Saxo News & Research - Articles

Commodity weekly: Crowded trades unwind as energy risks intensify

Fri, 23 Oct 2026 11:00:00 Z

Key Points:

Positioning drives volatility: Crowded trades across bonds, equities and commodities are being unwound, amplifying price movements and, in some cases, overwhelming underlying fundamentals.
Energy remains the inflationary outlier: Escalating Middle East tensions support crude oil and refined products, while European and Asian gas prices rise amid concerns about winter supplies.
Metals face contrasting challenges: Gold and silver suffer technical selling despite lower bond yields, while copper remains vulnerable to US tariff uncertainty and the potential reversal of extraordinary inventory stockpiling.
Growth concerns meet supply risks: Iron ore weakness highlights China's struggling steel sector, while selling across grains and soft commodities reflects a combination of bearish fundamentals and elevated speculative positioning.

A week dominated by positioning and conflicting signals

Commodity markets have gone through another mixed and at times turbulent week amid a broader risk-off environment, with AI-led weakness across global equity markets, mounting concerns about French government debt and rising energy prices all weighing on investor sentiment. Together, these developments have heightened concerns about the outlook for growth and inflation, triggering sharp reversals across financial markets and exposing increasingly stretched speculative positions.

The Bloomberg Commodity Total Return Index is heading for a modest weekly decline but remains up more than 35% year-to-date. Energy has once again provided the main support, led by gasoil and Brent crude, while precious metals and grains have suffered the heaviest losses. Silver has fallen around 5.5%, wheat close to 5%, and gold more than 3%, while industrial metals and soft commodities have delivered mixed performances.

The common theme has been the unwinding of crowded positions. Previously oversold US Treasuries have rallied sharply, while selling was seen in several commodities such as copper and sugar that in recent weeks had attracted substantial speculative interest. This has produced some seemingly contradictory developments: bond yields have fallen despite renewed inflation concerns, gold has weakened despite safe-haven demand, and oil has rallied even as worries about economic growth intensify.

The correction does not necessarily signal a fundamental change in the longer-term commodity outlook. Instead, it highlights how positioning can temporarily dominate price discovery, particularly when investors become less willing to carry risk.

Commodities one week returns - Source: Bloomberg & Saxo Note: Past performance is not a reliable indicator of future performance

Energy: Supply risks intensify despite mounting growth concerns

Crude oil remains the clearest example of supply concerns outweighing a deteriorating demand outlook. Brent has climbed above USD 114 per barrel and is heading for its highest weekly close since June 2022 as attacks on Saudi Arabian infrastructure raise fears of wider Middle East supply disruptions.

Meanwhile, reports that the US and Israel have developed plans for potential renewed strikes against Iran following next month's US midterm elections have added another layer of geopolitical uncertainty. This risk is reinforced by reports that a third US aircraft carrier strike group is en route to the Middle East.

WTI is trading back above USD 100 but continues to lag Brent, leaving the international benchmark's premium above USD 13. The widening spread reflects the increasingly uneven impact of the Middle East conflict on regional crude availability, transportation costs and the value of barrels located outside the disrupted supply chains.

For now, crude exports from the region have proved relatively resilient, helped by alternative routes and logistical adjustments. However, the market is increasingly concerned that further attacks could damage production, processing or export infrastructure, creating disruptions that cannot easily be resolved by rerouting shipments.

Refined products remain particularly exposed, with diesel and gasoil continuing to trade above USD 200, supported by tight supplies amid a very slow recovery in shipments from the Persian Gulf, a major global refinery hub. European and Asian natural gas prices have also risen amid concerns about winter supplies, with benchmark European TTF futures gaining around 7% this week, reaching a four-year high at EUR 93.50 per MWh (≈ USD 30.5 per MMBtu), as relatively low storage levels leave the region increasingly dependent on continued imports through the approaching winter.

To put the supply challenge into perspective, European gas inventories currently stand at around 845 TWh, approximately 100 TWh below the level recorded at this time last year. That shortfall alone is equivalent to the energy carried by more than 80 large LNG carriers, highlighting the scale of additional imports required to rebuild the buffer ahead of winter. Relative to the five-year average, the shortfall increases to almost 140 LNG carriers.

In contrast, US natural gas has fallen sharply, heading into the weekend around USD 2.70 per MMBtu, amid mild weather demand and strong production, highlighting the distinctly different regional supply balances.

The broader concern is that another sustained rise in energy prices could reinforce inflation pressures just as economic activity shows signs of slowing. Such a development would complicate the outlook for monetary policy and increase the risk of stagflation, with energy remaining supported even as other commodities struggle.

Global gas prices and EU stockpiles - Source: Bloomberg & Saxo

Precious metals: Technical selling overwhelms traditional support

Gold's decline has been particularly notable because it has occurred alongside a powerful rally in US Treasuries. Normally, falling bond yields and increased demand for safe havens would provide support, but this week momentum-driven selling and long liquidation have overwhelmed those influences.

Spot gold briefly dipped below USD 4,000 during Friday's Asian session after Thursday's break below support around USD 4,060 accelerated technical selling. The metal is heading for its steepest weekly decline in several months and potentially its weakest weekly close since November, despite continued geopolitical uncertainty and growing concerns about the stability of the equity market rally.

Silver has suffered an even sharper setback, falling towards an 11-month low near USD 54. The gold-silver ratio has climbed above 74, also an 11-month high, reflecting silver's relative weakness amid broader risk reduction and concerns about industrial demand.

The latest price action suggests that short-term speculative selling is currently outweighing demand from longer-term investors, who have continued to accumulate gold through ETFs almost uninterrupted since July, seeking protection against fiscal instability, currency debasement and geopolitical risks.

Importantly, the correction does not necessarily invalidate gold's longer-term investment case. However, it demonstrates that even assets supported by structural demand can suffer substantial setbacks when speculative positions are reduced.

Attention now turns to whether gold can stabilise, with focus on an ascending trendline connecting the October 2025 and July 2026 lows, currently providing support near USD 3,985. Meanwhile, the broken USD 4,060 level may offer initial resistance ahead of key resistance around USD 4,230. A sustained recovery will likely require stabilising energy prices, continued demand from central banks and ETF investors, and, not least, evidence that the recent wave of long liquidation has run its course.

Spot Gold and investment flows - Source: Saxo | Note: Past performance is not a reliable indicator of future performance

Copper: Extraordinary US stockpiles put tariffs firmly in focus

Copper remains under pressure, with HG futures lower on the week after breaking below support around USD 6.52. Although concerns about the sustainability of AI-related investment have contributed to weaker sentiment, there is currently limited evidence of a material deterioration in the longer-term demand outlook from electrification, power grids and data centres.

A more immediate concern is the extraordinary geographical imbalance in copper inventories and uncertainty surrounding future US trade policy.

Inventories monitored by the three major futures exchanges have risen for a fourth consecutive week to approximately 1.05 million tonnes. A 19.6 kt decline in Shanghai, taking stocks near a two-and-a-half-year low, was more than offset by increases of 6.8 kt on COMEX and 47.5 kt at the LME, with most of the latter entering US warehouses.

Combined COMEX and US-based LME stocks have now reached 893 kt, representing approximately 85% of the global exchange-monitored total. This remarkable concentration reflects months of tariff-driven stockpiling, leaving inventories outside the US relatively tight despite the overall increase. Against this backdrop, traders will increasingly focus on Washington's pending decision on whether to impose tariffs on refined copper imports, potentially from January 2027.

A decision against tariffs could trigger an unwinding of the stockpiling trade if changes in regional spreads provide sufficient incentive to release US-held metal back into international markets. Such a development could weigh on prices, although the timing and scale of physical outflows would depend on regional price incentives, freight costs and warehouse logistics. Conversely, the introduction of tariffs could reinforce regional price distortions and encourage metal to remain within US borders, thereby keeping stockpiles tight elsewhere.

Iron ore: China's structural weakness becomes increasingly visible

While copper's immediate challenges centre on trade policy and inventory distortions, iron ore faces a more fundamental problem: weak Chinese demand combined with abundant global supply. Singapore-traded iron ore futures briefly slipped below USD 90 per tonne this week, reaching a two-year low and extending their year-to-date decline to approximately 15%.

China's prolonged property downturn continues to undermine steel consumption, while subdued construction activity is keeping steel mills under pressure. At the same time, ample seaborne supplies and the prospect of additional production are limiting the potential for a sustained recovery.

The contrast with copper is important. Copper's long-term demand outlook remains supported by electrification and infrastructure investment, while iron ore remains heavily dependent on China's traditional construction and property sectors. Without a meaningful improvement in Chinese steel demand or stronger production discipline, iron ore may struggle to recover.

