtronic, MongoDB, Credo Technology, NIO, GitLab, Dell Technologies
Wednesday: Broadcom, Snowflake, Hewlett Packard Enterprise, NetApp, Five Below
Thursday: Zscaler, Lululemon, Ciena, Samsara, DocuSign, Planet Labs

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

Equities

USA: The S&P 500 fell 0.3%, the Dow slipped less than 0.1% and the Nasdaq 100 dropped 0.7% on Friday as Fed Chair Kevin Warsh’s hawkish Jackson Hole remarks lifted rate expectations and hit technology shares. Nvidia fell 4.6%, while Marvell Technology sank 10.3% despite beating estimates as its outlook failed to clear elevated AI expectations. PayPal tumbled 12.7% after Stripe and Advent International abandoned takeover talks, while Amazon gained 4.0% after an analyst raised its price target on improving AI-driven retail efficiency. Markets now turn to US jobs data and the September Fed decision.
Europe: The Stoxx 600 rose 0.5%, Germany’s DAX gained 0.8%, the FTSE 100 added 0.3% and France’s CAC 40 rebounded 1% on Friday as French stocks recovered and autos led gains. BMW jumped 4.5% and Forvia rose 5.1% after Citi placed both on positive catalyst watches, pointing to depressed expectations and potential upside from upcoming company and policy events. EssilorLuxottica gained 2.4% after announcing a share buyback, while French banks also recovered from Thursday’s selloff. European investors now face the same uncomfortable mix of firmer oil prices and higher-rate risk.
Asia: Asian equities recovered sharply from steep opening losses on Monday, with Japan’s Nikkei down 0.2% and South Korea’s Kospi 0.3% lower after earlier falling more than 2% and 3%, respectively. Markets initially sold off as Fed Chair Kevin Warsh’s hawkish remarks and higher oil prices raised concerns over rates and inflation, but buyers quickly returned to technology shares. Chinese brokerages remained in focus after listed securities firms reported combined first-half profits up more than 40%, while BYD said overseas revenue exceeded domestic revenue for the first time in the first half of 2026.
More in our Equity Trading - Stock Market Analysis & News

Digital Assets

The listed crypto complex was sold hard on Friday even as the coins barely moved over the weekend. IREN fell 12.53% after fiscal fourth-quarter results in which AI cloud revenue overtook mining for the first time but impairments weighed. Marathon lost 10.11%, CleanSpark 9.96%, Cipher 9.54% and Riot 9.05%, with Strategy down 7.34% and Coinbase 6.33%.
US spot bitcoin funds drew about USD 924 million over the 24 to 28 August week, keeping the month’s intake above USD 3 billion. Flow was uneven, with IBIT taking USD 228 million against redemptions elsewhere.

Commodities

Crude jumped, with Brent trading back above USD 90, as fresh fighting flared in the Middle East and the US signalled it was likely to unveil new secondary sanctions on Iran. The US struck Iranian rocket launchers that were reportedly preparing to deploy mines into the Strait of Hormuz, while Jordan’s army intercepted eight missiles after Tehran’s military claimed attacks against American forces in the kingdom. These developments have once again reduced the prospects of bringing the conflict to an end. However, with an estimated 6–8 million barrels per day of crude flowing through the Strait, the upside risk is for now being capped.
Gold led the precious metals sector sharply lower following Kevin Warsh’s hawkish Jackson Hole speech, in which he pledged to fight inflation, lifting expectations that the Fed could raise rates before year-end. The weakness extended into Monday’s session after bullion closed back below its 200-day moving average on Friday, currently at USD 4,528, forcing traders to reassess the short-term technical outlook. The next key support is around USD 4,328, the 50% retracement of the August rally. Focus remains on the dollar and bond yields, while the longer-term fiscal challenge posed by US debt at around USD 40 trillion has not disappeared.
The recent rally across key agricultural commodities, supported by war and weather-related supply concerns, has triggered a record two-week accumulation of speculative length. In the two weeks to 25 August, the managed-money net long across ten major grain and soft commodity futures jumped by a record 523,000 contracts to more than 1 million contracts, the highest in four years and representing a nominal value of more than USD 40 billion. The speed of the turnaround has been particularly striking, potentially leaving the recently established longs exposed to a sudden change in the bullish narrative.
More in our Commodity News, Analysis & Commentary

Fixed Income

The US Treasury yield curve bear flattened Friday in reaction to the more hawkish than expected speech from Fed Chair Warsh. Yields eased slightly in early Monday trading in Asia, but the benchmark two-year yield is still some seven basis points higher than it was before Warsh’s speech, trading near the top of the range since late 2024 as the odds of a September 16 FOMC rate hike rose above 50%. The benchmark 10-year Treasury yield is some three basis points higher than before the speech at 4.71% as the Treasury market eyes the key 4.75% area that has marked the top of the range on multiple occasions over the last month.
Global bond yields rose in line with US Treasuries late Friday and early Monday in the wake of Fed Chair Warsh’s hawkish speech. The benchmark German two-year yield lifted four basis points to close the week just below 2.91%, the highest level for the year and since mid-2024. Japan’s benchmark two-year JGB yield rose two basis points to 1.73%, a new modern high since the mid-1990s.

Currencies

The US dollar rose sharply on Fed Chair Warsh’s hawkish speech. USDJPY traded through 160.00 Friday and briefly in early Monday trading for the first time since the official intervention in late July and at the beginning of August. By early European hours, USDJPY returned to the 159.80 area, only slightly above the levels trading before Warsh’s speech. The reaction in EURUSD was stickier, as it remained below 1.1600 by early Monday in Europe, solidly below the 1.1640–1.1650 area trading before Warsh’s speech.
The Swedish krona stands out among the weaker G10 currencies as the Riksbank has yet to hike its policy rate for the cycle and is seen as likely slow to do so. EURSEK rose from 11.09 to nearly 11.15 in the wake of US Fed Chair Warsh’s speech on Friday, posting its highest level in almost exactly a year.
More on currencies in our dedicated section: Forex Trading News & Analysis

Saxo Bank

Commodity weekly: From barrels to bushels and bullion as scarcity broadens the commodity rally

Fri, 28 Aug 2026 11:30:00 Z

Key Points:

Commodity strength has broadened while leadership has rotated: BCOM TR remains firmly higher in August and around 30% higher year to date, but precious metals, grains and soft commodities have replaced energy as the main engines of the latest advance.
Precious metals have rediscovered their hard-asset credentials: gold, silver and platinum have rallied strongly amid fiscal concerns, renewed investor demand and technical momentum, even as elevated inflation keeps the outlook for US monetary policy uncertain.
Agriculture is experiencing its strongest broad-based advance in years: Black Sea disruption, tighter logistics and increasingly volatile weather have driven double-digit gains across wheat, corn, sugar and cocoa.
Copper remains the industrial-metal standout: despite some late-month weakness across the sector, copper remains close to record levels and within a well-defined uptrend amid tight ex-US inventories, mine disruptions and massive stock accumulation in the US.

Commodity markets are heading towards the end of August with another strong monthly gain, but beneath the headline performance there has been a notable rotation in leadership. The Bloomberg Commodity Total Return Index (BCOM TR), which tracks a basket of 24 major commodity futures spread almost evenly between energy, metals, and agriculture, remains on course for its highest monthly close on record, lifting its year-to-date return to around 31%, despite some late-month weakness across energy and industrial metals.

The standout development has instead been the powerful rebound across precious metals and agriculture. Precious metals have gained around 15% this month, while grains and soft commodities are both heading for double-digit advances. Grains are on course for their strongest month since February 2022, while softs are heading for their best monthly performance in 12 years. Despite some weakness across US-focused livestock contracts after Trump temporarily lifted tariffs on some foreign imports, the BCOM Agriculture Index is heading for its best month in more than five years.

The common thread linking these otherwise very different markets is scarcity. In precious metals, concerns about fiscal sustainability, currency debasement and the ability of bond markets to absorb rising government debt have renewed demand for hard assets. Across agriculture, war, weather and logistics have raised concerns about future supply. Energy, meanwhile, has lost some momentum as the market cautiously prices an ongoing improvement in flows through the Strait of Hormuz.

Broad gains seen across most major commodities this past month - Source: Bloomberg & Saxo Note: Past performance is not indicative of future results

Bullion returns to the front

Precious metals have been the strongest commodity sector in August, rising around 15%, led by silver, gold and platinum. Gold briefly reached a three-month high near USD 4,700 this week before consolidating ahead of Fed Chair Kevin Warsh's Jackson Hole speech.

The latest rally has several layers. The first is renewed concern about US fiscal sustainability and the dollar following the Treasury's decision to expand buybacks of longer-dated government bonds. While the programme itself remains relatively modest compared with the size of the Treasury market, the signal was arguably more important than the amount involved. It highlighted the authorities' sensitivity to elevated long-term borrowing costs at a time when government debt continues to rise.

That has helped revive the debasement theme that has supported gold during much of the past two years. Importantly, gold has performed strongly despite elevated bond yields and inflation remaining well above the Federal Reserve's target. Besides an underlying and increasingly constant bid from central banks, this suggests investors are increasingly distinguishing between high yields driven by monetary tightening and high yields reflecting concerns about fiscal sustainability and government borrowing requirements.

Investor participation has also strengthened through ETF demand and futures positioning, while the technical picture improved when gold earlier in the month reclaimed its 200-day moving average. Silver has subsequently outperformed gold, while platinum has also participated, reinforcing the impression of renewed investor interest across the precious-metals complex.

Spot Gold - Source: Saxo Note: Past performance is not indicative of future results

Agriculture takes centre stage

Grains are heading for a monthly gain of around 13%, their strongest performance since February 2022, while soft commodities have risen even more strongly. The current gain of around 14% puts the sector on track for its best month in 12 years. The breadth of the rally is worth noting, with corn, wheat, sugar, cocoa and cotton all recording double-digit gains.

The grain rally has increasingly been driven by a combination of war, weather and logistics. Wheat prices have soared to a three-year high as Black Sea disruption has become more serious, with Russia's grain exports slowing sharply, with August grain exports expected to total only slightly above 2 million tonnes, compared with a five-year average of around 5.7 million tonnes. Meanwhile, Ukraine's Black Sea ports which previously handled 90% of the country's exports, remain effectively blocked after Russian attacks while alternative corridors like the Danube is suffering from congestion.

The disruption is also reducing farmers' cash flow and raising concerns about planting and input use for next year's harvest. Russia and Ukraine account for roughly 25% to 30% of global wheat exports, so prolonged disruption could force major importers to source more expensive supplies elsewhere. Chicago wheat prices have risen sharply since early July as buyers increasingly price this risk.

For corn, the Black Sea story has been accompanied by a deterioration in the US production outlook. The USDA recently lowered its yield estimate for this season, while subsequent crop surveys have reinforced concerns that yields may fall short of earlier expectations. Weather concerns elsewhere, including China and Brazil, have added another layer of uncertainty.

Chicago Wheat - Source: Saxo

El Niño puts soft commodities back in focus

Weather has been equally important across soft commodities, where sugar has been the standout performer, gaining close to 25% this month. A strengthening El Niño threatens to create different problems across major producing regions. Excessive rainfall can disrupt harvesting and exports in Brazilian, while weaker rainfall elsewhere can hurt crop development. India has already faced concerns about monsoon conditions and domestic sugar availability, while increasingly volatile weather is raising uncertainty across several tropical crops.

Sugar's rally has also been amplified by positioning. Earlier this month, speculative funds moved from a sizeable net short to a net long for the first time in more than a year, highlighting how rapidly a fundamentally driven move can accelerate when short covering and momentum buying are added to the mix.

Cocoa has also rallied by double digits as attention shifts towards the next West African crop. Concerns about delayed harvesting in Ivory Coast and a weaker production outlook in Ghana have reinforced the market's sensitivity to weather after several years of exceptionally volatile supply conditions.

This does not mean every weather concern will translate into an actual shortage. Agricultural markets have a long history of pricing the weather forecast before ultimately trading the harvest. But with inventories relatively tight across several markets, geopolitical disruptions complicating trade flows and weather patterns becoming increasingly volatile, the tolerance for disappointing crops has fallen. Markets that only a few months ago were comfortable pricing abundant supplies are increasingly being forced to attach a higher risk premium to future availability, particularly as disruptions to planting, harvesting and export logistics can amplify the impact of an initially modest production setback.

Copper remains supported

Industrial metals have lagged the broader commodity rally during August, but zinc and copper remain important exceptions. LME copper is heading for a ninth consecutive weekly gain and continues to trade within a well-defined uptrend close to record levels, while zinc surged to a four-year high amid signs of ore shortages before slipping back, but remains on track for a 7% gain. Both markets are displaying signs of near-term supply tension after a turbulent few weeks in which dwindling inventories in London Metal Exchange warehouses drove the cost of metal for immediate delivery well above prices for future delivery.

With regard to copper, one unusual feature of the current market is the geographical distortion in inventories. Huge volumes of refined copper have accumulated in the US ahead of the possibility of future import tariffs, effectively pulling metal away from other markets. COMEX inventories have risen to record levels while available stocks elsewhere have tightened.

This does not necessarily mean the world is running out of copper. Indeed, some forecasts still point towards a global refined-metal surplus this year. Rather, trade policy and arbitrage have created a regional mismatch between where copper is located and where it is needed. However, combined with mine disruptions, smelter constraints and continued demand for this important energy transition metal, that mismatch has been enough to keep the market tight and prices elevated.

Crude softens as more barrels move through the Strait of Hormuz

Oil prices have fallen sharply this week as the market increasingly senses that both Washington and Tehran are looking for an exit ramp from a conflict that has imposed a heavy economic cost on both sides. Energy has therefore moved in the opposite direction during the latter part of August. Brent crude has fallen back below USD 90 per barrel and is heading for its first weekly decline in three weeks as traders cautiously price an improvement in Gulf exports and the possibility of an eventual reopening of the Strait of Hormuz.

Ship-tracking data supports that view, pointing to increased activity through the Strait of Hormuz and helping to underpin expectations of a gradual improvement in supply. Persian Gulf producers are increasing exports, with Goldman Sachs estimating that flows have recovered to around two-thirds of pre-war levels. Crude transits through the Strait are now estimated at 6–8 million barrels per day.

The improvement is nevertheless uneven. While the outlook for crude supply has become less constrained, refined-product markets remain extremely tight. Refinery capacity within the Gulf is still impaired, while a temporary ban on Russian exports has removed additional supplies from international markets. As a result, the market is experiencing a growing divergence between improving crude availability and continued shortages of gasoline and distillates.

The latest weekly update from the US EIA showed that refinery utilisation had risen to its highest seasonal level since 1998. Record refining margins have incentivised refiners to maximise production, while export demand has remained strong because of the Russian export ban and stranded capacity in the Persian Gulf. Even with refiners operating at such high rates, gasoline inventories fell to their lowest seasonal level since 2012, at 209.4 million barrels. Distillate inventories also plunged to a record low of 105.6 million barrels.

This helps explain why energy can underperform even while geopolitical risks remain unusually elevated. Crude prices are trading the direction of change in supply disruption rather than its absolute level, while tight refined-product inventories continue to signal that the physical market remains vulnerable to further shocks.

Elevated spread between crude and refined products remain - Source: Bloomberg & Saxo

Commodities as a portfolio allocation

The increasingly broad nature of this year's rally also highlights why commodities can play a role beyond short-term tactical trading. A broad allocation to commodities can provide an additional source of long-term returns and potentially help protect portfolios during periods when rising inflation expectations challenge both equities and bonds. The drivers are also becoming increasingly diverse.

Oil demand remains strong, with continued growth expected over the coming years, particularly across emerging economies. Industrial metals, in particular copper, should benefit from structural demand linked to electrification, the energy transition and the ongoing global buildout of AI-related infrastructure. Meanwhile, increasingly volatile weather, including the developing El Niño pattern, could restrict agricultural supply and keep food commodity markets sensitive to production setbacks.