SGX Iron Ore futures - Source: Bloomberg & Saxo

Agriculture: Crowded positions meet less supportive fundamentals

Grains and soft commodities provide further evidence of positioning-driven volatility. Wheat has fallen close to 5% this week on the prospect of de-escalation in the Russia-Ukraine war, while corn and sugar have also suffered substantial losses. The grain correction follows several weeks of speculative long liquidation, initially triggered by increasingly bearish supply estimates, including the latest USDA report pointing to higher US corn production and inventories.

Managed money had accumulated more than one million net long grain contracts last month, leaving the sector particularly exposed when bullish expectations began to fade.

Sugar has experienced a similar positioning challenge, with speculative net longs recently reaching a five-year high. Such elevated exposure can amplify downside movements when prices fail to respond to supportive narratives.

Looking ahead, weather developments, including the potential impact of a Super El Niño on global agricultural production, remain important. However, near-term price behaviour may continue to be dominated by the reduction of speculative exposure before fundamentals regain control.

Outlook: When does liquidation give way to fundamentals?

The coming weeks will test whether the recent correction primarily reflects the removal of excessive speculative positioning or the beginning of a more sustained deterioration in global demand.

The distinction matters. A positioning-driven selloff can create opportunities once liquidation subsides, particularly in markets where underlying supply remains constrained. A fundamentally driven downturn, by contrast, would require a more cautious assessment of demand prospects.

For now, energy remains supported by immediate supply risks, precious metals are searching for stability following technical breakdowns, and industrial commodities face sharply different challenges. Copper's outlook hinges increasingly on US tariff policy and inventory flows, while iron ore continues to reflect China's structural slowdown.

The central message is that the unwinding of crowded trades has weakened commodity prices across several sectors, but it has not removed the underlying supply risks. Whether those risks reassert themselves will depend on how quickly speculative selling subsides and whether global growth concerns deepen.

Related articles/content
22 Oct 2026: Commodities caught between AI jitters and escalating energy risks 19 Oct 2026: COT on forex and commodities - Week to 13 October 2026 16 Oct 2026: Commodity weekly: Gold steadies as oil tightness and growth fears divide markets 15 Oct 2026: Gold and silver: When falling yields stop helping stocks 14 Oct 2026: Recovering Middle East exports fail to ease crude and diesel tightness 12 Oct 2026: Diesel shortages Why the global economy has more to fear than rising petrol prices Daily podcasts hosted by John J Hardy can be found here

Related articles/content

22 Oct 2026: Commodities caught between AI jitters and escalating energy risks
19 Oct 2026: COT on forex and commodities - Week to 13 October 2026
16 Oct 2026: Commodity weekly: Gold steadies as oil tightness and growth fears divide markets
15 Oct 2026: Gold and silver: When falling yields stop helping stocks
14 Oct 2026: Recovering Middle East exports fail to ease crude and diesel tightness
12 Oct 2026: Diesel shortages Why the global economy has more to fear than rising petrol prices

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

Ole Hansen

Head of Commodity Strategy

Saxo Bank

Topics: Commodities Copper Mining Gold Silver Theme - Precious metals Energy (Sector) Soybean Natural Gas Gas Oil Gasoline

Satellites, sovereignty and stocks: who stands to gain from Europe's space ambitions?

Fri, 23 Oct 2026 09:00:00 Z

Key takeaways

Europe's satellite ambitions create opportunities for operators and manufacturers, but political support does not guarantee profits.
Eutelsat, SES and European telecom groups have different exposures, from owning satellites to selling connectivity.
US companies face potential restrictions, while European businesses must manage costs, competition and possible retaliation.

Europe wants greater control over the satellites connecting its citizens, businesses and armed forces. Washington is not particularly pleased.

In October 2026, the United States warned of potentially severe retaliation if Brussels proceeds with plans to reserve valuable satellite frequencies for European operators. Companies including SpaceX, which operates Starlink, could face restrictions.

The dispute comes as Europe increases investment in satellite communications, driven by defence needs, digital independence and growing demand for broadband.

For investors, this creates an interesting question: which companies stand to benefit from Europe's ambitions, which could lose ground, and who will ultimately pay the bill?

The answer extends far beyond Starlink.

The most valuable space may be invisible

The dispute centres on radio spectrum, the invisible frequencies that allow satellites to communicate with devices on Earth. Think of spectrum as lanes on a motorway. Companies need permission to use them, and access becomes more valuable as demand grows.

The European Commission proposes reserving two-thirds of a key frequency band for European operators and government services, leaving one-third open to international competition.

Current licences held by American companies Viasat and EchoStar expire in May 2027, making them directly exposed to the proposed changes.

Crucially, this is not a ban on Starlink's existing broadband network. The contested frequencies are particularly useful for connecting ordinary smartphones directly to satellites, without additional equipment.

SpaceX, through Starlink, and Amazon, through Amazon Leo, could face tighter competition for spectrum access. But European authorities also risk limiting innovation if restrictions favour local companies over better technology.

Three ways to benefit, three different risks

The most obvious European beneficiary is Eutelsat, the French operator behind OneWeb's network of more than 600 low Earth orbit satellites. Its satellite business is growing rapidly. Low Earth orbit revenue rose 69.5% to EUR 297 million in the financial year ending June 2026, reaching one-quarter of group revenue.

Yet overall revenue remained broadly flat. The lesson? A promising business can grow quickly without transforming the company's finances overnight.

Luxembourg-based SES offers another route through satellite services for governments, airlines and telecommunications companies.

Both participate in Europe's separate IRIS² programme, a planned secure communications network of 348 satellites, with launches starting in 2029.

But operating satellite networks is expensive. Growing demand must eventually justify the investment.

Airbus, Thales and Leonardo offer a different exposure. These aerospace and defence groups help manufacture satellites and their components, potentially earning revenue from government contracts without carrying the full costs of operating a network.

The distinction matters: building infrastructure can be profitable even when operating it proves difficult.

The unexpected players in the space race

On 19 October, Deutsche Telekom, Orange, Telefónica and Vodafone announced plans to explore a joint bid for European satellite spectrum. Their approach is interesting: rather than financing satellites themselves, they want to provide ground infrastructure and partner with an existing satellite operator.

That could expand coverage without requiring billions in satellite investment. However, the additional revenue may remain modest compared with their traditional telecom businesses.

The picture becomes even more interesting with AST SpaceMobile, an American company developing satellite-to-smartphone services. It already works with Vodafone and Orange, demonstrating that European operators can pursue greater independence while partnering with American technology providers.

This is not necessarily a contest with one winner. Different companies can benefit from different parts of the same network.

And there is a telling irony: Eutelsat's latest European-built satellites are preparing to launch aboard SpaceX rockets. Europe wants independence, but achieving it may still require American help.

When ambition meets reality

Three risks stand out.

First, Washington could turn its warnings into trade measures affecting European businesses beyond satellites.

Second, satellite networks require heavy investment. Delays, weak demand or rising costs could undermine returns, even with government support.

Third, Europe's competitors already have scale and technology advantages. Protected market access cannot guarantee competitive services or attractive profits.

An investor's radar

Watch regulation: the 2027 licensing process will clarify which companies gain or lose spectrum access.
Follow government contracts: new orders could benefit satellite operators and manufacturers differently.
Track cash flow: for Eutelsat and SES, revenue growth matters only if investment eventually produces sustainable returns.

The real prize is closer to Earth

Europe's satellite ambitions are about more than competing with Starlink. Reliable communications are becoming essential infrastructure, much like electricity or traditional defence equipment.

That creates opportunities, but strategic importance and attractive shareholder returns are not the same thing.

Eutelsat and SES must turn connectivity into profitable services. Airbus, Thales and Leonardo can benefit from building the infrastructure. Telecom operators offer another route, while American companies remain formidable competitors and partners.

For investors, the distinction between these business models matters more than the political headlines.

Europe may increasingly control what happens in its skies, but the real winners will be decided much closer to Earth: by contracts, costs and cash flow.

Ruben Dalfovo

Investment Strategist

Saxo Bank

Topics: Equities Highlighted articles UKMustRead Artificial Intelligence Theme - Artificial intelligence Tesla Motors Tesla Inc. Meta Platforms Inc. Quarterly earnings

Your platform already knows more than it shows you

Fri, 23 Oct 2026 08:24:00 Z

AI assistants now let traders who do not write code use the Saxo OpenAPI by asking plain questions. How the route works, where to stay careful, and a live build on 4 November.

AI assistants have made a broker’s data connection usable for anyone who can ask a clear question.

Every morning before the open, many active traders and investors go through the same routine. They open the platform, check how their positions moved overnight, look at what is getting close to a stop or a target, and decide what needs attention. It works, but it takes time and relies on you spotting everything yourself.

Most of that information is already available in a structured form. Saxo’s OpenAPI is the same kind of connection Saxo’s own platforms are built on, used to fetch prices, positions, orders and account data. What has changed recently is who can use it.

A third way in

Until recently there were two ways to use an API like this. You could read the documentation and work out the requests yourself, or you could become a developer and build software around it. Both took time and technical skill most investors would rather spend on markets.

AI assistants add a third route. You describe what you want in plain language, for example "which of my positions moved more than usual yesterday, and which are close to the levels I set?" The assistant then writes the code that asks the API for it. You read the result, check it against your platform, and change the question if it isn’t quite right. Going from an idea to a working tool can now take an afternoon rather than weeks.

The third route: you ask, the AI writes the code, the API supplies the data, and every decision stays with you.

Important note: The strategies and examples provided in this article are purely for educational purposes. They are intended to assist in shaping your thought process and should not be replicated or implemented without careful consideration. Every investor or trader must conduct their own due diligence and take into account their unique financial situation, risk tolerance, and investment objectives before making any decisions. Remember, investing in the stock market carries risk, and it’s crucial to make informed decisions.

What it looks like in practice

The useful applications are modest. One is a morning overview of your portfolio that flags what needs a decision. Another is a screen that uses your own criteria instead of a generic preset. The chart below is one example, built for options traders: it places each name by how expensive its options are compared with the past year and by its recent momentum, and each area of the grid is labelled with a type of strategy a trader might want to study further. Options carry a high risk of rapid loss and are not suitable for every investor. Costs and charges apply to each leg and vary by account and venue; check the applicable rates before entering any position. The same approach works for whatever you care about, whether that is valuation, momentum or dividends. These tools sit next to the platform and do the reading for you, so your attention goes to the decisions.

An example for options traders: IV rank against RSI. The tickers, their positions and the strategy labels are hypothetical and for education only, not advice or a trade recommendation. Selling options can lead to losses well beyond the premium received.

Where to stay careful

AI makes mistakes, and an API only accepts requests in exactly the right form. Assistants sometimes invent field names or misread what a value means, so check every tool against what your platform shows before you rely on it. A sensible way to start is to keep things read-only: the tool gathers and summarises, and placing orders stays with you. Saxo’s developer portal offers test access to a simulation environment, the right place to experiment before anything touches a live account.

See it built live

On 4 November at 13:00 CET I’ll host the webinar "Using AI and OpenAPI to elevate your Saxo platform experience". During the session I’ll build a small working tool on the Saxo OpenAPI from scratch, live, in about fifteen minutes, using plain-language instructions. You’ll see the whole process, including the parts that go wrong. Register for the webinar here .

More from the author
Koen Hoorelbeke's articles on Saxo Follow and interact with me on X (Twitter) for more intraday content

Koen Hoorelbeke

Investment and Options Strategist

Saxo Bank

Topics: Options Thought Starters Highlighted articles ESMA Products NOT Mentioned OpenAPI API

The FX Trader: Can the real JPY please stand up?

Fri, 23 Oct 2026 08:23:00 Z

The JPY is showing signs of stirring again.

The latest

A different kind of day for global markets yesterday
The oil price surge since the outbreak of the Middle East conflict earlier this year has generally been associated with rising global bond yields. The US dollar has loosely tracked that rise in global yields since March, and yields have risen more consistently than oil prices have over the last seven-plus months. But since the beginning of this month, the extension higher in oil prices has failed to drive global bond yields higher. Likewise, the US dollar switched into consolidation mode as yields rolled over, posting a brief peak on the hot US September CPI release last week before a sharp reversal that led to our call for a possible trend reversal. We need a bit more evidence that the US dollar is turning, but that remains our base case as long as we have a cap on US treasury yields. Technically, the USD move looks stretched short-term outside of USDJPY. For the next week to two weeks, the JPY is our chief focus for volatility potential far more than the US dollar.

Yesterday was especially interesting as US treasury yields saw their steepest plunge in months even as oil prices posted a new cycle high. Clearly the inflationary concerns from higher oil prices are being weighed against the risk that the supply-side shock of the higher energy input costs into the economy might trigger a recession. The focus yesterday for treasuries was clearly more on safe haven seeking as the US equity market suffered an ugly sell-off. Specific AI sector concerns may be far more important at the moment for equities than oil prices, but either way, the treasury market is the most important intermarket focus for the US dollar here. That being said, a US AI- and tech stock meltdown may be a US dollar risk if global investors who have poured into these stocks don’t rotate into US treasuries in further safe-haven seeking.

For the FX Trader, the most interesting developments have been in CHF and JPY, as the plunging yields yesterday sparked an extension of the CHF strength and saw the JPY finally responding more forcefully to what I have posited should be the most supportive combination: lower yields and weak global risk sentiment. The final ingredient that would add even more support for JPY would likely be lower oil prices.

Takeaway: The US dollar is caught here in the crossfire of its safe haven status (USD positive) versus factors that have been thrown into reverse that were formerly supporting the USD rally (higher treasury yields, which now have just fallen steeply). This could eventually lead to a weaker US dollar if yields continue to retreat, but the USD versus risky currency equation could be choppy going if risk sentiment remains weak. Elsewhere, the potential is far greater for something interesting to develop based on the shift in global bond sentiment in the JPY and perhaps in USDJPY – see chart below.

Chart focus: USDJPY
Even as one of the key trend indicators failed recently for the Ichimoku technical overview for USDJPY, the lagging span (green line) crossing back above the price bars, the other key resistance levels have held, including the 200-day moving average in the 158.50 area and the Ichimoku cloud top near the same area. The big bounce overnight is uncomfortable for bears here, but next week is the critical time frame, given the technical setup here (test of resistance, which survived, while downside potential has yet to prove itself) and the FOMC and BoJ meetings are incoming. To the downside, the cloud level becomes “easier” to break in coming days as its lower bound rises slightly, while the lagging span will dip back through the price bars even if USDJPY stays near current levels. To get some downside momentum going, a breakdown through the 155.25-155.00 area is a next step. And the direction in bond yields may have far more to say than chart dynamics here for whether the downside materializes at all.

Source: Saxo

Looking ahead
Next week we have no fewer than five central bank meetings: FOMC, BoC, ECB, BoJ and RBNZ. And for sterling we have the autumn budget statement on Wednesday after the brutal run lower in EURGBP – is that move getting overdone in the near term?

FOMC (Wednesday). The FOMC meeting is now seen very unlikely to bring a rate hike, while the market will desperately sift through the Warsh rhetoric and the statement for clues on the thinking for December, which is now only priced at 90% likely for a hike (+22.5 bps versus a high of +38 bps for the Oct & Dec meetings combined in late September). This meeting may rate low on market reaction potential.

Bank of Canada (Wednesday): The market is leaning heavily for a rate hike next week from Macklem and company after the Governor seemed to be guiding for one in comments over this last weekend: “The question we are going to be asking ourselves is, ‘Is inflation likely to come back down towards our target on its own, or are we going to have to raise interest rates to influence the path, nudge the path for inflation back towards the target?’” He also noted the risk of persistent inflation from higher oil prices. But with the CAD outperformance already in the price, not sure how much follow-on potential there might be now that the hike is mostly priced and another hike is fully in the price through the Jan 27 meeting.

ECB (Thursday): Some ECB members have been back-pedaling from former hawkishness as the vicious rise in energy prices – remember natural gas – have clouded the economic outlook. Some usual hawkish stuff from Germany’s Schnabel, but Olli Rehn has said no second round effects in evidence and President Lagarde has stated that higher yields are already doing some of the ECB’s tightening job. The key for the euro is the sovereign yield spread situation more than the ECB here. Market not pricing anything for this meeting and looking for a December hike instead, though now with less conviction – so there is some potential for surprisingly dovish (more likely?) or hawkish guidance to move the euro in either direction.

Bank of Japan (Friday): With the retreat in global bond yields and the rise in the JPY, we see the market marking the odds of a BoJ rate hike lower – that is logical. The market is not looking for a hike at next Friday’s meeting, where I suspect intermarket forces (the combination of where US Treasury yields, risk sentiment and oil prices are) will weigh far more heavily than BoJ guidance. That guidance in turn will have a lot to do with where the JPY is as well – so look for hawkish guidance if the JPY is back lower and less hawkish guidance if the JPY is pulling to new local highs. December is still priced at better than even odds for a hike.

RBNZ: The market leaning heavily in favour of a hike after the hawkish shift in September, but watch guidance. Clear line in the sand on AUDNZD just under 1.2300 now.

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.

Leading the G10 FX pack now we have the NOK, which has ground stronger versus the single currency all weak as oil and gas prices ratcheted higher – EURNOK hit lowest level since late 2022. The JPY has flashed a very strong 2-day momentum reading after yesterday’s action – let’s see if it can get a persistent move higher going for the first time in a long time. Elsewhere, the euro continues to suck wind on the sovereign debt yield issue. If French bonds can finally rally, this negative focus might ease for a bit – not sure what fresh information we’ll be getting in the nearest term – and lower yields elsewhere provide some relief at the margin.