None of these themes provides a straight line to higher prices. A diplomatic breakthrough in the Middle East could remove additional risk premium from energy, improved weather could quickly pressure agricultural markets, while slower global growth would challenge industrial-metal demand. Precious metals could also face renewed profit-taking should real yields and the dollar strengthen further.

For now, however, the message from August is clear. The commodity rally is no longer being carried primarily by barrels. Bullion and bushels have joined the advance, and with war, weather, trade policy and fiscal concerns affecting different parts of the complex, scarcity in its various forms remains the dominant theme.

The chart shows the five-year performance of the BCOM TR and some of its underlying components. The index gained 76.7%, led by a 162.8% increase in precious metals (gold and silver), while agricultural and industrial metals lagged, rising by around 36%.

Five-year performance of the BCOM TR index and some of its underlying components. - Source: Bloomberg Note: Past performance is not indicative of future results

Related articles/content
26 Aug 2026: Grains hit two-year high as war weather and logistics tighten supply 26 Aug 2026: From escalation to exit ramp why oils war premium is unwinding again 25 Aug 2026: Gold pauses after powerful four-day rally 24 Aug 2026: COT on forex and commodities - Week to 18 August 2026 21 Aug 2026: Commodities Weekly Weather war and debt broaden the commodity rally Educational resources: A short guide to trading crude oil The basics of trading wheat online A short guide to trading gold A short guide to trading copper A short guide to trading silver Gold, silver, and platinum: Are precious metals a safe haven investment? Daily podcasts hosted by John J Hardy can be found here

Related articles/content

26 Aug 2026: Grains hit two-year high as war weather and logistics tighten supply
26 Aug 2026: From escalation to exit ramp why oils war premium is unwinding again
25 Aug 2026: Gold pauses after powerful four-day rally
24 Aug 2026: COT on forex and commodities - Week to 18 August 2026
21 Aug 2026: Commodities Weekly Weather war and debt broaden the commodity rally

Educational resources:
A short guide to trading crude oil
The basics of trading wheat online
A short guide to trading gold
A short guide to trading copper
A short guide to trading silver
Gold, silver, and platinum: Are precious metals a safe haven investment?

Daily podcasts hosted by John J Hardy can be found here

More from the author
Ole S Hansen's articles on Saxo For market commentary and insights - not trading advice - follow me and join the conversation on Twitter and Substack

Topics: Commodities Crude Oil Gasoline Energy (Sector) Iran USA Agriculture Gold Silver Copper Corn Wheat Sugar

The Week Ahead: Jackson Hole reaction, nonfarm payrolls & semiconductor earnings

Fri, 28 Aug 2026 11:30:00 Z

Your guide to the trading calendar over the week of 31 August - 4 September.

Note: This is marketing material. This article is not investment advice, capital is at risk.

Reaction to Fed chair Kevin Warsh’s remarks at Jackson Hole will continue to drive the market ahead of the FOMC’s meeting of 15/16 September. At the end of the week the key August nonfarm payrolls report will show whether the Fed needs to have any concerns about the labour market. Tech earnings continues with semiconductor stock Broadcom and cyber security firm Palo Alto Networks among the highlights. Canada and New Zealand have interest rate decisions in focus and Eurozone CPI inflation will be watched ahead of an expected rate hike later this month by the European Central Bank.

Here’s the key things to watch over the next week.

Monday, 31 August

Reaction to Warsh’s Jackson Hole speech will drive the tape on Wall Street, particularly the bond market. UK markets are closed for the late summer bank holiday so it’s going to be quiet in London, but there are some economic releases to watch for FX crosses – Japan's preliminary industrial production and retail sales figures; China’s manufacturing and non-manufacturing PMIs plus Germany’s preliminary CPI inflation data – a key leading indicator for the Euro area report later this week.

Tuesday, 1 September

The main focus on the economic calendar is the flash estimates for CPI inflation in the Eurozone during August. July’s data showed inflation ticking up to 2.9% from 2.8% in June, underlining the hawkishness we have seen from the European Central Bank and expectations for it to raise rates again at its September meeting. The ECB's Isabel Schnabel said the central bank might need to characterise growth risks to the upside, such has been the resilience of the Eurozone economy in the teeth of the US-Iran war. Last week data showed Germany’s economy grew 0.3% in Q2 2026, revised up from 0.2%.

Palo Alto Networks reports fiscal 2026 Q4 earnings. Revenues at the cybersecurity firm reached $3.0 billion in Q3, a 31% increase year-over-year. At its last earnings it guided Q4 revenues to be between $3.345 billion and $3.355 billion, with non-GAAP EPS between $0.96 and $0.98. In the UK, distribution and outsourcing company Bunzl reports half-year results.

Wednesday, 2 September

Broadcom earnings form the next test of sentiment for the AI trade, with the semiconductor name reporting fiscal third quarter results after the market close. Expectations are running high, particularly in the wake of the Nvidia earnings beat. Q2 revenues rose 48% year-on-year to $22.2 billion while AI semiconductor revenue grew at a staggering +143% to $10.8 billion. Management has guided Q3 revenue of around $29.4 billion, which would see growth reaccelerating to more than 80% Yoy, with AI semiconductor revenue growth picking up the pace to more than double. Elsewhere, Hewlett Packard Enterprise and Snowflake are also due to report earnings.

On the macro level, we look to central bank decisions from Canada and New Zealand. With inflation running above 4%, the Reserve Bank of New Zealand is likely to raise rates by 2bps to 2.75% at the meeting with its projections expected to show a 3% level for its benchmark OCR rate of 3% by the end of the year. For the Bank of Canada the calculation seems to be moving in the opposite direction after the collapse of trade talks with the US leading to a fresh round of tariffs. The BoC is expected to stand pat on rates this time and will be watching closely the shift in trade negotiations.

Thursday, 3 September

Markets will be largely focused on a range of economic releases, particularly the US ISM services PMI and weekly unemployment claims data. Earnings season is almost over but watch for Lululemon and Docusign, while in the UK we have half-year results from M&G.

Friday, 4 September

Following the inflation data and Jackson Hole meet the focus for Fed watchers swings to the latest report on the US labour market. An unexpectedly soft print for July left market participants trimming expectations for a rate hike in September. July's nonfarm payrolls showed a drop of -23k jobs and more than -100k in downward revisions. And while the unemployment rate declined to 4.1% this was due to a decline in participation. Worker pay was virtually flat over the month with the 12-month increase in average hourly earnings sliding to +3.2%, the lowest since May 2021.

As noted previously however, the breakeven employment rate has changed dramatically, which has implications for these monthly jobs reports.

The Fed itself notes that "employment growth in any given month is almost as likely to be negative as it is to be positive. Furthermore, these negative prints of job growth could be large in any given month [...] it would not be unusual for there to be one or more months in 2026 with declines in total payroll employment as large as -100,000 jobs, even if economic output was growing at the rate of potential output growth.”

The –23k print therefore should come as not entirely unexpected even if the economy if rattling along just fine. The average of the last 12 months is now +34k, which is still above the zero-line implied by the Fed's research as being just fine. The market will want to know if there is any reason the Fed needs to be worried about the labour market Despite the well-known shift in the employment breakeven rate and the persistently high inflation level, coupled with uncertainty over the Fed’s reaction function and framing of the current outlook, another negative read would probably see the market all but price out a rate hike at the September FOMC meeting.

Neil Wilson

Investor Content Strategist

Saxo Bank

Topics: Equities United Kingdom Highlighted articles UKMustRead UK Generic Disclaimer FR US Actualites et Analyses Trump Version 2 - Investors Volatility investor TagFeed En hurtig tanke

After Nvidia, where does the AI money go next?

Fri, 28 Aug 2026 11:00:00 Z

Key takeaways

Nvidia confirms strong AI computing demand, but the spending chain is becoming much broader.
Proprietary data and workflows may gain value as powerful AI models become easier to access.
More autonomous AI creates new needs around identity, security and recovery.

Nvidia’s results on 26 August 2026 confirmed that demand for artificial intelligence (AI) computing remains enormous. But this earnings week also suggested that the AI opportunity is starting to spread well beyond the graphics processing unit (GPU).

Across chips, software and cybersecurity, a clearer picture is emerging of what comes next. AI increasingly needs three things to scale: compute to run, context to become useful, and control to be trusted.

Compute is becoming more specialised

Marvell designs chips and networking technology for data centres. Revenue rose 37% to a record 2.74 billion USD, with Data Center revenue up 46%.

Its results also show the gap between winning a design and earning the revenue. Marvell secured a major custom-chip agreement with Google, but management said the biggest contribution should arrive later, particularly from fiscal 2029.

Synopsys sells software and intellectual property used to design complex chips and systems. Revenue reached 2.48 billion USD, up about 42%, while management raised its outlook and pointed to AI-driven complexity.

As hyperscalers build more customised infrastructure, value can spread towards companies that help design, connect and optimise specialised systems.

Context may become software’s new moat

Powerful AI models increasingly have similar general capabilities. What they do not automatically have is a company’s customer history, payroll records, engineering designs and business rules.

That gives established software companies an interesting asset: context.

Salesforce stores customer and sales data. Agentforce and Data 360 annual recurring revenue (ARR) reached nearly 3.9 billion USD, up more than 210%. Its expanded Anthropic partnership makes the logic clear: Salesforce can make Claude more useful by connecting it to trusted data, workflows and governance.

Workday manages human resources and finance processes. AI products generated more than 25% of new annual contract value, while more than 5,500 customers now use at least one Workday agent.

Autodesk extends the argument into engineering and construction. Its software sits inside project workflows, giving AI access to rich technical context. Management argues that useful AI in the physical world requires trusted project data.

If intelligence becomes easier to access, the moat can migrate from owning the model to owning what makes the model useful.

Control becomes more valuable as AI gains autonomy

The third layer appears when AI stops answering questions and starts taking actions.

A company running thousands of agents must know which agent is acting, what it can access and how to recover if something goes wrong.

CrowdStrike protects devices and cloud systems. Its Falcon Flex ARR exceeded 2.29 billion USD, up 101%, suggesting customers increasingly want a broader security platform.

Okta manages digital identities and access. Revenue grew a more modest 11%, which is a useful reminder that a convincing AI story is not the same as proven monetisation. Still, every agent needs an identity and permissions.

Rubrik adds recovery and data protection. Subscription ARR rose 33% to 1.66 billion USD, while its strategy increasingly includes securing AI-agent activity.

More autonomous AI can therefore create some of the security spending needed to make further adoption possible.

The risks are moving too

Custom-chip projects can take years to scale. Software companies may own valuable data without successfully charging more for AI access. Security vendors may face tougher competition as larger platforms bundle more tools.

Watch delayed production ramps, weak AI-related contract growth and rising usage that fails to become recurring revenue.

Investor playbook

Separate AI exposure into compute, context and control rather than treating every AI company as the same trade.
Track conversion, not announcements. Design wins, pilots and agent usage matter when they become revenue and cash flow.
Ask whether AI strengthens an existing moat, such as proprietary data or embedded workflows.
Keep diversification in mind. The AI value chain is widening, but expectations can widen even faster.

From compute to context and control

Nvidia remains the clearest proof that the AI infrastructure boom is alive. Yet this earnings week suggests the opportunity is becoming broader and more layered. Marvell and Synopsys help build specialised infrastructure. Salesforce, Workday and Autodesk give AI the business context it needs. CrowdStrike, Okta and Rubrik help companies trust it enough to act.

That does not make every company in the chain a winner. It does give investors a more useful map. The first phase rewarded scarce computing power. The next may reward scarce context and control. Compute makes AI possible, context makes it useful, and control makes it deployable at scale.

Topics: Equities Highlighted articles UKMustRead Theme - Artificial intelligence Artificial Intelligence

Can Fed Chair Warsh give the market what it wants?

Fri, 28 Aug 2026 09:27:00 Z

Is clarity too much to ask for?

Listen to the full episode now or follow the Saxo Market Call on your favourite podcast app.

Questions and comments, please!

Saxo Market Call

Saxo Bank

Topics: Podcast Highlighted articles Forex

Market Quick Take - Tech earnings lift a narrow market as Warsh takes the Jackson Hole stage - 28 August 2026

Fri, 28 Aug 2026 06:02:00 Z

Market drivers and catalysts

Macro: Jackson Hole and Fed Chair Kevin Warsh’s speech are the session’s key focus
Equities: US technology surged on earnings strength, Europe fell on French political risk, Asia traded cautiously ahead of Jackson Hole.
Digital Assets: Bitcoin holds near 80k and a back-to-back weekly gain
Commodities: Crude firms despite rising Gulf exports; gold holds below USD 4,600 ahead of Warsh speech; wheat and corn post strong weekly gains
Fixed Income: Yields pull higher, still within recent range below cycle highs.
Currencies: USD edges to local highs ahead of Fed Chair Warsh speech

Macro

Jackson Hole is the session's single reference point. Fed Chair Kevin Warsh delivers his first symposium keynote as chair at 14:00 GMT, and positioning has been built around a hawkish tone intended to anchor long yields. The speech lands 19 days before the 16 September FOMC, with money markets pricing roughly a one-in-three chance of a September move after a run of softer prints.
Two Asian central banks moved the other way. Tokyo CPI excluding fresh food rose 1.8% year-on-year in August, accelerating for a third consecutive month and strengthening the case for a Bank of Japan increase, with September now in focus. The Bank of Korea delivered a back-to-back 25 basis point rise to 3.00% in a six-to-one decision, citing an unprecedented semiconductor boom driving stronger-than-expected growth.
More in our Macro Analysis & Macroeconomic News

Macro calendar highlights (times in GMT)

0645 – France Flash Aug. CPI
0700 – Spain Flash Aug. CPI
0755 – Germany Aug. Unemployment Claims / Unemployment Rate
1230 – Canada Jun. / Q2 GDP estimate
1345 – US Aug. Chicago PMI
1400 – Fed Chair Kevin Warsh speech at Jackson Hole
1400 – US Aug. Final University of Michigan Sentiment survey

Today, at the Jackson Hole gathering of central bankers, Fed Chair Kevin Warsh will deliver his first keynote, and while he is likely to deliver thoughts on the potential use of stablecoins for financial system plumbing, the market is more curious about the Fed’s interest-rate policy intentions.

Earnings events

Tuesday: Palo Alto Networks, Medtronic, MongoDB, Credo Technology, NIO, GitLab, Dell Technologies
Wednesday: Broadcom, Snowflake, Hewlett Packard Enterprise, NetApp, Five Below
Thursday: Zscaler, Lululemon, Ciena, Samsara, DocuSign, Planet Labs

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

Equities

USA: The S&P 500 rose 0.7%, the Dow gained 0.2% and the Nasdaq 100 advanced 1.4%, although technology almost entirely drove the rally and the equal-weight S&P 500 fell 0.3%. Nvidia surged 8.7%, adding $442 billion in market value after guiding for roughly 70% revenue growth in fiscal 2028, while Salesforce jumped 22.6% on a strong outlook and deeper Anthropic partnership. CrowdStrike rallied 20.5% after strong earnings and higher guidance. After hours, Gap gained 13.3% after raising its earnings outlook, while Marvell fell sharply as its Google deal failed to meaningfully lift its longer-term revenue outlook.
Europe: The Stoxx 600 fell 0.7%, its biggest decline since 23 July, while the FTSE 100 dropped 0.8% as French political uncertainty weighed on sentiment. France’s CAC 40 underperformed ahead of a key presidential debate, with BNP Paribas falling 4.8% and infrastructure group Eiffage sliding 7.4% as investors reassessed political and fiscal risks. Pernod Ricard also weakened after warning that growth would land at the lower end of expectations. Germany bucked the trend, with the DAX rising 0.3% as SAP gained 5.5% on renewed enthusiasm around artificial intelligence following Nvidia’s results.
Asia: Asian markets opened cautiously on Friday ahead of Federal Reserve Chair Kevin Warsh’s Jackson Hole speech, with the Kospi falling around 1.1% at the open despite Nvidia’s strong results. South Korean memory shares weakened as investors digested the Bank of Korea’s second consecutive rate increase, while Nikkei 225 futures were broadly flat ahead of Tokyo inflation data and a Japanese government bond auction. Singapore’s STI had fallen 0.7% on Thursday, with Genting Singapore down 2.3% and Venture Corp up 1.7%. Baidu gained as much as 4.2% in Hong Kong after confirming its move to a dual-primary listing from 1 September.
More in our Equity Trading - Stock Market Analysis & News

Digital Assets

Fear readings fell sharply after the technology earnings. VIX dropped 4.73% to 14.50 while same-day VIX1D fell 10.77% to 11.52 and VIX9D 9.23% to 12.10. Nasdaq volatility eased 5.51% to 20.24 and VVIX 2.75% to 82.90.
The curve held a steep contango, 12.10 at nine days against 17.56 at three months, with the front future at 16.70 and SKEW elevated at 144.05. MOVE firmed 0.61% to 69.86. SPX options imply 0.55% today and 1.25% into Friday 4 September, with Jackson Hole the catalyst. Expected-move figures are option-implied, not forecasts; options carry a high risk of rapid loss.

Commodities

Oil: Oil held onto Thursday’s gains, with Brent rising towards USD 90 as prospects for a US-Iran agreement to fully reopen the Strait of Hormuz faded. The White House said the US is not negotiating with Iran and that the blockade of Iranian ports will remain in place. Despite the lack of a diplomatic breakthrough, crude is still heading for its first weekly loss in three weeks as flows through Hormuz continue to recover. Persian Gulf producers are increasing exports, with Goldman Sachs estimating that flows have reached around two-thirds of pre-war levels and crude transits through the Strait now running at an estimated 6–8 million barrels per day.
Gold: Gold holds below USD 4,600, having spent the latter part of the week consolidating following recent strong gains as investors weigh the outlook for US interest rates ahead of today’s key speech by Fed Chair Warsh. Gold has gained around 13% this month, supported by fiscal debt concerns and a renewed focus on currency debasement. Those gold-supportive concerns have not gone away, but for now traders are focused on Warsh and the trajectory of short-term rates, with a full 25-basis-point hike priced in before year-end.
The broad-based Bloomberg Commodity Index trades broadly unchanged on the week following strong gains during the previous three. Lower energy prices and profit-taking across precious metals have offset another strong week for agriculture, particularly grains, where prices reached a two-year high led by gains in corn and wheat amid mounting supply concerns. For the month, the BCOM is up 6.4%, supported by double-digit gains across precious metals, softs and grains, highlighting the increasingly broad-based nature of the commodity rally.
More in our Commodity News, Analysis & Commentary

Fixed Income

Treasuries traded slightly weakly on Thursday as yields at the front end of the curve edged back toward recent highs near 4.25% ahead of Fed Chair Warsh’s Jackson Hole, Wyoming speech later Friday, while longer-dated yields were also marginally higher, if still trading near the middle of the recent range for the 10-year and 30-year Treasury yield benchmarks.
US high-yield bond yield spreads to US Treasuries have narrowed to their tightest levels in well over a month, with the Bloomberg measure we track of the spread at 263 basis points, matching the low since early July and not far from the record post-GFC low of 250 basis points.

Currencies

The US dollar remains in a holding pattern amidst muted volatility across currencies and ahead of Fed Chair Warsh’s highly anticipated Jackson Hole, Wyoming speech, slightly firmer as EURUSD has slipped just below 1.1650 and USDJPY squeezed back above 159.50, eyeing the odds of official intervention to weaken the JPY should 160.00+ trade.
More on currencies in our dedicated section: Forex Trading News & Analysis

Saxo Bank

Nvidia does what it can to bring cheer. Dark geopolitics still lurk in the background.

Thu, 27 Aug 2026 09:32:00 Z

Nvidia lifts AI sentiment.

Listen to the full episode now or follow the Saxo Market Call on your favourite podcast app.

Questions and comments, please!

Saxo Market Call

Saxo Bank

Topics: Podcast Highlighted articles Forex

London Quick Take - 27 Aug - FTSE tech stocks gain as Nvidia, Salesforce, Crowdstrike post strong earnings while dollar hits 1-week high after sticky US inflation

Thu, 27 Aug 2026 06:20:00 Z

Note: This is marketing material. This article is not investment advice, capital is at risk.

Gains today largely confined to tech. A mixed start in Europe with London and Paris trading lower while Frankfurt was a little firmer. Across the Stoxx 600 only tech was up early this morning despite progress in the Middle East that is pushing crude futures back to yesterday's two-week low. Tech funds led the FTSE 100 on Thursday after Nvidia smashed expectations; Scottish Mortgage and Polar Capital among the top risers along with tech names Sage and Computacenter. But the blue chips traded down -0.5% as oil majors and some of the other larger weightings in the index slipped. The DAX outperformed as it has more tech - the FTSE 100 has very little so it's struggling. The early mixed picture turned decisively more bearish as the morning wore on with the FTSE 100 extending losses to trade -0.9% and the DAX turned negative by around 10am UK time as oil prices turned +1% higher off their lows at 7am. Stock futures in the US were firmer early Thursday as Nvidia’s results lifted sentiment across the tech and AI sectors, after all of the DJIA, S&P 500, Nasdaq and Russell 2k fell marginally on Wednesday. Overnight this tech boost fed into a +1.5% gain for the Kospi in Korea.

Nvidia delivered on pretty much all fronts and signalled AI demand is even stronger and last longer than thought. Shares rose +8% higher in pre-market trade after management guided 70% growth in fiscal 2028 vs. current expectations of 45%. Customer forecasts point to growth doubling next year but supply constraints are dragging. A couple of potential headwinds were flagged - memory costs are set to pull gross margin from 75% towards 71–72%, bottoming out in the fourth quarter, while free cash flow fell 56% quarter-on-quarter. And Nvidia is far from immune to higher bond yields – for the first time the company broke out indebtedness as a risk factor. But lots of questions were answered both in the results and on the earnings call that will keep investors happy. Charu has more on Nvidia's earnings here.

A big overhang for Meta stock was removed after the Facebook and Instagram owner agreed a settlement to resolve claims brought by California and other states over allegations the sites harm young users and that it misled consumers and improperly collected children’s personal data. Meta agreed to pay up to $16.68bn as part of the settlement. Whilst not an insignificant amount shares rose on the news as it could have got a lot messier and costlier. Meta said before the trial that California, Colorado, Kentucky and New Jersey were seeking up to $1.4tn, though the states said the figure was likely closer to $200bn. But, of course, we should note that Meta and other social media stocks still face a deluge of lawsuits in the US. Shares traded up +4% in pre-market but were down early before finishing up a modest +1% on the news. And there were other good news stories from the tech space with Salesforce rallying +13% as revenues beat forecasts, Crowdstrike +10% as it beat and raised its outlook, and Okta +20% on booming demand for its agentic AI.

Crude prices tracked lower after Iran and Oman said they’d agreed terms on managing traffic and revenues from the Strait of Hormuz, a critical step towards it reopening properly. Although Tehran said reopening the waterway requires more than this deal, it’s clearly progress. President Trump said 10 million barrels moved through the strait on Tuesday, which be an overestimate but also reveals that a lot of oil is leaking out. Brent trades with an $86 handle early Thursday with resistance at the 20-day SMA at $87.70 holding the topside, with yesterday’s lows at $85.40 the big downside test for bears. There had been a big rebound on Wednesday with prices jumping to almost $90 on reports Russia was threatening to escalate the war in Ukraine. More on oil from Ole here.

Inflation is hotter and stickier than a stalled Jubilee Line during a London summer. PCE inflation rose 0.2% for the month and +3.7% for the year, ahead of expectations. Core PCE posted +0.2% MoM and +3.3% YoY, in line with forecasts. Core PCE was 3.0% using a three-month annualised rate and 3.5% six-month annualised. So-called ‘supercore’ services was unchanged, at 3.8% YoY, which points to persistently sticky service-sector inflation. All told it means inflation has been above the Fed’s target for well over 5 years and ought to strengthen the case for a rate hike next month.

Market-based expectations for the Federal Reserve to hike rates next month ticked down a shade however, with bond yields holding steady; the 10yr at 4.65% from a high last week at 4.75%, while the 2yr note is a little above 4.2%. The problem is the market doesn’t understand yet the reaction function of the Fed under its new chair. All eyes are on Kevin Warsh’s speech at Jackson Hole tomorrow, which may or may not provide some framing for the current picture. Boston Fed President Susan Collins said the June and July inflation reports were "mildly encouraging" but “it will be appropriate to tighten policy soon" if the decline in inflation doesn’t happen.

In addition to the PCE inflation report for July we had the second reading for Q2 GDP and prices. GDP slowed in Q2 to +1.5%, which reflected lower government spending, slower investment and export growth, and an increase in imports. Stronger consumer spending was notable as a partial offset with real final sales to consumers rising +4.2%, revised up from +3.9%. Inflation was revised higher with the gross domestic purchases price index +5.8%, while headline PCE rose 5.3% and core PCE increased 3.6%.

Still talking about Bessent’s buybacks and subsequent remarks...so much has been written about it, (and not all of it by AI!). But the key is that Treasury has signalled it won’t tolerate higher yields and the market will test its resolve. Stan Druckenmiller is correct in pointing out that once the market believes Treasury is defending a particular price, any increase in yields is test of policymakers. What Bessent has committed to is small potatoes and has not had much impact on yields – which seem to have declined chiefly on oil prices falling. The intervention is small and he is effectively inviting the market to find out where the real threshold for pain and a response lies. The reaction function seems clear enough but it’s not being tested. Therefore, at some point the market will move in a way that would force Treasury to walk the talk – ie commit capital. I wouldn’t be surprised if this means we see a much bigger intervention than talked about so far. If the bond market is not allowed to express price discovery fully then the dollar becomes the release valve. The key is whether the 10yr Treasury breaks the 5.25% resistance, the high points from the 2006/07 era – currently it sits around 4.70% but if we’ve learnt anything from the last week it’s that both Wall Street and Washington are concerned about rising deficits. Debasement trades have faded a touch with gold now finding near-term resistance at $4,600 having failed to make good on the drive to $4,700. Yesterday's low at $4,582 may provide some support as price action consolidates around the $4,600 area following the momentum breakout. Meanwhile, the dollar index has risen to a one-week high and Bitcoin is holding below $79k. This is probably a bit of a pause rather than a top for the debasement trade but one to watch with the Warsh speech likely to spark moves in these trades.

Neil Wilson

Investor Content Strategist

Saxo Bank

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Market Quick Take - Nvidia rises on strong earnings and growth outlook - 27 August 2026

Thu, 27 Aug 2026 06:02:00 Z

Market drivers and catalysts

Macro: A firmer inflation print hardened the case for another rate rise this year.
Equities: US stocks were flat before Nvidia’s beat, Europe was steady, Asian chip shares rallied as Nvidia reinforced artificial intelligence demand.
Digital Assets: Coins drifted and the miners were sold hard while fund inflows kept building.
Commodities: Wheat hits three-year high on Russia-Ukraine tensions; oil gyrates and gold consolidates.
Fixed Income: US and European yields rebounded Wednesday.
Currencies: Very muted volatility ahead of Fed Chair Warsh Jackson Hole speech Friday. CHF weak again on carry trade appeal.

Macro

Inflation came in a shade warmer than expected. The July PCE price index rose 0.2% month-on-month after a 0.1% fall in June, above the 0.1% forecast, with services prices up 0.3% and goods 0.1% lower. Core PCE also rose 0.2%. Year-on-year the headline rate held at 3.7% (versus expectations for a dip to 3.6%) and core at 3.3%. Money markets responded by moving to fully price a December rate hike from the Federal Reserve.
The activity data was firmer than the growth print. Personal spending rose 0.2% against a 0.1% forecast, though down from 0.3% in June and roughly flat in real terms. Durable goods orders rose 1.1%, the strongest since April and double the forecast, led by transportation with gains in capital goods, metals and machinery; ex-transport orders rose 0.4% and the core capital goods capex proxy 0.2%. Second-quarter GDP growth was confirmed at a 1.5% annualised rate, down from 2.1%.
The Strait of Hormuz story moved another step toward resolution. Iran and Oman agreed terms for sharing the waters and the revenues of the strait, though Tehran said reopening the waterway requires more than this deal. President Trump said 10 million barrels moved through on Tuesday and repeated that the mines have been cleared. New US sanctions on Iran landed milder than feared.
Wheat prices hit a three-year high as concerns grow the war between Russia and Ukraine could escalate and further disrupt supplies from a region that supplies more than 25% of global wheat exports, as well as large amounts of barley, corn and sunflower oil, raising the risk of another round of food inflation on top of the one caused by higher energy prices.

More in our Macro Analysis & Macroeconomic News

Macro calendar highlights (times in GMT)

0600 – Germany September GfK Consumer Sentiment
1230 – US July Advanced Goods Trade Balance
1230 – US Weekly Initial Jobless Claims
1700 – US to Sell USD 44 billion 7-year Notes

The Jackson Hole gathering of central bankers starts today and runs through Saturday, with Chair Kevin Warsh delivering his first keynote tomorrow. The theme of the symposium is titled “Financial Innovation: Implications for Payments and Policy” – seen as likely to deliver thoughts on the potential use of stablecoins for financial system plumbing, but the market is more curious about the Fed’s interest rate policy intentions.

Earnings events

Thursday: Marvell Technology, Autodesk, Workday, Rubrik, Pernod Ricard

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

Equities

USA: The S&P 500 finished little changed, the Dow fell 0.2% and the Nasdaq 100 rose 0.1% as firmer US inflation lifted Treasury yields ahead of Nvidia’s results. Nvidia fell 1.6% in regular trading before jumping over 5% after hours as quarterly revenue more than doubled and management guided third-quarter sales to about $108 billion, while forecasting roughly 70% revenue growth in fiscal 2028. Salesforce surged almost 13% after hours after raising its annual outlook and expanding its Anthropic partnership through Claudeforce. Attention shifted to whether Nvidia’s optimism could lift artificial intelligence shares more broadly and to Fed Chair Kevin Warsh’s Jackson Hole speech on Friday. CrowdStrike surged almost 10% after hours after beating earnings expectations, with revenue up 26% year on year and full-year guidance raised to $5.99–6.01 billion.
Europe: The Stoxx 600 finished flat, while the DAX gained 0.1%, the CAC 40 rose 0.3% and the FTSE 100 slipped 0.1% as investors balanced softer oil prices against caution in technology and healthcare. Ambu dropped 15.8% after cutting its growth outlook and receiving a Nordea downgrade, while Ferrovial fell 5.0% after UBS downgraded the shares on concerns about returns from its planned Tennessee toll-road project. The broader market remained in wait-and-see mode, with Nvidia’s stronger outlook providing a fresh test for Europe’s semiconductor and technology shares today.
Asia: Asian equities turned mixed after an early Nvidia-led surge. South Korea’s Kospi was up around 1% by midday after opening 2.8% higher, while Japan’s Nikkei fell 0.2% and Hong Kong’s Hang Seng slipped 0.4% as the Bank of Korea’s second consecutive rate hike cooled the Korean rally. Earlier, SK Hynix gained around 3% and Samsung Electronics rose 2.3% as Nvidia’s results reinforced expectations for strong artificial intelligence-related memory demand. The Bank of Korea raised its policy rate by 25 basis points to 3.0%, shifting attention from the earnings boost back toward inflation and borrowing costs.