Table: NEW FX Board Trend Scoreboard for individual pairs.
In the new trends department, we have GBPUSD attempting to register an uptrend, but it is precisely mid-range here of the entire 2026 range and if we are lurching into a risk-off environment, do we want to have sterling exposure. Big test for sterling next week is the autumn budget statement on the 28^th. Similar comments for USDCAD, which is hitting the key 1.4000 area and the market has already priced next week’s BoC hike. The GBPJPY “uptrend” looks a red herring after yesterday’s action and could be looking at a flip to negative within a day or two if we get follow-on JPY strength. Finally, the AUDNZD uptrend in focus here – with a move through the sub-1.2300 support needed to suggest a downside breakout is developing.

John J. Hardy

Global Head of Macro Strategy

Saxo Bank

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

London Quick Take - 5 Things to Know in Markets Today - 23 Oct

Fri, 23 Oct 2026 07:37:00 Z

5 Things to Know in Markets Today

1. AI selloff meets surging oil prices

AI selling and surging oil prices are putting risk under pressure, but Treasuries are providing an important release valve. US 10-year yields dropped a full 19bps yesterday as worries about the Eurozone favoured the US and a brutal selloff in AI names lowered issuance worries.

Rates down across the board and oil at $114 suggest the pressure in credit was less about front-loaded inflation worries and more structural concerns relating to fiscal and AI buildout spending. The US 10-year yield added a couple of bps this morning, while France's 10-year OAT yield is down 3bps to 5.05% having yesterday blown out completely.

Treasuries being bid on haven demand is easing pressure in rates, which is helping prevent what might otherwise be a tech selloff from turning into something much bigger, at least for now.

2. Oil hits $114 as Iran risks build

Oil hit a fresh five-month high as worries about the US-Iran situation continue to percolate. Heightened attacks on Saudi Arabia and reports that the US and Israel are ready to strike Iran again soon, potentially after the midterms, have pushed Brent crude to $114.

It looks like the escalation risk is increasingly tied to the lead-up to the US midterms and Israeli elections, with the market bidding up the prospect of a reignition of kinetic conflict. There is also some chatter around Israel's elections and the potential for Netanyahu to escalate the conflict and declare a national emergency should it look like his party will lose its majority.

European stock markets were down again on Friday, extending losses from the prior session, although selling has eased a bit. The DAX was off 0.3% after falling 1% on Thursday, while the FTSE 100 was down 0.3%. Amsterdam traded slightly higher, with Shell up 1.3% and ASML also gaining.

3. Tech wreck, but not yet a total derisking

US futures are looking a bit better after a bruising session for tech on Thursday. The Nasdaq Composite fell 2.6% and the Nasdaq-100 dropped 2.9% to test the August lows, while the Dow Jones ended the day flat near 53k. For now, this looks like a tech wreck rather than a total derisking and deleveraging event.

It was the worst day for the tech-heavy Nasdaq since June, while the S&P 500 had its worst day since July, declining 1.2%. Meta dragged heavily, down 7%, perhaps as the introduction of new non-voting shares and the large amount of funding required to finance AI capex raised worries about dilution despite strong earnings.

Across semiconductors, selling was aggressive, with AMD down 8%, Micron 6% and Nvidia 4%. Neoclouds also took a beating, with CoreWeave down 10%. There is a lack of conviction in buying the dip as the AI financing narrative remains fragile. Nvidia boss Jensen Huang added some fuel to the fire by saying that while demand for neoclouds is "off the charts", capital is scarce and hurting growth.

4. Investors rotate towards staples

The split between the Dow and Nasdaq tells the story. While technology was hammered, the Dow finished broadly flat, with Home Depot up 4.3%, Procter & Gamble up 4.9% and McDonald's rising 2.6%.

Staples are telling the story as investors question the hyperscaler-AI capex narrative and look for places to put their cash to work where it won't get eroded by inflation and where demand remains reliable.

Asia showed similar volatility. The Kospi fell as much as 4% before ending up 0.3% for the day, as SK Hynix shares closed 4.4% higher after the chipmaker halted plans for a New York IPO of its US subsidiary Solidigm.

5. UK resilience points towards a BoE hike

Some more good news for the UK economy this morning, with business activity growth accelerating to its fastest pace since February, when all the talk was of rate cuts and before the Iran war.

It also showed payroll growth for the first time since hiring declined after the 2024 Budget. Since then, payrolled employees have declined materially, so this is a big win. The data confirms that the UK economy has been remarkably resilient and should seal the deal on a hike by the Bank of England, reversing my previous call.

At the same time, GfK's consumer confidence survey paints a much bleaker picture, with an 11-point drop between September and October, while separate data shows retail sales fell more than expected last month.

The job of the Monetary Policy Committee is never easy.

Neil Wilson

Investor Content Strategist

Saxo Bank

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Novartis results: buying lower or selling higher, when the big moves come from elsewhere

Fri, 23 Oct 2026 06:55:00 Z

Novartis reports its third-quarter results on 27 October 2026. Results days have been calm; its sharpest fall this year came from trial news. One investor wants to buy lower, another already owns the shares. How can each name a price and be paid to wait?

An option does not only pay for the results day. It pays for every day until it expires, and the news those days bring.

Novartis publishes its third-quarter 2026 results on Tuesday 27 October 2026, before the Swiss market opens (Source: Novartis investor relations, as of 22 October 2026). The shares closed at CHF 128.88 on 22 October 2026 (Source: Saxo). In July, the company kept its 2026 outlook: sales growing slightly, and core operating income, its main profit measure, slightly lower, as cheaper copies of its heart drug Entresto take US sales (Source: Novartis, second-quarter results, 21 July 2026).

Results days have been calm for Novartis. Over the last eight, the shares typically moved about 1.9% on the day, and never more than 4.2%. The sharpest fall in that period came on another day. On 8 September 2026, after its second late-stage trial failure in a week, the shares fell 10.9% (Source: Saxo price data; Novartis, 8 September 2026). Past performance is not indicative of future results.

Novartis, with the 120 and 138 strike prices and the 20 November 2026 expiry marked. Illustrative and educational, not predictive. Past performance is not indicative of future results. Source: SaxoTrader, indicative prices, as of 23 October 2026.

Novartis share price move from the previous close to the close on results day, last eight results, and the 8 September 2026 trial-result day for comparison, against the range priced by the 20 November 2026 options (indicative Saxo quotes after the market close, as of 22 October 2026, 22:30 CEST). Those options run more than three weeks after the report, so the band is not a one-day estimate. Past performance is not indicative of future results; figures are illustrative and not predictive. Source: Saxo price data, Saxo option quotes, author calculation.

What the options market expects

Option prices give a rough idea of how far the market thinks a share could move. Add the price of the call and the put with a strike closest to today’s share price. For 20 November, that points to a move of about 6.1% in either direction, or roughly CHF 121 to CHF 137 (at the 128 strike, call CHF 4.60 plus put CHF 3.20 makes about CHF 7.80, on a share price of CHF 128.88. Source: Saxo, indicative prices after the market close, as of 22 October 2026, 22:30 CEST).

That is about three times the typical results-day move. The reason is time. The first Novartis options to expire after the report run until 20 November, 24 days later. So the 6.1% covers the report and more than three weeks of other news. After September, investors know that other news can matter more than the report.

Option prices on Novartis are also high compared with their own past year (Source: Saxo, as of 22 October 2026). In our view, that may be the September falls still showing in the price. For a seller of options, a higher price means a larger payment for the same promise. It also means the market sees more risk.

What happens to the option price after the report

Part of an option’s price pays for uncertainty, including the report. Once the numbers are out, that payment usually shrinks, even if the shares hardly move. Traders call this IV crush. With Novartis, the report is one day in a 24-day option, so in our view the drop after 27 October may be modest. A seller should not count on a quick gain. Options carry a high risk of rapid loss and are not suitable for every investor.

Why the 20 November expiry

The examples use the monthly Novartis options on Eurex, the European options exchange, expiring Friday 20 November 2026. Each contract covers 100 shares and is priced in Swiss francs. Saxo lists no weekly Novartis options before that date, so 20 November is the first expiry after the report. December options pay more but add another month of risk.

For the investor who wants to buy Novartis lower: a cash-secured put at 120

The idea: Novartis is worth owning, but this investor would rather buy lower than today’s price. The seller of the put agrees to buy 100 shares at CHF 120 if Novartis is below that price on 20 November. In return, the seller receives a payment today, called the premium. "Cash-secured" means the money to buy the shares is set aside.

Hypothetical, for education only. Not advice or a trade recommendation.