More in our Equity Trading - Stock Market Analysis & News

Digital Assets

The coins drifted and the listed miners took the brunt. IREN fell 6.23% ahead of its results tonight, Marathon 5.16%, CleanSpark 4.47% and Riot 3.24%, while Coinbase and Strategy both fell 2.87% and Circle 2.29%. Deribit's implied volatility gauge eased to 40.24.
US spot bitcoin funds extended their inflow run to a seventh session, drawing USD 314 million on Tuesday. That takes August to USD 3.03 billion and has more than halved the year's cumulative net outflows, to USD 2.26 billion.

Commodities

Agriculture: Wheat futures in Chicago hit a three-year high as concerns grow that the war between Russia and Ukraine could escalate further and disrupt supplies from a region that accounts for more than 25% of global wheat exports. Ukraine is already facing a drop of more than 50% in agricultural exports this season compared with previous estimates, according to its agriculture ministry. Meanwhile, Russia’s wheat shipments are expected to fall by more than 50% in August from a year earlier. Overall, these developments are squeezing farmer cash flow, potentially affecting planting and next year’s production.
Oil: Crude prices rebounded strongly on Wednesday, with Brent rising from below USD 86 to near USD 90 on reports of a potential Russian escalation in Ukraine, before reversing on news of an Iranian revenue-sharing agreement covering shipping through the Strait of Hormuz. Prices are down around 8% from Monday’s peak amid renewed Middle East supply optimism, while US inventory data highlighted continued stress in refined products, with gasoline stocks falling to their lowest seasonal level since 2012 and diesel inventories to a record low, just ahead of the winter demand season.
Gold: Bullion continues to consolidate following last week’s surge, with prices so far finding support below USD 4,600, ahead of the USD 4,555 level, the 0.382 Fibonacci retracement of the latest rally. Attention is now turning to Fed Chair Kevin Warsh’s speech at the Jackson Hole symposium tomorrow, with markets looking for further guidance on the interest-rate outlook and how policymakers view the balance between inflation, growth and financial conditions. Following the latest inflation print, one full 25-basis-point hike is now priced by December.

More in our Commodity News, Analysis & Commentary

Fixed Income

Treasuries came back under pressure on Wednesday, reversing part of the prior day’s move. A jump in yields occurred around the release of the July PCE inflation data (core PCE as expected but headline PCE data a bit hotter than expected as noted above) and the release of the revised GDP core price index for Q2, which was revised higher to an annualized rate of 3.6% from 3.4%. The benchmark 2-year Treasury yield rose back above 4.21% after trading below 4.17% intraday, while the benchmark 10-year reversed less of Tuesday’s drop in yields, ending the day near 4.65% after dipping as low as 4.613%.
Europe’s bond yields rebounded sharply Wednesday, reversing more of Tuesday’s sharp drop in yields that was apparently prompted by the plunge in crude oil prices. The benchmark German 10-year Bund dropped as low as 3.185% near the open of trading Wednesday, only to close back above 3.23%.

Currencies

Currency volatility is extremely muted, in part driven by uncertainty surrounding Fed policy direction, low volatility in other asset classes, and perhaps traders steering clear of trading the Japanese yen on fears of official intervention. Across the G10 currencies, the average daily trading ranges for nine of the ten (NOK is the exception, linked to oil market volatility) are in the bottom 20% for the last 1,000 trading days, with EUR and USD pairs in the bottom 5% and 7% of trading ranges, respectively.
The Japanese yen weakened slightly, trading toward the weaker side of the recent range in USDJPY since the massive wave of official intervention back in late July and the beginning of August. Traders will eye the 159.78 high of that range versus 159.32 currently if global bond yields are pressuring higher again and the US dollar likewise.
The Swiss franc has weakened again on the return of the appeal of carry trades (funding currency trades in CHF) as volatility remains low, yields elevated and Switzerland’s SNB is seen maintaining its 0% policy rate for now. EURCHF has rebounded from the 0.9310 low last week to 0.9389 by early Thursday.

More on currencies in our dedicated section: Forex Trading News & Analysis

Saxo Bank

Nvidia earnings: AI boom meets margin test

Thu, 27 Aug 2026 01:45:00 Z

Key points:

Another beat-and-raise quarter: Revenue beat expectations by 4.2%, Q3 guidance came around 4% above consensus and management now expects approximately 70% growth in fiscal 2028 vs. current expectations of 45%, confirming that demand remains stronger than available supply.
Two company headwinds—and one macro hurdle: Memory costs are set to pull gross margin from 75% towards 71–72%, while free cash flow fell 56% quarter-on-quarter. Higher long-term bond yields add a separate valuation headwind for Nvidia and other long-duration AI stocks.
Positive for the AI ecosystem, but increasingly selective: The strongest read-through is for memory, networking, packaging and power infrastructure. Hyperscalers face a more mixed outcome as stronger AI demand comes with higher capex, weaker free cash flow and greater pressure to prove monetisation.

Nvidia delivered another beat-and-raise quarter, but the biggest positive was not the quarterly beat itself. It was management effectively telling investors that AI demand remains supply-constrained even at this scale—and guiding to approximately 70% revenue growth in fiscal 2028 vs. current expectations of 45%.

That is a powerful counter to the narrative that the AI capex cycle is already peaking. But at a market value above $5 trillion, strong demand alone is not enough. Margins, cash conversion and the returns generated by Nvidia’s customers will increasingly determine the next phase of the story.

Revenue gained 106% from a year earlier, while adjusted operating income increased 124%. Hyperscaler revenue also more than doubled, while gross margin was broadly in line with expectations at 75%.

The clearer disappointment was free cash flow. At $21.3 billion, it was reportedly well below forecasts and down sharply from the previous quarter, although it remained 59% higher than a year ago.

Demand was stronger—and broader—than expected

Data Centre revenue reached $89 billion, representing more than 92% of Nvidia’s total revenue.

Within Data Centre, hyperscale revenue rose 13% sequentially to $48.7 billion. Revenue from AI clouds, industrial companies and enterprises increased a faster 25% to $40.3 billion.

That distinction matters. Nvidia is no longer relying exclusively on a small group of US technology giants. AI-native companies, sovereign projects, industrial customers and enterprises are becoming increasingly important sources of demand.

It is still diversification within AI infrastructure rather than genuine business diversification. But it reduces the risk that Nvidia’s growth depends entirely on the capex decisions of four or five hyperscalers.

The biggest bullish surprise came during the call

Management expects revenue to grow by approximately 70% in fiscal 2028, which largely covers calendar 2027. Market expectations had reportedly been closer to 45%.

Nvidia also indicated that it can currently satisfy only around 70% of demand. In other words, the immediate constraint remains supply—not a shortage of customers.

That guidance was the main reason Nvidia shares moved more than 4% higher during extended trading after a more restrained initial reaction to the results.

It also changes the debate around peak growth. A $108 billion quarterly revenue run rate no longer looks like the end of the cycle if Nvidia can deliver anything close to 70% growth next fiscal year.

Rubin execution risk has fallen, but not disappeared

Nvidia commenced production shipments of Vera Rubin in early August, while inventory increased from $25.8 billion to $31.6 billion as the company prepared for the ramp.

This is reassuring because Nvidia is attempting another major architectural transition immediately after scaling Blackwell and Blackwell Ultra. So far, there is no sign of customers delaying spending while waiting for Rubin.

However, beginning production is not the same as proving a smooth, high-volume deployment. The next two quarters will test:

Rubin manufacturing yields;
HBM4 availability;
rack-scale integration;
advanced-packaging capacity;
networking, power and cooling availability;
how quickly customers can install and utilise delivered systems.

The report reduces the risk of a product-transition slowdown, but the scale and complexity of Rubin mean execution remains important.

China is optionality, not part of the base case

China contributed less than 1% of Nvidia’s Data Centre revenue, while the company assumes no China Data Centre compute revenue in its Q3 forecast.

That means the $108 billion guidance does not rely on regulatory relief. Any meaningful reopening would provide incremental upside.

The longer-term risk is that Nvidia’s absence gives Chinese companies a protected market in which to develop domestic accelerators and software ecosystems. Even if restrictions eventually ease, some of that market could be difficult to recover.

For Asian markets, the near-term read-through is most supportive for Korea’s memory suppliers and Taiwan’s foundry, packaging and server supply chains. Nvidia’s continued absence from China, meanwhile, strengthens the strategic case for domestic substitution.

Gross margins are the key earnings tension

Nvidia delivered a 75% gross margin in Q2 but guided to 74% in Q3. Management subsequently indicated that margins could fall to around 71–72% in the January quarter before stabilising around 72–73% next fiscal year.

The biggest pressure is coming from expensive and scarce memory. Nvidia is planning price increases on some upcoming systems, but there is a timing gap between higher component costs and the company’s ability to recover them from customers.

The bullish interpretation is that margins are falling because AI demand is overwhelming the memory supply chain. Nvidia continues to have strong pricing power, while lower margins are more than offset by revenue growth.

The less comfortable interpretation is that Nvidia’s peak economics are being tested by rising system costs, greater complexity and more expensive inputs.

On quarterly revenue above $100 billion, every percentage point of gross margin represents more than $1 billion of gross profit.

Cash conversion was another weak spot

The gap between earnings and cash flow was unusually wide. Adjusted net income reached $54 billion, but free cash flow was only $21.3 billion, implying cash conversion of less than 40%.

This largely reflected a heavy working-capital build:

Accounts receivable absorbed $22.3 billion of cash.
Inventory increased by $5.8 billion.
Days sales outstanding rose from 45 to 60 days.
Cash taxes also weighed on operating cash flow.

Nvidia attributed the increase in receivables to extended payment terms on large, multi-quarter agreements with investment-grade customers. The inventory build reflects preparations for Rubin.

Some of this pressure may reverse as payments arrive and Rubin inventory is shipped, so the FCF decline does not necessarily signal weaker demand. However, it makes the quarter’s earnings quality less clean and deserves monitoring as Nvidia extends customer terms and takes on larger financing commitments. Still, after such a strong run in the stock, cash conversion is now another metric investors cannot ignore.

Nvidia also returned around $26 billion to shareholders during the quarter—more than the free cash flow it generated. The company can comfortably absorb this using its balance sheet and first-half cash generation, but the pace would be harder to sustain if weaker cash conversion persists.

GAAP net income of $59.7 billion also included $7.8 billion of gains on equity securities. Adjusted net income of $54 billion is therefore the cleaner measure of underlying performance.

Nvidia is becoming an AI financier

Nvidia disclosed:

supply and capacity commitments of $279 billion, up from $119 billion last quarter, primarily related to memory;
approximately $366 billion of total future commitments;
another $56 billion of AI-cloud and third-party lease commitments;
maximum gross guarantees of $108.5 billion, including as much as $105 billion connected with the OpenAI and SB Energy data-centre development in Ohio;
partnerships intended to mobilise more than $500 billion of third-party capital for AI infrastructure.

These arrangements can help Nvidia secure scarce supply, accelerate customer deployments and expand its addressable market.

But they also make the company’s risk profile more complex. Investors increasingly need to consider customer credit quality, leases, guarantees, revenue-sharing agreements and Nvidia’s equity investments—not just GPU shipments.

This does not automatically make the revenue circular. It does mean Nvidia is increasingly helping to create and finance the ecosystem into which it sells.

The weaker FCF result makes this development more relevant. Nvidia still has substantial financial flexibility, but expanding commitments alongside rising working-capital requirements could gradually reduce that cushion.

What Nvidia’s results mean for the AI ecosystem

Memory: Nvidia’s margin guidance confirms that HBM and server-memory supply remains tight today, supporting pricing power for SK Hynix, Micron and other suppliers. But supply is catching up. The next stage of the memory trade depends on whether AI demand and rising memory content per accelerator can absorb additional capacity—not simply on shortages pushing prices higher.
Hyperscalers and custom chips: Nvidia’s outlook gives another vote of confidence to hyperscaler capex. But the more expensive Nvidia GPUs and memory become, the stronger the incentive for companies to develop custom silicon. This does not undermine Google TPUs, Amazon Trainium or the Broadcom and Marvell ASIC opportunity. Nvidia can remain dominant in frontier AI while custom processors take a larger share of specific inference workloads.
Networking, optics, power and cooling: Rubin, Spectrum-6 networking and increasingly large AI factories suggest the bottleneck is moving beyond GPUs into memory bandwidth, data movement, electricity, cooling and data-centre capacity. These remain attractive second-order areas of the infrastructure buildout.
AI clouds: The 25% sequential growth in Nvidia’s AI-cloud, industrial and enterprise segment supports selected providers such as CoreWeave and Nebius. But high leverage, customer concentration and dependence on external financing make this one of the riskier parts of the ecosystem.
Foundry and packaging: The Rubin ramp supports TSMC and advanced-packaging suppliers. Demand visibility remains strong, but capacity constraints, customer concentration and geopolitics cannot be ignored.

Overall, Nvidia’s results validate the AI infrastructure trade—but they are not a signal to indiscriminately chase everything labelled AI. Rising component costs, higher yields and the need to prove returns will increasingly separate companies with pricing power and visible demand from the rest.

Bottom line

Nvidia’s report removes one major near-term concern around demand. The AI infrastructure cycle is not yet rolling over, Rubin is entering production and supply remains the binding constraint.

It does not remove the valuation debate.

The next test is whether Nvidia can preserve enough of its extraordinary margins and restore stronger cash conversion as the business scales. Meanwhile, hyperscalers must show that rapidly rising AI expenditure can generate adequate returns—particularly when long-term yields offer investors an increasingly credible alternative.

For Nvidia and the wider AI ecosystem, the question is no longer whether growth exists. It is where the economics of that growth ultimately settle.

Topics: Equities Amazon Macro Theme Category - Equities Artificial Intelligence Artificial Intelligence Theme - Artificial intelligence NVIDIA Corporation Microsoft Alphabet Alphabet Inc. Amd Advanced Micro Devices

Grains hit two-year high as war, weather and logistics tighten supply

Wed, 26 Aug 2026 12:00:00 Z

Key Points:

The Bloomberg Grains Total Return Index has reached a fresh two year high, supported by broad gains across corn and wheat, with the risk shifting from logistics to future supply.
Black Sea disruption intensifies and Russian August grain exports may fall towards 2 million tonnes, sharply below the five-year average of around 5.7 million tonnes.
Ukraine faces a longer-term supply risk amid blocked Black Sea ports and congested Danube routes restricting exports, squeezing farmer cash flow and potentially affecting planting and next year's production.
Corn adds another source of strength with the Chicago corn futures rising 14% this month amid a deteriorating US crop outlook, while concerns over Brazilian yields and fertilizer availability add to supply uncertainty.

The Bloomberg Grains Total Return Index, tracked by several ETCs here through the WisdomTree Grains ETC, has risen to a fresh two-year high as a combination of weather-related supply concerns and escalating disruption to Black Sea exports continues to support prices. The index is up around 9.3% this month, with corn and wheat leading the advance, while the year-to-date gain has reached 20%. Note: Past performance is not a reliable indicator of future performance

Total returns across agriculture and grains - Source: Bloomberg & Saxo

The latest concern centres on the Black Sea, where disruption to exports from both Russia and Ukraine is proving more severe than initially anticipated. Russia, the world's largest wheat exporter, is seeing shipments constrained by attacks on port infrastructure and commercial vessels. According to a Bloomberg report, the country's grain exports are now expected to total around 2 million tons in August, a 20% reduction compared with a two-week-old projection from ProZerno, well below the five-year August average of 5.7 million tonnes.

The strain is even more pronounced in Ukraine, where Russian attacks have effectively blocked the deep-water Black Sea ports that normally handle around 90% of the country's agricultural exports. The disruption is increasingly becoming more than a near-term export problem. With crops struggling to leave farms and storage capacity filling up, producers face weaker domestic prices, tighter cash flow and reduced ability to finance inputs and planting for the next harvest. Ukraine has already warned that storage could fall 8–11 million tonnes short following the harvest if seaborne exports remain constrained.

Alternative export routes are providing only limited relief. Reuters reports that up to 70 vessels are currently waiting near Romania's Sulina Canal for access to Ukrainian Danube ports to load grain, amid shortages of pilots and priority being given to cargoes carrying fuel. Frequent air-raid alerts have also contributed to delays. Current transit capacity through the canal has reportedly fallen to just two or three vessels per day. According to the Agriculture Ministry, Ukraine exported only 539,000 tonnes of grain during August through the latest reporting period, compared with 1.73 million tonnes during the same period last year.

The key risk for global grain markets is therefore shifting from the immediate loss of exports towards the possibility of a more persistent supply shock. Russia and Ukraine together account for roughly 25% to 30% of total global wheat exports, meaning prolonged disruption could force major importers to source more expensive supplies from North America, Australia and Argentina. Chicago wheat prices have already risen sharply since early July as buyers increasingly price this risk.

Meanwhile, Chicago corn has extended its rally, supported by a deteriorating US crop outlook and concerns that earlier expectations for ample supply may prove too optimistic. Corn is up 14% this month and around 9% year to date, while CBOT wheat has gained more than 9% this month and 34% year to date. Weather and input-related concerns elsewhere, including Brazil where lower fertilizer supply, add another layer of uncertainty at a time when geopolitical disruption is already reducing the market's margin for error.

The WisdomTree Grains ETC is relatively evenly exposed across the major grain markets, with approximately 34.1% in corn, 32.7% in soybeans, 19.5% in CBOT wheat and 13.7% in Kansas City wheat. This composition helps explain its recent broad-based advance: unlike a wheat-only exposure, it is benefiting from both the Black Sea-driven rally in wheat and increasingly supportive fundamentals across corn and the wider grain complex.

For now, the combination of war, weather and increasingly constrained logistics continues to underpin the sector. The next test will be whether Black Sea export capacity begins to recover. If not, attention is likely to shift increasingly towards the knock-on impact on farmer economics, autumn and spring planting decisions and ultimately the size of next year's crops.

The Bloomberg Grains TR index, tracked here by the WisdomTree Grains ETC - Source: Bloomberg & Saxo

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Educational resources:
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Daily podcasts hosted by John J Hardy can be found here

More from the author
Ole S Hansen's articles on Saxo For market commentary and insights - not trading advice - follow me and join the conversation on Twitter and Substack

Topics: Commodities Agriculture Wheat Russian Federation Ukraine Corn Soybean

Waiting for what may or may not surprise from Nvidia and the J-Hole.

Wed, 26 Aug 2026 08:48:00 Z

Market wants big news, but will it get it?

Listen to the full episode now or follow the Saxo Market Call on your favourite podcast app.

Questions and comments, please!

Saxo Market Call

Saxo Bank

Topics: Podcast Highlighted articles Forex

From escalation to exit ramp: why oil's war premium is unwinding again

Wed, 26 Aug 2026 08:30:00 Z

Key Points:

Crude prices have fallen sharply as Iran-Oman talks, Pakistani mediation and other signals raise hopes that Washington and Tehran are searching for a way to de-escalate.
The price move is running well ahead of the physical recovery, with Hormuz vessel traffic still severely depressed and Gulf energy infrastructure remaining disrupted.
Diesel and gasoil cracks have fallen from extreme peaks but remain exceptionally elevated as Gulf refinery outages and Russian export restrictions continue to constrain supply.
The biggest downside risk is a meaningful reopening of Hormuz, while the upside risk is that markets have priced a diplomatic breakthrough that proves much harder to deliver.

Oil prices have fallen sharply this week as the market increasingly senses that both Washington and Tehran are looking for an exit ramp from a conflict that has inflicted a heavy economic cost on both sides. Brent crude trades near USD 86 per barrel, extending its three-day decline to around 8.7%, while WTI trades back below USD 80 after trading above USD 87 last week.

The change in sentiment has been swift. Only a week ago, markets were focused on renewed tension, severely restricted shipping through the Strait of Hormuz and Washington's promise of an "economic onslaught" against Iran. Today, the focus has shifted towards diplomacy, potential maritime corridors and signs that neither side currently appears eager to return to full-scale military confrontation.

The result is a rapid unwinding of part of the geopolitical risk premium embedded in crude prices. However, the physical energy market remains far from normal, suggesting that the market is trading the prospect of improving supply conditions well before those improvements have actually materialised.

Brent crude trades near USD 86, below the USD 93 average seen during six months of war and disruptions - Source: Saxo

Searching for an exit ramp

The most important development has been talks between Iran and Oman, with the two sides discussing an interim framework aimed at resuming shipping through the Strait of Hormuz, including the establishment of a temporary joint navigational corridor and a project to clear mines from the waterway.

Importantly, such an arrangement would not require Washington and Tehran to immediately resolve the much larger disagreements surrounding sanctions, Iran's nuclear programme and regional security. Instead, it could provide a practical first step towards reducing the economic damage while broader negotiations continue.

Other developments also point towards de-escalation. The US has reportedly started returning diplomatic personnel to several Middle Eastern posts that were evacuated or downsized following the outbreak of war. The phased return includes missions in countries such as Saudi Arabia, Iraq, Israel and Lebanon, with other Gulf posts also expected to increase staffing. While hardly proof that the conflict is over, the move suggests Washington currently assesses the risk of renewed large-scale military escalation to have diminished.

Meanwhile, Washington's much-anticipated expansion of sanctions against Iran has so far proved less aggressive than feared. The Treasury sanctioned close to 60 Iran-linked entities, individuals and vessels and widened the range of activities potentially exposed to secondary sanctions. However, it stopped short of immediately imposing significant penalties on other countries continuing to trade with Iran and, importantly, did not target major Chinese financial institutions suspected of facilitating Iranian oil trade.

China, Iran's largest oil customer, has responded defiantly, arguing that its relationship with Tehran should not be disrupted and warning that it will take measures to protect its interests. The US may yet escalate its economic campaign, but for now its measured approach reduces the immediate risk of a sanctions confrontation with Beijing that could further disrupt global energy flows.

After six months of conflict, the incentives for finding an exit are becoming increasingly clear. Iran desperately needs economic relief and improved access to its oil export markets. Washington, meanwhile, needs energy normalisation after months of elevated fuel prices, SPR releases and disruptions across the Gulf.

Crude is pricing diplomacy before physical recovery

The speed of this week's sell-off is particularly notable because there has been little evidence yet of a meaningful recovery in physical flows. Ship traffic through the Strait of Hormuz remains severely depressed. Preliminary Kpler data cited by Reuters showed just five commodity vessels crossing on August 25, compared with a ten-day average of around 15. Before the conflict, the Strait handled roughly one-fifth of globally traded oil and LNG.

In other words, crude prices are falling not because large volumes of disrupted oil have suddenly returned to the market, but because traders are assigning a greater probability to their return in the coming weeks.

The market has moved from pricing a high probability of prolonged disruption and renewed escalation towards pricing partial reopening, negotiated shipping arrangements and a lower risk of renewed military confrontation.

This also leaves the market vulnerable in both directions. A credible agreement that rapidly restores Hormuz traffic could remove another layer of geopolitical premium. Conversely, a breakdown in negotiations could force traders to rebuild risk premium almost as quickly as it has disappeared.

Product stress eases but remains extreme

The same improvement in sentiment is visible in refined products, although here the physical tightness remains much clearer. The WTI-ULSD spread has retreated to around USD 88 per barrel after recently trading above USD 100, while the Brent-gasoil spread has dropped back below USD 70 from above USD 80 last week.

Those are substantial declines, but they should be viewed in context. Both remain at exceptionally elevated levels compared with normal conditions. This time last year, the WTI-ULSD spread traded just above USD 30, while the Brent-gasoil spread traded around USD 22 per barrel, highlighting that the refining system continues to face severe constraints even as the panic premium begins to ease.

Middle Eastern refinery outages remain an important factor, while developments in Russia are adding another layer of pressure, particularly across middle distillates. Repeated Ukrainian attacks have disrupted Russian refineries and export infrastructure, potentially restricting diesel exports through September as Moscow attempts to protect domestic supplies amid refinery outages.

Based on these observations, we can conclude that crude is increasingly trading diplomacy while diesel and gasoil are still trading scarcity.

Elevated fuel product prices relative to crude oil - Source: Bloomberg & Saxo

Peace dividend or premature optimism?

The sharp correction in crude reflects signs of an improving diplomatic backdrop, and after months of confrontation both sides increasingly have economic reasons to seek a way out.

The immediate downside risk for oil is clear: successful negotiations followed by a sustained reopening of Hormuz could release trapped Gulf barrels, ease shipping costs and further reduce the geopolitical premium. Back in June, when the Strait opened for a few weeks, Brent crude slumped all the way to USD 70 per barrel.

The opposite risk is equally important. The market may already be pricing the first stages of a peace dividend before any meaningful peace dividend has actually arrived. Looking again at the most recent developments, the failure to secure a deal following the June reopening drove renewed hostility and a subsequent USD 30 rebound in Brent.

Based on these recent developments, the only thing traders seem to be guaranteed is continued price volatility. It remains to be seen not whether tensions have eased — they clearly have — but how much de-escalation is already reflected in the price.

For now, the market appears willing to believe that Washington and Tehran have finally found sufficient reason to search for an exit ramp. The next test will be whether diplomacy can turn that expectation into ships actually moving through Hormuz again.

WTI crude trades near USD 80, more than 10% below the USD 88.5 average seen during the past six months - Source: Saxo

Managed money positions across key oil and fuel futures contracts - Source: CFTC, Bloomberg & Saxo

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25 Aug 2026: Gold pauses after powerful four-day rally 24 Aug 2026: COT on forex and commodities - Week to 18 August 2026 21 Aug 2026: Commodities Weekly Weather war and debt broaden the commodity rally 20 Aug 2026: When bond markets need support hard assets start to look harder 18 Aug 2026: Copper versus gold what an old macro signal is telling us now Educational resources: A short guide to trading crude oil The basics of trading wheat online A short guide to trading gold A short guide to trading copper A short guide to trading silver Gold, silver, and platinum: Are precious metals a safe haven investment? Daily podcasts hosted by John J Hardy can be found here

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25 Aug 2026: Gold pauses after powerful four-day rally
24 Aug 2026: COT on forex and commodities - Week to 18 August 2026
21 Aug 2026: Commodities Weekly Weather war and debt broaden the commodity rally
20 Aug 2026: When bond markets need support hard assets start to look harder
18 Aug 2026: Copper versus gold what an old macro signal is telling us now

Educational resources:
A short guide to trading crude oil
The basics of trading wheat online
A short guide to trading gold
A short guide to trading copper
A short guide to trading silver
Gold, silver, and platinum: Are precious metals a safe haven investment?

Daily podcasts hosted by John J Hardy can be found here

More from the author
Ole S Hansen's articles on Saxo Follow and interact with me on Twitter and Substack

Topics: Commodities Crude Oil Gasoline Energy (Sector) Iran USA

Anthropic IPO to pitch $30tn AI market to investors

Wed, 26 Aug 2026 08:29:00 Z

Note: This is marketing material. This article is not investment advice, capital is at risk.

If you thought the SpaceX IPO threw out some unbelievably big numbers, Anthropic could be about to go even larger.

Anthropic is set to pitch to investors in its upcoming initial public offering a total addressable market (TAM) exceeding $30 trillion. That would place it ahead of the $28.5 ‌trillion touted by SpaceX, according to a report from the Wall Street Journal. SpaceX dubbed this "the largest actionable" market in "human history”, but it seems Anthropic sees more.

Figures get thrown around a lot but roughly Anthropic is looking at raising up to $100bn to give it a $2tn valuation, beating SpaceX’s $1.77tn debut . SpaceX originally targeted $75 billion but ultimately raised $86.2 billion after bankers exercised the greenshoe overallotment option.

Anthropic is expected to publish prospectus documents shortly, potentially opening the door to a stock market debut in September or October.

The Claude developer more than doubled revenue to $11.6 billion in the second quarter, up 14x from the same quarter a year ago. What’s remarkable is that it became the first genuine frontier AI lab to report profitable quarter, showing investors that it can outrun its compute bill.

But its IPO valuation hinges on an expected $190 billion to $200 billion run rate by 2028. Its annualised revenue run rate hit $65 billion in late July, up from $9bn at the end of 2025. This annualised run rate could be in the region of $100bn by the end of the year.

And pushing as large a TAM as possible helps justify these numbers. The larger the TAM the stronger the case for heavy spend and the stronger the anchor for its growth story ahead of the IPO.

Benchmarking a valuation for Anthropic is tricky. There is no comparable US peer. SpaceX doesn’t just do AI – it launches and relaunches rockets and satellites, albeit the vast majority of SpaceX’s TAM is derived from AI.

Anthropic confidentially submitted its draft filing to go public to the US Securities and Exchange Commission (SEC) earlier this year. “This gives us the option to go public after the SEC completes its review,” Anthropic said on 1 June. “The proposed initial public offering will depend on market conditions and other factors.”

Anthropic was founded in 2021 by former OpenAI insiders. Whilst it initially it appeared to fall behind the ChatGPT maker, recent advances have seen it catch up and in some ways overtake. A push into coding has been pivotal as enterprise demand rather than consumer subscriptions drives growth. Claude Code, the assistant for software developers, has become one of its most popular products and highest revenue generators.

Although the company posted positive adjusted operating income in Q2, investors will be mindful about steep losses in the past and the path of compute costs vs revenue growth. In 2025 the company posted a net loss of $42bn as compute costs soared. As hyperscalers spend more than $725bn on the AI buildout, Anthropic seems to be a bit more modest, committing $50bn to data centre spending in the US this year. Anthropic’s more conservative approach to spending – committing to 10 gigawatts of compute vs OpenAI’s 30 gigawatts, means it’s achieved a faster path to profitability.

But it still hinges on growth, not cost control. CEO Dario Amodei has acknowledged that missing growth estimates for just a year could threaten the firm’s survival. Even a slip from 10x revenue growth to 5x could be catastrophic.

Political headwinds are a consideration with Anthropic clashing with the White House. The Trump administration terminated Anthropic contracts in March and called the company a supply chain risk after it refused to give the Pentagon unrestricted access to its AI models. The White House has also been irked by Amodei’s repeated warnings about the dangers of AI and calls to regulate the technology. Anthropic had to briefly pause its top models Fable 5 and Mythos 5 after the US commerce department slapped it with export controls in June. Pressure is coming from China, too, with the dissemination of cheaper AI models.

Although we can cite plenty of challenges, Anthropic is extending its lead in business AI adoption. According to Ramp, Anthropic rose to 43.5% of eligible businesses in July, widening its lead over OpenAI, which rose to 39.7%. However, we can quickly find problems here too. The analysts at Ramp warned that their latest data shows “businesses are hitting their limit on AI spend”. They note that adoption is slowing and therefore more of their growth will have to come from existing businesses already spending on AI, “particularly the advanced spenders, and those businesses are increasingly spending on open source”.

Neil Wilson

Investor Content Strategist

Saxo Bank

Topics: Equities United Kingdom Highlighted articles UKMustRead UK Generic Disclaimer FR US Actualites et Analyses Trump Version 2 - Investors Volatility investor TagFeed En hurtig tanke

Software’s next growth problem: more customers or more from each customer?

Wed, 26 Aug 2026 08:00:00 Z

Key takeaways

Intuit is accepting slower near-term growth to attract and retain more customers.
Zoom is trying to sell more products to customers already using its platform.
For investors, where growth comes from can matter as much as how fast revenue grows.

Growing a software company used to look almost suspiciously simple. Add customers, raise prices and sell more licences.

Intuit and Zoom Communications show why the next stage is harder.