Example structure (illustrative only - not a trade recommendation)

Sell 1 Novartis 20 November 2026 120 put at about CHF 0.93 per share (bid 0.76, ask 1.10), with Novartis at CHF 128.88
Net credit: about CHF 93, all from the one put (CHF 0.93 on 100 shares), against CHF 12,000 of cash set aside
Break-even at expiry: CHF 119.07, the strike less the premium, about 7.6% below the price at the time
Maximum profit: CHF 93 (hypothetical), if Novartis is at or above 120 at expiry
Maximum risk: CHF 11,907 (hypothetical), if Novartis fell to zero
(Source: Saxo, indicative prices after the market close, as of 22 October 2026, 22:30 CEST)

Why 120: it is the first listed strike below the range the market expects for the month. None of the last eight results days would have taken Novartis that low. The 8 September fall would have.

Risk: CHF 93 is the most the seller can earn. If Novartis ends below CHF 119.07, the seller loses money, as a shareholder would. Options carry a high risk of rapid loss and are not suitable for every investor. Costs and charges apply to each leg and vary by account and venue; check the applicable rates before entering any position.

The 120 put in the SaxoTrader trade ticket, with the platform’s risk graph, max risk, max profit and break-even. Hypothetical, for education only. Past performance is not indicative of future results; figures are illustrative and not predictive. Source: SaxoTrader, as of 23 October 2026.

For the investor who already holds Novartis: a covered call at 138

The idea: this investor owns Novartis and would be happy to sell at CHF 138, about 7% higher. The seller of the call agrees to sell 100 shares at CHF 138 if Novartis is above that price on 20 November, and receives a premium today. "Covered" means the seller already owns the shares.

Hypothetical, for education only. Not advice or a trade recommendation.

Example structure (illustrative only - not a trade recommendation)

Own 100 Novartis shares; Sell 1 Novartis 20 November 2026 138 call at about CHF 0.96 per share (bid 0.78, ask 1.14), with Novartis at CHF 128.88
Net credit: about CHF 96, all from the one call (CHF 0.96 on 100 shares), around 0.7% of the CHF 12,888 share value
Break-even at expiry: CHF 127.92, the share price less the premium
Maximum profit: about CHF 1,008 (hypothetical) on shares and call together, if Novartis is at or above 138 at expiry
Maximum risk: CHF 12,792 (hypothetical), the share value less the premium, if Novartis fell to zero
(Source: Saxo, indicative prices after the market close, as of 22 October 2026, 22:30 CEST)

Why 138: it sits just above the range the market expects for the month. No results day in the last eight came close to a 7% rise. That is what the investor gives up: a rare jump, in exchange for a small, certain payment.

Risk: the investor retains the full downside risk of holding the shares. The premium received provides a partial offset, but it does not protect against a significant decline in the stock price. A repeat of the 10.9% fall on 8 September would cost about CHF 1,400 on 100 shares at today’s price, against CHF 96 received. Options carry a high risk of rapid loss and are not suitable for every investor. Costs and charges apply to each leg and vary by account and venue; check the applicable rates before entering any position.

The 138 call in the SaxoTrader trade ticket. The ticket shows the call on its own, which is why it reports unlimited risk: that applies only to a call sold without the shares. Held against 100 Novartis shares, a rise above 138 is covered by the shares, and the remaining risk is a fall in the share price. Hypothetical, for education only. Past performance is not indicative of future results; figures are illustrative and not predictive. Source: SaxoTrader, as of 23 October 2026.

And if neither view fits

Both examples assume the investor wants to own Novartis. Another investor may think September was not the last bad news. In our view, the put may not suit that investor: CHF 93 is little comfort when buying a share that keeps falling. A holder with that view may prefer to sell some shares, or buy a put as protection, which costs money instead.

A holder who expects the shares to recover what they lost in September gives part of that rise away with the covered call. And doing nothing is always an option.

Before placing the trade, check:

The gap between the buying and selling price
How many contracts are open at that strike, a sign of how easy it is to trade
The report timing: 27 October 2026, before the Swiss market opens
Commission, charged per contract
Whether the cash is really set aside
An exit plan, decided before the report

Assignment risk note: Novartis options can be exercised on any day before expiry. So a seller may have to buy or sell the shares early if the share price passes the strike. Only the seller of an option faces this.

Final thoughts

The two examples are one idea seen from both sides. The put seller names a lower price to buy at, the call seller a higher price to sell at, and both are paid for the uncertainty of the coming weeks, not only the report.

That is the point Novartis makes clearly this year. Results days have been calm; the sharp move came from news on an ordinary day. In our view, selling an option on Novartis may suit only an investor comfortable owning the shares after a day like 8 September. Either position can be closed early if the view changes. Options carry a high risk of rapid loss and are not suitable for every investor.

The author does not hold positions in any of the instruments mentioned in this article. The Author is permitted to wait at least 24 hours from the time of the publication before they trade the instruments themselves.

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Koen Hoorelbeke

Investment and Options Strategist

Saxo Bank

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Market Quick Take - Chipmakers tumble and the ten-year drops below 5% - 23 October 2026

Fri, 23 Oct 2026 06:20:00 Z

Market drivers and catalysts

Macro: US Treasuries rally, US jobless claims fell and Japanese inflation picked up
Equities: US equities fell sharply as concerns over AI spending and rising oil prices weighed on technology stocks and global sentiment.
Volatility: Index gauges jumped right across the curve with the one-day measure rising by a third
Digital Assets: Tokens firmed overnight while the listed crypto shares and the miners were sold heavily
Commodities: Oil climbs on Middle East tensions as gold and copper extend losses
Fixed Income: Huge US treasury rally on risk sentiment shift.
Currencies: JPY, CHF and NOK advance, USD sideways

Macro

US Treasuries staged their strongest rally in more than two years as an AI-led equity selloff, French market turmoil and renewed Middle East tensions drove safe-haven demand. Short-term yields fell as much as 20 basis points, while the 10-year yield recorded its biggest daily decline since August 2024, dropping below 5% for the first time in a month. Growing doubts about the sustainability and returns of AI investment accelerated the rotation from equities into bonds.
US initial jobless claims fell by 6,000 to 194,000 in the week to 17 October, below expectations and the lowest since mid-July, which has been cited as evidence of labour market resilience. Continuing claims rose by 25,000 to 1.728 million in the week to 10 October.
Japan's annual inflation rose to 2.1% in September from 1.9%, the highest since December 2025, with core inflation excluding fresh food also at 2.1%, just above the Bank of Japan's 2% target. Monthly consumer prices were flat.
Australia's services PMI fell to 47.8 in October from 51.9, moving into contraction. New business growth slowed, with weaker demand, higher borrowing costs and inflation cited, while employment and both input and output prices rose.
Houthi attacks on Saudi oil infrastructure and the possibility of renewed US strikes on Iran have been cited as raising Middle East supply risk, although Persian Gulf crude exports remain near prewar levels. Ukraine has also intensified attacks on Russian refineries, against a reported US to Russia diesel supply arrangement.

More in our Macro Analysis & Macroeconomic News

Macro calendar highlights (times in GMT)

0600 – UK Sept Retail Sales
S&P Global Preliminary PMIs: France (0715), Germany (0730), Eurozone (0800), and the UK (0830)
0800 – ECB CPI Expectations
1345 – US Oct PMI (Preliminary)
1400 – University of Michigan Sentiment for October

Earnings events

Today: American Express, Eni S.p.A, SLB

Next week

Monday: Verizon, Welltower, Cadence Design Systems, Nucor
Tuesday: Visa, Coca Cola, HSBC, Novartis, Boeing, Seagate Technology, S&P Global, Corning, HCA Healthcare, Waste Management, Freeport McMoRan, Robinhood, UPS
Wednesday: Alphabet, Microsoft, SK Hynix, GE Vernova, KLA Corp, Amphenol, Airbus, T-Mobile US, ServiceNow, Advantest, UBS, Fortinet, Automatic Data Processing, FedEx
Thursday: Amazon.com, Eli Lilly, Samsung, Mastercard, Intel, Merck, Caterpillar, Shell, Linde, TotalEnergies, Gilead Sciences, SanDisk, Starbucks, Monster Beverage
Friday: ExxonMobil, AbbVie, Chevron, AstraZeneca, Tokyo Electron, Kioxia, BP, General Dynamics.