Intuit, which owns TurboTax, QuickBooks, Credit Karma and Mailchimp, expects revenue growth to slow from 14% in fiscal 2026 to 9% to 10% in fiscal 2027. Management is deliberately prioritising customer growth, including through pricing and higher spending to attract customers.

Zoom is taking almost the opposite route. Its video-meeting business is mature, so it wants existing customers to buy more products.

For investors, the contrast offers a useful lesson. Revenue growth is only the final number. The interesting part is how a company creates it.

Intuit lowers the toll

Intuit has spent years benefiting from strong brands, recurring demand and pricing power. Now it is testing whether charging customers less today can create more value tomorrow.

Management says pricing has become an important reason some TurboTax customers leave. The company is responding by widening access and investing more in attracting customers.

That comes with a cost. TurboTax revenue is expected to grow just 2% to 3% in fiscal 2027, while Mailchimp revenue could be flat or fall slightly.

The key question is simple: is Intuit voluntarily lowering the toll to get more cars onto the bridge, or is competition forcing it to lower the toll?

The first can be smart investment. Lower prices can bring in customers who remain for years and later buy other services. The second is more concerning because it can signal weakening pricing power.

Investors therefore need to look beyond slower revenue growth. Customer growth, retention and future spending per customer will tell us whether the sacrifice is paying off.

Zoom builds more rooms

Zoom has a different problem. Finding another pandemic-sized wave of video-meeting users is unlikely to be a sensible business plan.

Instead, Zoom is expanding what existing business customers can buy. Beyond Meetings, it now offers products including Phone, Contact Center and artificial intelligence (AI) tools.

This is called cross-selling: selling an existing customer another product.

There are signs of progress. Second-quarter fiscal 2027 revenue grew 4.9%, while enterprise revenue rose 7.8%, its fastest growth in three years. Adoption of Zoom's AI virtual agent also more than tripled from a year earlier.

The equation is simple:

existing customer → more products → higher customer value → faster enterprise growth

Zoom does not necessarily need millions of new customers if each existing relationship becomes broader.

Four ways software can grow

Intuit and Zoom highlight a useful framework. Most mature software companies have four basic growth levers:

Add more customers.
Raise prices.
Sell more products to existing customers.
Increase how much customers use or spend on existing products.

These routes are not equally attractive.

Price increases can be highly profitable, but only while customers accept them. Customer acquisition can expand the market, but becomes expensive if new users quickly leave. Cross-selling can be powerful because the company already has the customer relationship, but only if the new products are genuinely useful.

The quality of growth therefore depends partly on what happens after the first sale.

What can go wrong

For Intuit, the warning sign would be lower prices without meaningfully better customer growth or retention. That would leave the company earning less without gaining enough scale.

For Zoom, watch whether newer products keep growing faster than Meetings. If they remain too small to lift overall growth, strong adoption headlines may have limited financial impact.

Competition matters for both. Software customers have more choices, while AI could make it easier for rivals to launch new products.

Investor playbook

Look behind revenue growth: separate customer growth, pricing and additional product sales.
Watch retention: attracting customers creates little value if they leave quickly.
Follow spending per customer: rising customer value can support growth even in mature markets.
Compare growth with margins: faster growth becomes less attractive if acquiring it gets increasingly expensive.

Not all growth is created equal

Software growth rarely disappears overnight. It usually changes shape.

Intuit is trying to widen the funnel by making its products easier to enter. Zoom is trying to make each customer relationship bigger. Both approaches can work, and both can fail. The harder question is which route creates lasting value.

Topics: Equities Highlighted articles UKMustRead

London Quick Take - 26 Aug - Straitened out? Bond yields and oil down on Hormuz hopes, PCE inflation and Nvidia earnings on tap

Wed, 26 Aug 2026 06:44:00 Z

Note: This is marketing material. This article is not investment advice, capital is at risk.

“The way I see it, if you want the rainbow, you gotta put up with the rain!” - Dolly Parton

The rain has been coming hard for months since the US first struck Iran. Stock investors have persisted in looking at the rainbow throughout. That's mainly down to AI and the vast capex involved in the buildout. Nvidia earnings today put the thesis to the test.

Oil prices tumbled on hopes Iran and Oman can do a deal to reopen the Strait of Hormuz in a durable, lasting fashion. De-escalation trades (short oil) were boosted by US sanctions on Iran announced Monday being way less than feared, as Washington stopped short of secondary sanctions, while Pakistan has talked up progress in talks. There seems to be emerging hope for a deal that leads to a permanent arrangement to administer the Strait. Even if the US and Iran remain at loggerheads, ensuring safe passage for tankers will keep oil down. Qatar said its mediation continues, while Russian agency RIA reported that the US and Iran are close to a ceasefire deal that would include ensuring freedom of navigation in the Strait of Hormuz. Geopolitical risk premia fades, allowing Brent to drop back below $87, testing a two-week low.

Macro relief: lower oil prices mean lower bond yields because of the inflation impact. A week since Treasury Secretary Scott Bessent intervened, long-end rates at about 15bps lower. The 30yr long bond is around 5.18% from last week’s 19-year high at 5.339%. The 10yr trades about 10bps lower around 4.65% from a high of 4.752%. Yesterday's suggestion that making buybacks at the long end using the $1tn Treasury General Account maybe eased some concerns about fiscal dominance and showed Treasury is doubling down on the buyback plan. The worry would be that Treasury suppresses yields at the long end by issuing more shorter-dated bonds and the Fed keeps front end yields down in a kind of Treasury-Fed pact that would diminish confidence in both institutions, the bond market and the US dollar. Lower yields may be a reflection of the move in oil more than confidence in Treasury.

Today’s big test for the bond market is the US core PCE index, the Fed’s (still) preferred gauge of inflation. Headline PCE inflation is forecast to decline slightly to +3.6% YoY, while core PCE is seen holding steady at +3.3%, rising +0.2% on the month. June's PCE reading, declining –0.11% on the month, was the first negative month on month print since 2020 – is this the start of a trend? I doubt it.

Lower bond yields and inflation risks halted the rally in gold, with spot retracing this morning to $4,625 after nearing $4,700 yesterday, looking perhaps to test the lows hit in yesterday’s pullback around $4,605. If this $4,600 holds we can see a bullish consolidation phase, but the reality is this hangs on the bond market and sentiment towards the US dollar, which is facing a range of challenges that the strength of its economy and Fed policy don’t betray. Bitcoin, which has also been rallying since the Treasury buyback announcement, pulled back below $79k after briefly hitting $81k.

Any PCE print with a 3-handle ought to keep the September FOMC meeting in play for a rate hike. Three dissenters called for a hike in July but minutes of that meeting revealed a more hawkish lean among policymakers. While CPI inflation leant softer, leading markets to trim rate hike bets, the PCE could swing things in the other direction. The bigger test for yields and the dollar, and gold and Bitcoin, is Friday’s Jackson Hole speech from Kevin Warsh, the Fed chair. I fail to see how he’ll be less reticent than previously. A 7yr auction tomorrow is also worth watching – a similar auction of UK 7yr gilts yesterday got off at the highest yield in years. Meanwhile the US and Canada are slapping tariffs on each other, which is inflationary and disruptive. Canada imposed 15%–50% tariffs on about $20 billion of US imports after trade talks collapsed, while the US plans 50% tariffs on Canadian autos, parts and steel from 1 January, 2027.

European markets were mixed despite the big macro relief from the drop in oil, with the FTSE 100 sliding because of it and the DAX a shade lower while the CAC in Paris rose +0.5%. A hawkish sounding European Central Bank perhaps weighs. The ECB's Isabel Schnabel said the central bank might need to characterise growth risks to the upside, such has been the resilience of the Eurozone economy in the teeth of the US-Iran war. Germany’s economy grew 0.3% in Q2 2026, revised up from 0.2% but down from 0.4% in Q1. Exports rose 2.0%, outpacing 1.5% import growth, while domestic demand edged up 0.1% after a 0.3% fall.

The FTSE 100 recorded its fifth straight day of gains and ticked up 0.3 per cent on Tuesday to 10,886, closing in on its record high. It looks like investors are content to scale the wall of worry despite no shortage of risks on the macro front – not least the ongoing stalemate between the US and Iran, escalating trade tensions, higher bond yields and a threat by China to retaliate against US plans to broaden its secondary sanctions regime against Tehran. Eventually the 11k barrier will break and trigger new momentum-based buying.

Nvidia earnings have the potential to move the market as the biggest AI bellwether in town. Raymond James increased its price target on Nvidia ahead of Wednesday evening’s earnings report to $352 from $330, implying almost 70% upside. This is the bit that will be of interest in the earnings update tonight – how far is CPU business is gaining traction? Shares of Nvidia snapped a losing streak to rally 2%, while AMD gained +5% as RJ upgraded the stock. Watch for third-quarter sales guidance, forecast +82.8% to $104.2bn, on adjusted gross margin near 75%.

Neil Wilson

Investor Content Strategist

Saxo Bank

Topics: Equities United Kingdom Highlighted articles UKMustRead UK Generic Disclaimer FR US Actualites et Analyses Trump Version 2 - Investors Volatility investor TagFeed En hurtig tanke

Market Quick Take - Nvidia results in focus as crude slides and Korean chipmakers lead Asia - 26 August 2026

Wed, 26 Aug 2026 05:45:00 Z

Market drivers and catalysts

Macro: Cheaper crude and hopes of a Gulf reopening set the tone before heavy data
Equities: US and European equities advanced as oil and yields eased, Asian stocks traded firmer but remained cautious ahead of Nvidia.
Digital Assets: Coins firmed and the listed miners rallied hard on record fund inflows
Commodities: LME copper hits fresh record high; oil falls on signs of a US-Iran offramp; gold consolidates
Fixed Income: Global bonds rally on steep sell-off in crude oil, punching yields lower
Currencies: Japanese yen finds modest support on lower bond yields. CAD lower on US trade spat, AUD jumps on AU CPI.

Macro

Oil fell as Iran and Oman are discussing a temporary joint maritime corridor in the Strait of Hormuz, with talks aimed at a permanent traffic and security framework. Pakistan’s army chief visited Tehran to support diplomacy, Qatar said its mediation continues, and new US measures on Iran were milder than expected, stopping short of secondary sanctions. Meanwhile, Russian agency RIA reported that the US and Iran are close to a ceasefire deal that would include ensuring freedom of navigation in the Strait of Hormuz.
Australia July CPI surprised to the upside, with the headline reading 3.5% YoY versus a drop to 3.3% expected and 3.8% in June, while the core readings got the most attention as the “trimmed mean” measure rose 0.5% MoM and 3.6% YoY versus 3.6% expected and 3.6% in June.
The US Conference Board Consumer Confidence survey data for August saw a bifurcation as the Present Situation index rebounded from a revised five-year low in July, while the Expectations index fell sharply to 68.2 from 74.0. It was the lowest reading since January. The overall index was almost steady at 89.4 versus 90.2 expected and 90.2 in July.
US July New Home Sales fell to a 607k annualized pace versus 620k expected, but the June data was revised up sharply to 678k from 628k originally reported.
The S&P CoreLogic Case-Shiller 20-City Index rose 2.1% year-over-year in June 2026, the fastest since June 2025 and above the 1.7% forecast, but real prices fell for the 13th month as 3.5% inflation outpaced gains. Chicago (6.9%), New York (4.8%) and Cleveland (4.1%) led increases, while Seattle (-2.0%), Las Vegas (-1.9%) and Denver (-1.2%) declined.
Germany’s economy grew 0.3% in Q2 2026, revised up from 0.2% but down from 0.4% in Q1. Exports rose 2.0%, outpacing 1.5% import growth, while domestic demand edged up 0.1% after a 0.3% fall. Investment stayed weak, with gross fixed capital formation down 0.2%, as machinery and equipment fell 1.4% and construction rose 0.1%. Year-on-year, GDP grew 1.0%, up from 0.7% in Q1.
Canada imposed 15%–50% tariffs on about USD 20 billion of US imports after trade talks collapsed, while the US plans 50% tariffs on Canadian autos, parts and steel from January 1, 2027. Markets cut Bank of Canada rate-hike expectations despite higher energy prices. In response, the Trump administration is said to be weighing additional trade penalties, including higher tariffs and other measures.
More in our Macro Analysis & Macroeconomic News

Macro calendar highlights (times in GMT)

1230 – US July Personal Income & Spending
1230 – US July PCE Price Index
1230 – US 2Q GDP, Personal Consumption & Price Index (second reading)
1700 – US Treasury to auction 5-year notes

The Jackson Hole symposium runs from 27 to 29 August, with Chair Kevin Warsh delivering his first keynote on Friday 28 August. The theme of the symposium is titled “Financial Innovation: Implications for Payments and Policy” – seen as likely to deliver thoughts on the potential use of stablecoins for financial system plumbing, but the market is more curious about the Fed’s interest-rate policy intentions.

Earnings events

Wednesday: Nvidia, Crowdstrike, Salesforce, Synopsys, Agilent Technologies, HP, Okta
Thursday: Marvell Technology, Autodesk, Workday, Rubrik, Pernod Ricard

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

Equities

USA: The S&P 500 rose 0.3%, the Dow gained 0.3% and the Nasdaq 100 advanced 0.6% as falling oil prices and Treasury yields revived demand for technology shares. Nvidia gained 2.2% ahead of earnings, while AMD jumped 4.9% after a Raymond James upgrade and Moderna surged 14.4% as analysts reassessed its cancer-vaccine opportunity. Dick’s Sporting Goods plunged 30.7% after cutting its annual outlook. After hours, Intuit fell 10.0% as its fiscal 2027 guidance missed expectations, with Nvidia earnings and US inflation data now taking centre stage.
Europe: The Stoxx 600 rose 0.4%, while the FTSE 100 gained 0.3% and Germany’s DAX advanced 0.6%, as softer-than-feared US sanctions on Iran and falling oil prices eased inflation concerns. Healthcare led gains, with Novo Nordisk rising 2.9% after JPMorgan lifted its price target, while Melrose Industries surged 10.4% after outlining a restart of production at its GKN Aerospace facility. Kering fell 3.3% as luxury stocks lagged, while Wolters Kluwer dropped 3.1% after Google launched a new artificial-intelligence tool for the legal industry. Nvidia and Jackson Hole remained the next key tests.
Asia: Asian equities traded firmer in today’s session as lower oil prices and the rebound in US chip stocks supported sentiment, although investors remained cautious ahead of Nvidia’s results. South Korea recovered from a weak open, with Samsung Electronics gaining around 1.0% and SK Hynix rising 1.2% as semiconductor shares stabilised, while Japan’s Advantest fell 1.7% as investors trimmed exposure ahead of the earnings event. Alibaba gained 1.4% in Hong Kong after reports that founder Jack Ma bought more than HK$600 million of shares following the company’s large AI-focused capital raise. Nvidia remained the main regional catalyst.
More in our Equity Trading - Stock Market Analysis & News

Digital Assets

The coins firmed and the listed miners rallied hard. CleanSpark gained 6.87%, Riot 6.50%, Cipher 6.18%, IREN 6.03% and Marathon 5.81%, while Coinbase rose 4.28% and Strategy 3.42%. Circle added 4.90%. Solana and XRP lagged the majors.
Bitcoin and ether funds drew USD 2.6 billion in the week to 21 August, their strongest week of 2026, with roughly USD 1.92 billion into the bitcoin products and USD 697 million into the ether ones.

Commodities

Copper extended its gains in Asia after a record close in London on Tuesday, rising 0.5% to USD 14,415.50/t on the LME. The rally continues to be supported by persistent tightness in near-term supply of the key transition metal, as large volumes are shipped to the US, draining stockpiles elsewhere at a time when mine supply is struggling to keep pace with growing demand. In New York, the High Grade copper contract trades near USD 6.75 per pound, just shy of the record USD 6.8665 reached earlier this month.
Oil: Crude trades lower for a third day after tumbling on Tuesday as Iran and Oman discussed an “interim framework” aimed at resuming shipping through the Strait of Hormuz, while the US “Economic D-Day” measures against Iran proved milder than expected. Together, these developments point towards a potential de-escalation, with both sides seemingly looking for an offramp from the conflict. Meanwhile, the API reported another build in US crude inventories, which, if confirmed by the EIA later today, would mark a fourth consecutive weekly increase.
Gold continues to consolidate following a four-day rally that lifted prices by more than 7%. A recovering dollar is providing a headwind, partly offset by lower oil prices feeding through to lower bond yields. Attention is now turning to today’s July PCE inflation data, traditionally the US Fed’s preferred inflation measure, followed by Fed Chair Kevin Warsh’s speech at the Jackson Hole symposium on Friday, with markets looking for further guidance on the Fed’s interest-rate outlook and how policymakers view the balance between inflation, growth and financial conditions.
More in our Commodity News, Analysis & Commentary

Fixed Income

Global yields were punched lower Tuesday as crude oil prices sold off steeply. The benchmark 2-year Treasury yield dropped back nearly six basis points Tuesday to below 4.18% before rebounding back above 4.18% in early trading Wednesday, while the benchmark 10-year shied further away from the recent range top of 4.75%, falling about six basis points from Monday’s 4.70% close to below 4.64% late Tuesday before buying pressure eased.
Bond markets will closely watch today’s July PCE inflation data, traditionally the US Fed’s preferred inflation measure and expected to show core inflation running at 0.2% MoM and 3.3% YoY, unchanged from June. The latter measure saw a peak since late 2023 at 3.42% YoY in May. Potentially more important for US Treasury yields will be any policy hints in Fed Chair Warsh’s speech at the Fed’s Jackson Hole, Wyoming symposium on Friday.

Currencies

The Japanese yen recovered modestly on the massive mark-down in crude oil prices, which helped drag global bond yields lower. USDJPY eased back from local highs near 159.50 late Tuesday to trade back toward 159.00 by early Wednesday in Europe after testing slightly below that level.
The US dollar action is neutral as the market holds its breath ahead of the Friday speech from Fed Chair Kevin Warsh at the Fed’s Jackson Hole symposium, which looks particularly pivotal after the US Treasury weighed in with policies and rhetorical signals recently clearly intended to cap long-term US Treasury yields.
CAD remains at the weaker side of the recent range on the risk of a widening US-Canada trade spat as the US side is said to be weighing further tariffs after Canada’s tit-for-tat response to the latest US tariffs imposed on a range of Canadian goods. USDCAD hovers near 1.3860.
The Australian dollar jumped on the hot CPI data (see above), which sent anticipation of further RBA tightening higher. AUDNZD rose sharply from around 1.1980 to above 1.2050 after the data, its highest in a week, as AUDUSD rose to new highs since late May near 0.7180.
More on currencies in our dedicated section: Forex Trading News & Analysis

Saxo Bank

Autumn Budget 2026: Banks may be softest targets as Burnham refuses to rule out tax rises

Tue, 25 Aug 2026 08:21:00 Z

Note: This is marketing material. This article is not investment advice, capital is at risk.

The UK unexpectedly posted a £1.8bn budget deficit in July, defying expectations for a balanced budget and underlining the country’s precarious fiscal position just as global bond yields have moved to multi-decade highs. The recent rise in gilt yields, which is raising debt servicing costs and eating away at the Treasury's fiscal headroom, underscores the pressures on the Chancellor, John Healey, to raise taxes in the October Budget. Pressure to raise taxes will be fourfold - one ideological, two to buy fiscal headroom as spending rises, three to ease cost-of-living pressures and four to appease bond markets.

This means it's likely that the Andy Burnham-led government, which seems to be more left-leaning than the Starmer/Reeves administration, will seek to raise taxes.

When asked during his visit to Ukraine this week whether he would raise taxes to cover spending gaps, Burnham refused to rule out tax hikes. He said: “I won’t be unrealistic and people really need to understand that ... We are in a challenging position, whatever I do will be carefully thought through, it will be funded and there will be no more to come as we go into the Autumn.”

Given Healey says he will stick to a manifesto pledge not to raise the big three taxes on working people (NI, income tax, VAT), the Treasury lacks the main levers to pull and will look around for the softest targets - ie those who are deemed the most palatable revenue-raisers from the point of view of the broad (Labour) electorate.

Banks appear to be a likely target.

Britain’s big four high street banks (Lloyds, HSBC, Barclays and NatWest) generated £200bn in profits in the last five years, which has left lenders exposed to attack and maybe more vulnerable to additional tax burdens than at any time since the 2008/09 period. Indeed, shares have jumped to the highest since the global financial crisis. Calls are growing to tax the sector more - the Green Party urged the Chancellor to impose a 38% windfall tax.

UK banks currently face one of the highest tax regimes among developed countries. In addition to paying the main corporation tax rate of 25%, UK banks pay an additional 3% surcharge

But this levy is down from 8% in the past – a return to this level is not out of the question, although today’s higher rate of corporation tax (up from 19% to 25% in 2023) means a rise to 5-6% is more likely. This would take the combined corporate tax burden to 31%. Any % increase in the surcharge would likely hit earnings per share by a similar or slightly greater level, lowering profits, return on equity and potential dividends or buybacks.

Already UK banks face a higher rate of tax than elsewhere. Lobby group UK Finance data shows UK banks were taxed 46.4% when employment taxes and VAT is taken into account, vs 38.9% rate in Frankfurt and 27.9% in New York.

There are strong countervailing arguments to raising bank taxes. One of these is hobbling UK's competitiveness vs the likes of Frankfurt and NY, which could further narrow the tax base by attracting labour and capital away from the City. The other major worry is that raising taxes on banks would hurt lending to businesses and consumers. However, given the fiscal position and ideology it looks like bank taxation is a relatively low-hanging fruit for the Burnham/Healey regime.

Stay tuned

The Budget rumour phase is just getting started – it's probably wise not to make financial decisions based on speculation about what might happen.

Stay tuned here for our ongoing Budget coverage, which we will update regularly and increasingly frequently as 28 October approaches.

Neil Wilson

Investor Content Strategist

Saxo Bank

Topics: Equities United Kingdom Highlighted articles UKMustRead UK Generic Disclaimer FR US Actualites et Analyses Trump Version 2 - Investors Volatility investor TagFeed En hurtig tanke ETF ETFs Categories

UK shares: Vistry leaps on affordable homes award, Melrose rallies on GKN site reopening timeline

Tue, 25 Aug 2026 07:57:00 Z

Note: This is marketing material. This article is not investment advice, capital is at risk.

Vistry gains on grant

Vistry jumped to the top of the FTSE 250, rallying as much as +18% on news the housebuilder has won a £350mn government grant to build 3,000 affordable homes.

Vistry is one of the largest UK housebuilders with a focus on social housing in particular though the move clearly anticipates a greater government focus on delivering on its pledge to build more homes. Other housebuilder shares such as Taylor Wimpey and Persimmon advanced +1.5% on the read across, with Barratt Redrow +1%.

The grant is the first allocation of funding made available as part of the government's £39bn Social and Affordable Homes Programme (SAHP), a ten-year scheme designed to create more affordable homes.

The grant is the biggest possible at this stage in the programme comes after shares were hit after the company said it would make a loss of £30mn in the first half as heavy discounting lowered average selling prices and weighed on margins. Vistry received total funding of £278mn from the 2021-26 affordable homes programme, which it used to build 3,500 homes.

It comes as PM Andy Burnham waters down his council house commitments, with ministers announcing today to spend an initial £10bn from the 10yr scheme on a mix of subsidised housing types, with about 40% now to go on types of homes like sheltered and shared ownership, Burnham having previously said it should all be on social housing. We await updates from the Budget in October but the government moves indicate a constructive environment for housebuilders, though the macro outlook, weak economy, poor jobs market, slack consumer confidence and higher bond yields remain headwinds for the sector.

Melrose boost

Melrose shares were also on the up after the company said its GKN Aerospace division would resume operations at the Garden Grove facility in California next month and that it’s set up a $100mn claims programme for residents affected by the evacuation in May. Melrose also said US authorities have dropped their criminal investiogation without bringing any charges.

Production at the site in Los Angeles was halted in May after an overheating tank sparked fears it could explode. Melrose says GKN has permanently decommissioned the tank involved in the incident and has made substantial investments in safety enhancements at the facility. GKN is targeting 28 September 2026 to resume full manufacturing operations with a phased return to full capacity and customer deliveries during the fourth quarter.

The update is clearly as positive catalyst for shares, with MRO stock +10% on news that removes a significant overhang for the stock.

Neil Wilson

Investor Content Strategist

Saxo Bank

Topics: Equities United Kingdom Highlighted articles UKMustRead UK Generic Disclaimer FR US Actualites et Analyses Trump Version 2 - Investors Volatility investor TagFeed En hurtig tanke

Gold pauses after powerful four-day rally

Tue, 25 Aug 2026 07:30:00 Z

Key Points

Gold pauses after a powerful four-day rally, having gained around USD 350 before reaching a fresh three-month high near USD 4,700.
Investor demand has recently returned, with ETF holdings rising by around 60 tonnes in August while hedge funds have lifted their COMEX net long to an 11-month high.
The latest rebound has been supported by technical momentum buying underpinned by renewed fiscal and debt concerns, geopolitical uncertainty, central-bank demand and the potential for renewed dollar weakness.
Consolidation would be healthy after the recent surge, with USD 4,770 the next major resistance area, while the 200-day moving average near USD 4,519 provides initial support.

Gold steadied after a four-day rally that lifted prices by around USD 350, with some consolidation emerging after the metal hit a fresh three-month high near USD 4,700 during the Asian session. Past performance is not a reliable indicator of future performance. The limited weakness seen so far today appears primarily driven by profit-taking following the sharp run higher, together with a continued recovery in the dollar. The Dollar Index has now recouped more than half of the losses suffered following last week’s US Treasury buyback announcement. The greenback received additional support after Treasury Secretary Bessent said the US would seek to cut Iran off from the global financial system, underscoring the dollar’s central role in global trade and finance while also reinforcing its traditional haven appeal.

Investor demand has strengthened noticeably. So far this month, total gold ETF holdings have risen by around 60 tonnes, putting August on track for the strongest monthly inflow since last September, while hedge funds have boosted their net long position in COMEX gold futures to an 11-month high, and as per the chart below the highest since January if we broaden the focus to include the "Other Reportables" category. Both developments highlight how renewed momentum, a technical breakout and heightened political, fiscal and financial concerns can quickly translate into stronger demand for bullion.

The drivers that have brought traders and investors back to gold have not gone away and we believe they are likely to remain supportive in the coming months. These include concerns about US fiscal sustainability and elevated debt levels, the prospect of renewed dollar weakness, central-bank demand and continued geopolitical uncertainty. In the near term, however, attention may shift towards consolidation, with bond-yield developments and signals from the upcoming Jackson Hole symposium likely to provide direction.

The Jackson Hole symposium runs from 27 to 29 August, with Chair Kevin Warsh delivering his first keynote on Friday 28 August. The theme of the symposium is titled “Financial Innovation: Implications for Payments and Policy” – seen as likely to deliver thoughts on the potential use of stablecoins for financial system plumbing, but the market is more curious about the Fed’s interest rate policy intentions.

After such a rapid advance, an orderly rally would arguably be healthier than another sharp acceleration. It allows investors and traders to build or reduce exposure without having to chase the market higher. Vertical moves tend to encourage hurried decision-making, while also increasing the risk of positioning becoming stretched and triggering a sharper correction when momentum eventually fades.

From a technical perspective, resistance is seen around USD 4,770, an area that combines the 50% retracement of the January-to-June correction with the May local highs. Initial support is at the 200-day moving average, currently around USD 4,519, followed by USD 4,410.

What could challenge the bullish narrative?

The renewed strength in gold does not come without risks. A sustained rebound in the dollar may remove an important source of support. Likewise, a more hawkish-than-expected message from Jackson Hole, reduced expectations for future Fed easing, or signs that US fiscal concerns are beginning to ease could trigger profit-taking after the recent sharp rally. Improving geopolitical conditions could also reduce haven demand, while increasingly stretched speculative positioning raises the risk that even a relatively modest change in the macro backdrop could produce a deeper correction. Technically, a failure to hold the breakout, particularly a move back below the 200-day moving average near USD 4,519, may weaken the current bullish momentum.

Gold investment demand through ETFs and futures - Source: Bloomberg & Saxo

Spot Gold with key technical levels - Source: Saxo

Spot gold 5-year chart - Source: Saxo

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24 Aug 2026: COT on forex and commodities - Week to 18 August 2026 21 Aug 2026: Commodities Weekly Weather war and debt broaden the commodity rally 20 Aug 2026: When bond markets need support hard assets start to look harder 18 Aug 2026: Copper versus gold what an old macro signal is telling us now 17 Aug 2026: Gold holds firm as rate hike risks fade despite elevated bond yields Educational resources: A short guide to trading crude oil The basics of trading wheat online A short guide to trading gold A short guide to trading copper A short guide to trading silver Gold, silver, and platinum: Are precious metals a safe haven investment? Daily podcasts hosted by John J Hardy can be found here

Related articles/content

24 Aug 2026: COT on forex and commodities - Week to 18 August 2026
21 Aug 2026: Commodities Weekly Weather war and debt broaden the commodity rally
20 Aug 2026: When bond markets need support hard assets start to look harder
18 Aug 2026: Copper versus gold what an old macro signal is telling us now
17 Aug 2026: Gold holds firm as rate hike risks fade despite elevated bond yields

Educational resources:
A short guide to trading crude oil
The basics of trading wheat online
A short guide to trading gold
A short guide to trading copper
A short guide to trading silver
Gold, silver, and platinum: Are precious metals a safe haven investment?

Daily podcasts hosted by John J Hardy can be found here

More from the author
Ole S Hansen's articles on Saxo Follow and interact with me on Twitter and Substack

Topics: Commodities USA Gold Silver Platinum Federal Reserve

London Quick Take - 25 Aug - Do deficits matter? Gold and crypto say yes they do

Tue, 25 Aug 2026 06:31:00 Z

Note: This is marketing material. This article is not investment advice, capital is at risk.

“Reagen proved deficits don’t matter.” - Dick Cheney

Do deficits matter? Andy Burnham thinks they do and has hinted raising taxes. This could be good for gilts, less good for the rest of us.

We're still talking Treasury Scott Bessent’s decision to intervene in bond markets, a move that is seemingly reviving what a few years back I dubbed the ‘4D trade’ – debt debasement & dollar devaluation. This has been very good for gold and crypto assets, and negative for the US dollar. Bitcoin topped $80k for the first time since May, up nearly 30% this month alone, with gains almost entirely made since Treasury’s buyback announcement. Note also positive regulatory moves and Senate to vote on Clarity Act in mid-Sep. Gold meanwhile has advanced to $4,700, hitting a fresh three-month high with the break above the 200-day moving average at $4,513 triggering fresh momentum buying, while a heavy call skew in the options market signals bullishness. More from Ole on this.

Although the powerful 4-day rally has taken a bit of a breather, with prices backing off resistance at $4,700 back to $4,616 this morning, the ability of gold to withstand higher yields, particularly higher real yields, means the metal is seen not just as the hedge against inflation but also that deficits ultimately do matter.

Worth just highlighting the backdrop and what we mean by 4D, some of which are pro-inflationary choices by policymakers, some just events, dear boy.