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

Equities

USA: The S&P 500 fell 1.2% on Thursday, the Nasdaq 100 dropped 2.9%, and the Dow was broadly unchanged as rising oil prices and renewed concerns over artificial intelligence investments weighed on technology stocks. The Philadelphia Semiconductor Index plunged 6.7%, while Meta fell 7.0% despite stronger-than-expected revenue, as investors questioned its $135–145 billion annual capital spending plans and decision to introduce non-voting shares to help finance its AI expansion. Tesla declined 3.1% despite cutting its 2026 spending plans, as investors assessed its profitability and future AI investments, with attention increasingly turning to whether massive technology spending can deliver sustainable returns.
Europe: The Stoxx Europe 600 fell 1% on Thursday, Germany's DAX lost 1.1%, and the UK's FTSE 100 slipped 0.3% as rising oil prices, French political uncertainty and mixed earnings weighed on sentiment. Banks led the decline, with Barclays down 2.3% after weaker-than-expected quarterly profit, while luxury group Hermès dropped almost 5% as sales disappointed. ASML lost 5% amid the global semiconductor selloff, but London Stock Exchange Group gained 7.7% after raising its revenue outlook, highlighting how company-specific news still created winners in difficult markets. Attention now turns to upcoming earnings for further clues about demand and profit margins.
Asia: Asian equities also retreated on Friday, with Japan's Nikkei 225 down 0.6%, while South Korea's Kospi rebounded sharply from an early decline of nearly 4% to trade broadly flat. SK Hynix surged 3.8%, reversing earlier losses despite broader concerns over AI spending and semiconductor demand. In Japan, defensive stocks such as Kao and Secom outperformed as investors sought more stable businesses. Meanwhile, Australia's Zip plunged after disclosing a fraud incident in its US operations Taiwan's market remained closed because of a typhoon, while investors looked ahead to further technology earnings for signs of resilience.

More in our Equity Trading - Stock Market Analysis & News

Volatility

Volatility rose broadly alongside the risk-off move. VIX rose 14.09% to 19.03, VIX9D 21.76% to 18.86 and VIX1D 33.39% to 15.18. VVIX added 14.16% to 107.94, SKEW 1.35%. MOVE jumped 11.36% to 106.85, with VXN up 17.61% and GVZ 13.06%.
The cash curve held contango from VIX1D to VIX1Y at 22.62, VIX3M at 20.12, though the front future at 19.410 sits above the second at 19.270. SPX options imply 55.45 points, or 0.723%, for today's expiry and 145.40 points, or 1.895%, into Friday 30 October, covering next week's Federal Reserve decision.
The futures curve carries a kink at the front: November trades near 19.4, above December near 19.2, as the 28 October FOMC, megacap earnings and the 3 November midterms all fall inside the November window. S&P 500 realised volatility runs near 16.6 on a 20-day basis, leaving implied volatility only about 2.4 points above realised. Brent near $112 keeps an energy risk in the mix.

More in our Options Trading - Stock Market Analysis & News

Digital Assets

BITCOIN ~81,871 +0.64% | ETHEREUM ~2,410 +0.95% | IBIT 46.06 -3.72% | ETHA 53.88 -4.52% | AS OF ~06:00 CET

Tokens edged higher overnight while the listed crypto complex was sold hard through the US session. Miners led the decline, CIFR off 8.87%, IREN 8.37% and RIOT 8.06%, with CleanSpark and MARA both near 7% lower. Strategy fell 5.00% and Coinbase 4.51%, while Circle lost 3.44%.
US spot bitcoin ETFs recorded net outflows of USD 635m on 22 October, the largest single source being BlackRock's IBIT at USD 254m. Ether ETFs have shed about USD 1.08bn across October, reported as their largest monthly outflow of 2026.

Commodities

Oil: Brent trades above USD 114 and is heading for a third consecutive weekly gain as intensifying attacks on Saudi Arabia raise the risk of wider Middle East supply disruptions. Iran-backed Houthi militants have claimed responsibility for recent attacks on the Saudi Red Sea port of Yanbu, as well as deadly strikes on an oil field and airport in the kingdom. Meanwhile, the New York Times reported this week that the US and Israel have developed plans for renewed strikes against Iran following the US midterm elections early next month. WTI trades firmer at USD 100.50, leaving the Brent premium near USD 13.60.
Precious metals: Spot gold dipped below USD 4,000 during the Asian session as momentum-driven and technical selling accelerated following Thursday's break below support around USD 4,060, triggering further long liquidation. For now, the inflationary impact of rising energy prices continues to outweigh support from safe-haven demand and the short-covering-driven rally in bonds. Silver has fallen to an 11-month low near USD 54, while the gold-silver ratio has climbed to an 11-month high above 74, highlighting silver's relative weakness.
Copper: HG copper trades near USD 6.46 per pound after breaking below support around USD 6.52 on Thursday and is heading for its third weekly decline in four weeks. The AI-led equity selloff has weighed on short-term risk appetite, partly reflecting concerns that a slowdown in data centre investment could weaken future copper demand. Additional uncertainty surrounds whether Washington will refrain from imposing tariffs on refined copper imports. Such a decision could potentially release some of the substantial copper inventories accumulated in the US back into the global market, easing to supply tightness elsewhere.
The BCOM Total Return Index is heading for a modest weekly loss but remains up more than 34% year-to-date. The energy sector is once again doing the heavy lifting, led by gasoil and Brent, while all other sectors are trading lower. Losses are led by precious metals, with silver down 5.5%, and grains, where wheat has slumped 5%. Meanwhile, performance across industrial metals and softs is mixed, with copper and sugar declining while most other commodities have gained, most notably nickel and coffee.

More in our Commodity News, Analysis & Commentary

Fixed Income

US Treasuries rallied strongly Thursday as risk sentiment in the equity market cratered. The benchmark US 2-year treasury yield dropped nearly 20 basis points at one point to 4.61% before rebounding to the 4.65% area by early Friday, while the benchmark 10-year yield trades early Friday some 16 basis points below its Wednesday close at 4.96%, the first daily close below 5.0% in a month.
Germany-France sovereign yield spreads widened again Thursday, with the 10-year spread ending the day at its widest daily close for the cycle since 2012, up over fifteen basis points to over 174 basis points. The benchmark French 10-year OAT sovereign bond yield rose to new 24-year highs, posting a 5.14% high intraday before rolling back below 5.08%. The Germany-Italy 10-year spread posted its highest daily close since early 2025, rising eight basis points to 124 basis points.
US High Yield bond yields failed to rally together with US treasuries, sending the Bloomberg measure we track of the spread between US high yield bonds and US treasuries sharply higher, up 11 basis points and to thie highest level since April 2025.

Currencies

The US dollar traded mostly sideways as its traditional safe haven role conflicted with recent drivers of its strength, like the higher oil prices that formerly helped to drive US treasury yields higher. EURUSD remains frozen in its tracks just above 1.1200, while AUDUSD dipped back closer to 0.7000, still trading just above that level early Friday.
The strongest currencies Thursday were NOK, CHF and JPY. NOK continued its persistent rally as EURNOK dipped below 10.50 Thursday for the first time since late 2022, while CHF and JPY jolted stronger on the combination of weak risk sentiment and lower global bond yields. EURCHF dropped below its 200-day moving average near 0.9240 that had supported the price action earlier this week, trading below 0.9200 at one point before finding support. USDJPY traded as low as 156.08 early Friday after a steep sell-off Thursday from above 158.00, though it bounced to the 156.90 area by early Friday, while EURJPY dipped as low as 175.20 before rebounding to 175.90.

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

Saxo Bank

Topics: Macro Advanced orders Europe Employment United States United Kingdom European Union (EU) XAUUSD USD EURUSD USDJPY Energy (Sector) Technology S P 500 index Quick Take Weekly Newsletter ESMA Products NOT Mentioned

The markdown was all in the wings - Options Brief - 22 October 2026

Thu, 22 Oct 2026 11:30:00 Z

Crash protection got ten points cheaper on Wednesday while the price of the next two sessions barely moved. Yesterday’s flow, where it had a readable side, was still buying downside.

The cheapest thing in the option market on Wednesday was protection against a crash.

MARKET REGIME: LOW VOL BULL | VIX 16.68 | TERM STRUCTURE: CONTANGO | SKEW: ELEVATED (150.36) | FRONT-MONTH VIX FUTURES: 18.700

Today in brief

The short version. Friday’s at-the-money price on the S&P 500 came off by close to what one fewer session alone would take, so in our view implied volatility at the money barely moved. What did move sat away from the money: CBOE SKEW down 10.04 points to 150.36, the tail-risk index down 11.50% and the bond gauge down 5.66% to 95.95.

Markets. The S&P 500 rose 0.58% to 7,757.17 on Wednesday and the Nasdaq 100 1.13% on results. After the close Meta gained 2.2% and Tesla slipped 3.3% despite beating on profit. Asia then reversed it: the Kospi fell more than 3%, the Nikkei around 2% and the Hang Seng 2.7%, with SK Hynix off nearly 6%. Brent sits above 111 after a drone strike on a Saudi oil field.

Volatility curve. The cash curve fell in the middle and held at both ends. VIX9D lost 4.79% to 15.49 and the thirty-day 3.64% to 16.68, while the one-day gauge rose 1.61% to 11.38 and the one-year was unchanged at 22.03. The VIX future series rolled on Wednesday, so the front is November at 18.700.

Single names. On an identical 187 US underlyings the median implied-volatility rank fell to 42.8 from 46.1, and on the common set of 337 euro-zone names to 45.9 from 49.0. The typical single name stepped back from its own year by about three points of rank, on both sides of the Atlantic.

Flow. Yesterday’s ten reports gave no readable direction, with the largest lines rolls and mid-market prints. Where a side was marked it was downside being bought, in financials, consumer staples and energy, which runs the other way from the markdown.

This week’s range. Three sessions in, the S&P 500 has used 82% of the 1.56% priced for the week and the bitcoin fund 96%, both upward, against energy at 4%.

Earnings and catalysts. Novartis is priced at 1.5x its own eight-report history into Tuesday and Apple at 0.4x into 29 October. Today brings US weekly jobless claims at 14:30 CET and ten sets of results, including Valero at the top of the US rank board.

What it adds up to. Today’s expiry prices 0.535% and Friday’s 0.768%, against 73.80 points quoted for that same Friday a session ago when decay alone would have left about 60.3. In our view the option market cut the price of protection it is not using and left the next two sessions alone.

That is the whole brief in one read. The sections below hold the detail behind each paragraph, with the charts, the full set of readings and the sources, for when you want to go deeper on one part.

Headline driver

The S&P 500 rose 0.58% to 7,757.17 on Wednesday and the Nasdaq 100 added 1.13%, as results rather than macro drove the session’s news. SpaceX jumped 7.8% after its first profit as a public company and Super Micro Computer 9.6% on stronger guidance. After the close Meta gained 2.2% on strong results, a larger artificial-intelligence investment plan and a proposed two-for-one split of its non-voting shares. Tesla slipped 3.3% despite beating on profit, its reduced capital-spending plans disappointing.

Asia then reversed the lot. By the European morning the Kospi was down more than 3%, the Nikkei 225 around 2% and the Hang Seng 2.7%, with Samsung Electronics off more than 4%, SK Hynix nearly 6%, SoftBank 5.6% and Tokyo Electron 5.9%. The question being asked is whether spending on artificial-intelligence infrastructure converts into profit. The Bank of Korea left rates at 3%.

Market snapshot

US (Wednesday 21 October close): S&P 500 7,757.17, up 0.58%. Nasdaq 100 29,822.52, up 1.13%. Dow Jones Industrial Average 52,861.30, up 0.69%. Technology led at 1.67% and semiconductors gained 1.89%, while communication services fell 1.11% and the equal-weighted S&P managed 0.34%.
Europe: the Stoxx 600 rose 0.92% to 644.50 and the Euro Stoxx 50 1.40%, with the DAX up 1.35% and the CAC 40 1.06%. Randstad gained 20.2% and EssilorLuxottica 15.5% on results, Carrefour fell 13.8%, and the French ten-year closed at 5.013%, its first close above 5% in more than twenty-four years, taking the German to French spread to its widest since 2012.
Asia (Thursday morning): the Hang Seng was down 2.87% at 22,971.93, its Tech index 4.64%, the Kospi 2.85% and the CSI 300 1.26%.
Commodities and rates: Brent traded at 110.52 and WTI at 98.52 at the 06:00 CET pull, up 1.56% and 1.41%, and Brent pushed above 111 later in the morning after a drone strike on a Saudi oil field. Gold eased 0.99% to 4,109.10 and silver 2.21% to 56.44. The US ten-year yield was 5.086%, the thirty-year 5.380% and the two-year 4.780%. Bitcoin slipped 2.02% to 82,905.
Market regime: low volatility bull, the VIX at 16.68, the cash curve in contango and SKEW elevated at 150.36.

All figures from the watchlist export taken at 06:00 CET on 22 October 2026. Past performance is not indicative of future results. Source: Saxo, Bloomberg, CBOE.

Volatility surface

The cash curve against the previous session, over each tenor’s 60-session range, with the one-session change across every measure on the board. Source: Saxo, Bloomberg, CBOE.

The two largest moves of the session were both measures of the tail. CBOE SKEW fell 10.04 points to 150.36 and the tail-risk index 11.50% to 15.33, with VVIX off 2.68%. The cash curve came down in the middle and held at the ends: VIX9D lost 4.79% to 15.49 and the thirty-day 3.64% to 16.68, while VIX1D rose 1.61% to 11.38 and the one-year held at 22.03, near the top of its sixty-session range.

Ratios. VIX1D/VIX reads 0.68 against 0.65, so the day is priced richer relative to the month than it was. VIX3M/VIX rose to 1.12 from 1.10 as the front fell away from the back. VXN/VIX held at 1.46, the Nasdaq gauge at 24.42.

VIX futures. The series rolled during Wednesday’s session, so the front is November at 18.700 and the second December at 18.830, a ratio of 0.995. Against the same November contract at 18.650 a session ago the front barely moved while spot fell 0.63, widening the premium to spot to 2.02 points from 1.34. That window carries the 28 October Federal Reserve decision.

Rates and correlation. The bond gauge fell 5.66% to 95.95 and gold volatility 2.15% to 21.36, while oil volatility rose 2.25% to 53.28, now 3.20 times the equity gauge against 3.01. Correlation and dispersion were near unchanged at 12.83 and 37.14.

Single-name volatility

On an identical 187 US option underlyings read this morning, the median implied-volatility rank fell to 42.8 from 46.1, and the share of names above rank 50 dropped to 36.9% from 42.2%. The share below rank 20 rose to 16.0% from 12.3%. On the common set of 337 euro-zone names, where the universe changed by one name between runs, the median fell to 45.9 from 49.0 and the share above 50 to 42.7% from 48.4%.

So the index measures above did not move alone. The typical single name also stepped back from its own year, on both sides of the Atlantic, by roughly the same three points of rank.

The US median rank is 42.8 while the median percentile is 58.3, which is not a contradiction. Rank measures where today sits between the year’s highest and lowest readings; percentile measures how many days of the year were lower. A single spike sets the high and pulls every rank down, so a name can sit below the midpoint of its range and above the midpoint of its days at once.

A handful of names sit the other way round, with rank well under percentile. The high-yield credit fund reads rank 24 against percentile 76, the seven-to-ten year Treasury fund 52 against 90 and the biotech fund 39 against 77. In our view those are the quietly expensive corners: far from this year’s extremes, yet above almost every day of it.

Source: Saxo.

Options flow sentiment

Based on end-of-day 21 October, yesterday’s positioning, not today’s price action.

Single-name flow gave no readable direction. Across the ten reports the largest lines are rolls, one order printed many times, and mid-market lines with no side, several carrying a conviction label of two or three out of five, and removing one block changes the headline call-versus-put split in both the energy and the semiconductor sets.
Sector and ETF flow leans the other way from the markdown. Where a side was marked, it was downside being bought rather than sold: long-dated puts stacked across the financials fund and the money-centre banks together, opening put buying in consumer staples spanning the Federal Reserve meeting, and ask-side put buying in energy. One caveat matters: the pipeline drops closing trades, so this set cannot show hedges being lifted even where they were.

Where the week's range sits

The range the option market priced for this week around Friday 16 October’s close, with the nearest listed strike at each bound. Three sessions have traded, so the marker sits on Wednesday’s close. Straddles are read from the Saxo chain at Friday’s close and centred on put-call parity. Illustrative only, not a trade recommendation. Past performance is not indicative of future results. Source: Saxo, Bloomberg, CBOE.

Three sessions in, the S&P 500 has used 82% of the 119.13 points, 1.56%, priced around Friday’s close, against three of five sessions gone, all of it upward.

The bitcoin fund has used 96%, closing at 47.84 against an upper bound of 47.91, so that band may be effectively finished with two sessions left. The Nasdaq 100 fund has used 84%, also upward, and gold 39% downward. Energy has used 4%, the quietest row in a week when Brent rose.

The volatility row uses the nearest listed expiry, 18 November, so it measures a month and is not comparable with the five above it.

Options carry a high risk of rapid loss and are not suitable for every investor. Costs and charges apply and vary by account and venue; check the rates applicable to you before entering any position.

Today's catalysts

08:45 CET France October confidence surveys.
13:00 CET Turkey central bank rate decision.
14:30 CET US weekly initial jobless claims, the only US data point of the session.
01:01 CET Friday UK October GfK consumer confidence, then Japan’s September national CPI at 01:30 and the October flash manufacturing and services PMIs at 02:30.
Earnings today: Procter and Gamble, Gilead Sciences, Union Pacific, Western Digital, Valero Energy, Blackstone, Newmont, Lockheed Martin, Spotify and Atlas Copco. Friday brings ExxonMobil, American Express, Eni and SLB.

Two of today’s names sit at the extremes of the volatility board. Valero carries the highest implied-volatility rank of the 187 US underlyings at 98.4, and Newmont reports into a gold price that eased on Wednesday.