Unclear fiscal outlook across developed countries and rising deficits
US running super-loose pro-cyclical fiscal stance with 6% deficit with economy at full employment
AI capex debt boom competing for demand
Increased military spending
Shift from price-insensitive buyers (institutions) of bonds to price-sensitive (private)
Rising inflation expectations both in near-term (war, supply disruptions) and longer term...
,,,due to fiscal dominance fears – Fed stays loose to finance the ever-growing debt pile

We are into a new fiscal deficit and inflationary paradigm. I refer to a 2023 speech by ECB president Christine Lagarde that I locked into at the time. This I said was a “signal that we are about to go into a protracted economic (and maybe real) war that will require the mobilisation of the state and people – developed world central banks (Fed, ECB, BoE, BoC, RBA) will act together to orchestrate fiscal spending and suppress yields”. We may not be at this point of fiscal dominance yet but the market is saying it’s got concerns.

Yesterday reports surfaced that Treasury could use its near $1tn General Account to fund the increased purchases of government bonds announced last week. The general assumption was raising Treasury bond buybacks from $2bn per operation to $4bn would entail more front-end debt issuance, but this may not necessarily be the case. This news appeared to push down on yields at the longer end of the curve, perhaps as it may have told the market that the administration is not going to the path of outright financial repression via some kind of Treasury-Fed compact to control yields. If Treasury were to cap long-end rates by issuing more short-dated treasury bills, it would tie interest expense and the deficit to what the Fed does with the fed funds rate...moving closer to fiscal dominance.

Economic D-Day as it was termed floundered on the beaches somewhat – no new measures on Iran, just threats to other countries to sever economic ties. The dollar gained as there was speculation that it could entail some countries being excluded from the dollar system...oil fell with Brent back below $92 as it didn't do anything to make it worse in the Strait. European stock markets rebounded early Tuesday with some relief evident from the lack of any material increase in the economic pressure on Iran. Economic D-Day was not as bad as feared, allowing investors to re-enter some trades. Meanwhile reports today say Pakistan's mediatory visit to Iran was "fruitful".

Among the movers and shakers, Melrose rallied +9% to lead the FTSE 100 after saying its GKN Aerospace business will resume operations at its Garden Grove facility in California next month. A $100mn claims scheme has been set up to provide for nearby residents who had to evacuate in May due to a chemical incident, whilst investigators have dropped the criminal investigation. Vistry caught the eye on the FTSE 250, rising +17% to top the board after winning a £350mn government grant to build 3,000 affordable homes. Housebuilders look well placed to benefit from a shift in government policy under Burnham.

US stocks were mixed with tech weighing on the broader market while the Dow Jones climbed with utilities and financials higher. The S&P 500 slipped –0.3% while the Nasdaq 100 fell –1% with chipmakers down. Notably Nvidia declined –3% for its seventh consecutive losing session – its worst run since 2022 and comes ahead of Wednesday evening’s earnings report.

Neil Wilson

Investor Content Strategist

Saxo Bank

Topics: Equities United Kingdom Highlighted articles UKMustRead UK Generic Disclaimer FR US Actualites et Analyses Trump Version 2 - Investors Volatility investor TagFeed En hurtig tanke

Market Quick Take - Wider tariffs and another chip selloff as gold extends its run - 25 August 2026

Tue, 25 Aug 2026 05:50:00 Z

Market drivers and catalysts

Macro: Washington widens tariffs on Canada and China and sanctions a broad Iranian network
Equities: US stock-index futures gained as pressure on technology shares eased ahead of key earnings from Nvidia
Digital Assets: Coins and the large funds advanced while the listed miners went the other way
Commodities: Gold rally pauses after strong run with crude lower for a second day
Fixed Income: Yields fell right along the curve on cheaper oil and buyback speculation
Currencies: The dollar partly recovers from recent losses

Macro

Washington imposed 50% tariffs on Canadian goods after talks collapsed, prompting Ottawa to vow equal retaliation. President Trump also said tariffs on autos, auto parts and steel will rise to 50% from 1 January 2027. Separately, the US is reportedly planning a 7.5% tariff on Chinese goods over alleged excess capacity ahead of a Trump-Xi summit next month, a move that would lift the average second-term tariff rate on China back to around 20%.
The Treasury sanctioned close to 60 Iran-linked entities, individuals and vessels tied to nuclear, missile, cyber and oil networks, extending across digital assets, technology, gold, aviation and shipping, as well as a network of brokers and shadow-fleet vessels. Treasury Secretary Bessent indicated that a major financial institution, potentially in China, could be added to the sanctions list this week, raising the risk of secondary effects on trade and financial flows.
The one piece of US data was soft. The Chicago Fed National Activity Index fell to -0.08 in July from 0.06 in June, with three of its four broad categories deteriorating and personal consumption and housing turning sharply negative. The three-month moving average slipped to -0.04 from 0.01, pointing to a modest loss of economic momentum.
More in our Macro Analysis & Macroeconomic News

Macro calendar highlights (times in GMT)

0600 – Germany 2Q GDP
0800 – Germany August IFO Business Climate
1400 – US July New Home Sales
1400 – US August Consumer Confidence

Earnings events

Today: Intuit, Zoom Communications
Wednesday: Nvidia, Crowdstrike, Salesforce, Synopsys, Agilent Technologies, HP, Okta
Thursday: Marvell Technology, Autodesk, Workday, Rubrik, Pernod Ricard

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

Equities

US: Chipmakers led a mixed close. The S&P 500 slipped 0.28% to 7,652.86 and the Nasdaq 100 fell 0.97% to 29,023.18, while the Dow rose 0.26% to 53,422.35; the Russell 2000 lost 0.76% and the equal-weighted S&P added 0.10%, which in our view may point to a decline concentrated in the largest technology names rather than a broad one. Nvidia fell 2.91% to 208.48, a seventh consecutive losing session and its longest such run since 2022, with AMD down 3.49%, Broadcom 2.63% and the semiconductor tracker 2.43%. Seagate lost 6.5%, the largest single-stock decline in the index, and Tesla fell 3.83%. Meta rose 1.66%, Amazon 1.33% and Alphabet 0.94%. Financials led the sectors, up 1.29%, and utilities added 1.05%, while technology fell 1.78% and energy 0.83%. During the Asian session, US stock-index futures gained as pressure on technology shares eased, signaling tentative optimism ahead of key earnings tomorrow from Nvidia after the US close.
Europe: Monday closed mixed with a weaker bias. The Stoxx Europe 600 finished unchanged at 654.22, the Euro Stoxx 50 eased 0.22% to 6,447.99, the DAX slipped 0.11% to 26,106.60 and the CAC 40 lost 0.37% to 8,453.01, while the AEX rose 0.36% and the FTSE 100 added 0.06% to 10,861. Euro-area banks were the standout, up 0.72%, and precious-metals miners outperformed on bullion's advance. Canada's S&P/TSX closed 0.3% higher despite the tariff news, with gold producers offsetting industrials.
Asia: Chinese technology carried Monday's damage. Alibaba fell 8.5% in Hong Kong after placing 710 million new shares at HK$112.70 to raise HK$80 billion, about USD 10.2 billion, for artificial-intelligence chips, models and infrastructure, an 8.4% discount to the previous close; the MSCI China index lost 2.3% in US trading. This morning has been steadier than the open suggested: the Nikkei 225 is 0.39% higher at 65,782, the Kospi has pared a roughly 3% opening drop to 0.61% lower at 6,656, the Hang Seng is 0.25% lower and Australia's ASX 200 0.59% higher. SoftBank is separately planning a record JPY 1 trillion retail bond sale.
More in our Equity Trading - Stock Market Analysis & News

Digital Assets

Coins and the two large US spot funds advanced overnight while the listed miners went the other way. Strategy gained 2.83% and Bitmine 5.74%, but Coinbase fell 3.76%, IREN 4.94% and Cipher 2.57%. Solana added 2.61% and XRP 2.13%.
The Senate is scheduled to vote on the Digital Asset Market Clarity Act on 15 September, after the majority leader filed a cloture motion; the procedural step needs 60 votes and no floor vote took place before the summer recess.

Commodities

Oil: Crude trades lower for a second day as the US ramps up economic pressure on Iran and its trading partners in an effort to force the resumption of energy flows through the Strait of Hormuz. With no further military escalation and some tankers slipping through after buying heavily discounted oil to compensate for the elevated transit risk, the market remains in limbo. However, the drawn-out disruption continues to tighten the availability of crude and, not least, refined products, leaving the market vulnerable to renewed price spikes should flows deteriorate again.
Gold: Gold steadies following a four-day rally that lifted the price by around USD 350 before giving back roughly USD 78 after hitting a fresh three-month high near USD 4,700 during the Asian session. So far this month, investors have lifted total ETF holdings by around 60 tonnes, putting August on track for the strongest monthly inflow since last September, while hedge funds have boosted their net long in COMEX gold futures to an 11-month high. Both developments highlight how a combination of renewed momentum, a technical breakout and heightened political and financial concerns can rapidly translate into stronger demand for bullion.
More in our Commodity News, Analysis & Commentary

Fixed Income

Treasuries rallied along the curve on Monday, with the long end leading. The 10-year yield fell 3 basis points to 4.706% and the 30-year 4.1 basis points to 5.232%, a move that began with cheaper oil and gathered pace on a report that the Treasury General Account could be used to fund expanded buybacks. A little of that has come back this morning, the 10-year at 4.716% and the 30-year at 5.241%, with the two-year at 4.249%. The long-bond fund gained 0.62% and rate volatility barely moved, MOVE up 0.79% to 73.98.

Currencies

USD: The dollar held onto Monday’s gains, with the DXY having recovered more than half of the losses suffered following last week’s US Treasury buyback announcement. The greenback strengthened after Bessent said the US would seek to cut Iran off from the global financial system, underscoring the dollar’s central role in global trade and finance while also boosting its traditional haven appeal.
CAD: The Canadian dollar remains under pressure after US-Canada trade talks collapsed and Trump threatened to double auto tariffs, sending USDCAD back towards Monday’s high around 1.3860.
JPY: USDJPY rose to 159.40 as the yen weakened after Bessent refrained from providing further signals on US debt-management measures that could weigh on long-term yields. Meanwhile, a former BOJ board member flagged a September rate hike as likely, offering a potential source of yen support as the pair approaches the psychologically important 160 level.
More on currencies in our dedicated section: Forex Trading News & Analysis

Saxo Bank

SHEIN IPO: From $100 billion to $27 billion — what investors need to know

Tue, 25 Aug 2026 02:00:00 Z

Key points:

SHEIN is seeking to raise up to US$1.8 billion in Hong Kong, at a valuation of around US$26–27 billion — roughly 70% below its near-US$100 billion valuation in 2022.
The valuation reset reflects slower growth, higher tariffs, greater competition and regulatory risks, as well as the very different market environment compared with four years ago.
The contrast with hot technology IPOs is striking. Investors are still willing to pay high valuations for growth, but right now they see stronger growth and scalability in AI and technology than in fast fashion.
For investors considering the IPO, the important question is not whether SHEIN is cheaper than in 2022, but whether today's price adequately reflects its future growth and risks.

SHEIN is finally coming to market

After failed attempts to list in New York and London, Singapore-headquartered SHEIN is finally preparing to make its stock-market debut in Hong Kong.

The fast-fashion retailer is offering 280 million shares at HK$47.60–HK$49.50 each, seeking to raise as much as HK$13.9 billion, or around US$1.8 billion. Trading is expected to begin on 1 September.

At the top of the price range, SHEIN would be valued at around US$27 billion. That is a substantial business, but a long way from the US$98 billion valuation it reached in private markets in 2022.

So what happened?

Why is SHEIN worth so much less than four years ago?

Part of the answer is that 2022 was an unusually favourable time to value a fast-growing online business. The pandemic had accelerated e-commerce, money was cheap and investors were willing to pay heavily for growth.

Today's backdrop looks very different:

Growth has slowed. SHEIN was once seen as a hyper-growth disruptor. Revenue growth has since moderated sharply, particularly in the US.
Profits have weakened. Annual net profit fell to around US$2 billion in 2025 from US$3.4 billion in 2024, while SHEIN reported a US$99 million net loss in the first quarter of 2026.
Tariffs have changed the economics. SHEIN benefited from rules allowing low-value parcels to enter the US with limited duties. Those advantages have been reduced, meaning higher costs for the company.
Prices may have to rise. SHEIN has said it is considering increasing US prices to offset some of the tariff hit. That creates a difficult trade-off: protect margins, or protect the ultra-low prices that helped make the brand successful.
Competition has intensified. Temu is targeting many of the same value-conscious consumers, while Amazon, Zara and H&M remain powerful rivals.
Regulatory risks have grown. SHEIN faces scrutiny in the US and Europe around its supply chain, sustainability, online marketplace and business practices.
Geopolitics has become part of the valuation. Its attempts to list first in New York and later London were complicated by tensions and regulatory scrutiny from both Western governments and China.

So this is not simply the same company being offered at a 70% discount.

SHEIN today has slower growth, weaker profit momentum and a higher regulatory risk premium than the company investors valued four years ago.

Why is demand different from big tech IPOs?

The contrast with recent enthusiasm around technology, AI and robotics listings may seem surprising.

But investors are making a distinction between different types of growth:

Tech currently has the stronger structural-growth story. AI, cloud infrastructure and robotics are addressing markets investors expect to expand significantly over the coming years.
There is greater scarcity. Public markets offer relatively few ways to access some emerging AI businesses. Investors already have many choices across retail and e-commerce.
The use of capital can look different. Many technology IPOs are sold on the idea of financing the next stage of expansion. SHEIN already has roughly US$15 billion of cash and short-term investments, raising questions over how much it actually needs the IPO proceeds.
Some of SHEIN's IPO demand comes from familiar investors. Several cornerstone investors are already existing backers. That is supportive, but it should not necessarily be interpreted as entirely new institutional conviction.
Momentum favours tech. AI remains one of the market's dominant growth stories, while retail businesses face pressure from tariffs, weaker consumers and higher costs.

There is an important caveat: strong IPO demand does not automatically make technology IPOs better investments.

High expectations can create their own risks. The more investors pay for future growth, the more vulnerable a stock can become if that growth disappoints.

Is it worth investing in the SHEIN IPO?

There is no simple yes-or-no answer.

SHEIN still has clear strengths: enormous brand recognition, global scale and a highly responsive supply chain that helped redefine fast fashion.

But investors need to balance those advantages against a tougher environment.

The main questions are:

Can SHEIN return to stronger revenue growth?
Can it protect margins despite tariffs and higher compliance costs?
Will customers remain loyal if prices rise?
Can growth outside the US and Europe offset pressure in its largest markets?
Can SHEIN reduce the regulatory discount surrounding the business?

The lower valuation makes the entry point less demanding than it was four years ago, but it does not remove the risks.

How could SHEIN's shares perform after listing?

Near-term share-price performance is particularly difficult to predict.

There are some supportive factors: the valuation has already been cut substantially, the amount of stock available is relatively limited, and the deal has attracted large cornerstone investors.

That could help the initial trading performance.

But IPOs can be driven by supply and demand in their first few days, rather than by long-term fundamentals.

Over the following quarters, investors are likely to care much more about:

revenue growth;
margins and cash generation;
the impact of US tariffs;
pricing and consumer demand;
regulatory developments; and
whether SHEIN can build new growth engines, including third-party marketplaces and expansion outside its traditional US and European markets.

The bigger lesson for investors

SHEIN's journey from almost US$100 billion to around US$27 billion is a useful reminder that valuations are ultimately tied to expectations.

Four years ago, investors were pricing SHEIN as one of the world's fastest-growing consumer internet businesses.

Today, they are being asked to value a large global retailer facing slower growth, higher tariffs, greater competition and much more regulatory scrutiny.

That does not necessarily make SHEIN a bad investment. Nor does a 70% valuation decline automatically make it a bargain.

The US$100 billion valuation is now history. What matters for investors is whether SHEIN can turn its huge scale into durable growth and profits from here — and whether US$27 billion is the right price for that opportunity.