Earnings scorecard

Option-implied expected move for each report day against the stock’s average move after its last eight reports, for the twenty-one names tracked this season. Arrows show whether an upcoming expected move rose or eased since the previous day. Past performance is not indicative of future results. Source: Saxo, Bloomberg, CBOE.

The spread between what is priced and what each name has actually done runs from 1.5x to 0.4x. Novartis is the richest, at 3.2% into next Tuesday against an eight-report average of 2.1%. Apple is the cheapest, at 1.0% into 29 October against an average of 2.5%, with Microsoft next at 4.5% against 7.0%.

Implied-volatility rank and the event premium answer different questions, and this week they disagree. Roche carries a rank of 79 and Nestle 72, both among the highest on the board, yet their expected moves are 1.6% and 3.8%. Novo Nordisk sits at rank 28 with a 5.7% expected move, above its own 5.0% average. Rank measures the year; the event premium measures one day.

Next up are Novartis on Tuesday, then UBS and Alphabet on Wednesday, Microsoft the same evening, and Apple and Amazon on Thursday.

Options carry a high risk of rapid loss and are not suitable for every investor. Costs and charges apply and vary by account and venue; check the rates applicable to you before entering any position.

What the market is pricing

Session implied range: SPX options price 41.50 points, 0.535%, for today’s expiry, a level comparison only against the 41.15 points quoted for yesterday’s, since the two are different contracts.
Event implied range: Friday’s expiry prices 59.60 points, 0.768%, and stops before the 28 October Federal Reserve decision. A session ago the same expiry was quoted at 73.80 points with three sessions left rather than two. The clock alone would have left about 60.3, so roughly 0.7 of a point came out beyond the decay.
Tail risk signal: SKEW at 150.36 after a 10.04 point fall, with the tail-risk index down 11.50% the same session. Both stay high in absolute terms, so in our view this is a tail that got cheaper rather than one that was abandoned.
Correlation read: implied correlation at 12.83 against dispersion at 37.14, both close to unchanged, so in our view the index is still priced as names that disagree rather than as one object.

The shape of Wednesday’s repricing is clean. Friday’s at-the-money price came off by close to what one fewer session alone would take, so in our view implied volatility at the money barely moved. What moved sat in the wings: ten points off the crash gauge, a tenth off the tail index, the bond gauge down 5.66%.

In our view that is a market cutting the price of protection it is not using while leaving the next two sessions alone. Yesterday’s flow, where a side could be read, was still buying downside.

Options carry a high risk of rapid loss and are not suitable for every investor. Costs and charges apply and vary by account and venue; check the rates applicable to you before entering any position. Past performance is not indicative of future results.

Related articles/content
Cancellation not calm - Options Brief - 21 October 2026 The front end drains the tails do not - Options Brief - 20 October 2026 Market Quick Take - Chip stocks sold off after key earnings - 22 October 2026 Market Quick Take - SpaceX and Tesla merger on the cards - 21 October 2026

More from the author
Koen Hoorelbeke's articles on Saxo Follow and interact with me on X (Twitter) for more intraday content

Koen Hoorelbeke

Investment and Options Strategist

Saxo Bank

Topics: Options Thought Starters Investing with options Highlighted articles Listed Options Income investor – Options What are your options Learn about options Options education Getting Started with Options En hurtig tanke ESMA Products NOT Mentioned

The price of the future: what Meta and Tesla's earnings reveal

Thu, 22 Oct 2026 09:00:00 Z

Key takeaways

Meta's advertising engine is funding its AI ambitions, but rising spending raises the bar for future returns.
Tesla's profits remain under pressure, as investors weigh today's car business against tomorrow's robots and autonomous driving.
The real question is not who spends more, but who can turn investment into lasting profits.

Some companies invest in the future. Others seem determined to build several futures at once.

Meta and Tesla delivered their third-quarter earnings on 21 October 2026, offering investors two fascinating examples of this ambition.

Meta, the company behind Facebook and Instagram, is using its profitable advertising business to finance an artificial intelligence empire. Tesla, best known for electric cars, increasingly wants to become a leader in autonomous driving, robotics and AI.

Both are spending heavily. But their financial foundations, and the evidence supporting their ambitions, look rather different.

Meta: the money machine meets the spending machine

Meta's advertising business remains remarkably strong.

Revenue jumped 26% to 64.6 billion USD, helped by more advertisements and higher prices. AI is already improving recommendations and helping advertisers reach potential customers more effectively.

That matters. Meta is not simply hoping AI will eventually generate revenue. Parts of its investment are already improving the business that pays the bills. But those bills are getting considerably larger.

Meta now expects capital expenditure, mainly spending on infrastructure such as data centres and chips, of 135 billion to 145 billion USD in 2026. Its quarterly free cash flow, the money remaining after investment spending, turned negative at 2.1 billion USD.

A large legal charge also distorted reported profits. Excluding a 9.9 billion USD settlement-related expense, operating profit reached approximately 22.9 billion USD, representing a healthy 35% margin.

Meanwhile, its new AI assistant, Muse, has attracted more than 10 million registered users. The challenge now is turning engagement into profitable revenue.

Meta's proposed new non-voting share class adds another consideration: the company could raise capital while preserving Mark Zuckerberg's control.

The investor lesson: a profitable core business can finance ambitious projects, but growing revenue does not automatically translate into growing cash for shareholders.

Tesla: the future looks exciting, the present less so

Tesla's numbers tell a different story.

Revenue remained broadly flat at 28 billion USD, while reported net profit dropped around 43% to 787 million USD. The company delivered approximately 487,000 vehicles, demonstrating resilient demand. Yet operating profit fell 56%, highlighting the pressure from investment costs and the challenges facing its automotive business.

There were encouraging signs. Gross margins improved and Tesla generated 1.5 billion USD in free cash flow, despite quarterly capital expenditure more than doubling to 4.7 billion USD.

Tesla also reduced its expected full-year investment spending from 25 billion to 20 billion USD. But the investment story increasingly extends beyond cars. Autonomous taxis, Optimus humanoid robots and AI software could eventually create new revenue streams with different economics from manufacturing vehicles.

Meanwhile, Elon Musk confirmed that Tesla and SpaceX are exploring a potential merger. That creates another strategic question: would combining the businesses unlock valuable opportunities or increase complexity?

The investor lesson: Tesla's valuation increasingly depends on businesses whose future profitability remains difficult to measure. Progress in technology matters, but commercial adoption matters more.

Different businesses, surprisingly similar risks

Meta faces the risk that AI infrastructure costs grow faster than the profits they generate. Advertising growth, operating margins and free cash flow are useful early warning signs.

Tesla faces weaker vehicle profitability, execution challenges in autonomous driving and uncertainty around future investment requirements. Investors can monitor vehicle margins, commercial robotaxi adoption and cash generation.

Both companies also face a familiar risk: expectations. Even excellent products can disappoint shareholders when valuations already assume exceptional future success.

Investor playbook: follow the money

Separate today's profits from tomorrow's promises. Understand which businesses generate cash and which still consume it.
Watch spending efficiency. Rising investment becomes more convincing when revenue, margins and cash flow improve.
Consider expectations. Strong companies can still deliver disappointing returns when investors pay too much for future growth.
Mind concentration. Several technology holdings may depend on the same assumptions about AI adoption and spending.

The future still needs to pay the bills

Meta and Tesla are pursuing different versions of the future, but their earnings reveal a common challenge.

Meta has a powerful advertising engine generating substantial profits while its AI ambitions consume increasingly large amounts of capital. Tesla has an established automotive business, but much of its investment appeal increasingly rests on technologies that have yet to demonstrate their full commercial potential.

Neither approach guarantees success or failure.

For investors, the distinction matters because innovation and shareholder returns are not always the same thing. The most important question is rarely whether a company's vision sounds exciting. Both certainly do. It is whether that vision eventually produces more cash than it costs to build. The future may capture imaginations. But only profits can reward investors.

Ruben Dalfovo

Investment Strategist

Saxo Bank

Topics: Equities Highlighted articles UKMustRead Artificial Intelligence Theme - Artificial intelligence Tesla Motors Tesla Inc. Meta Platforms Inc. Quarterly earnings

Commodities caught between AI jitters and escalating energy risks

Thu, 22 Oct 2026 08:30:00 Z

Key Points:

AI jitters weigh on copper: Technology sector weakness and US tariff uncertainty challenge copper's bullish outlook, despite resilient physical fundamentals.
Energy supply risks intensify: Middle East escalation drives oil to five-month highs, while European gas remains vulnerable to winter supply disruptions.
Gold's investor divide deepens: Speculative selling continues to outweigh persistent ETF demand, despite growing geopolitical and fiscal risks.
Commodities retain their portfolio appeal: Supply constraints, inflation risks and positive roll returns in backwardated markets support the case for tactical exposure.

Global commodity markets are becoming increasingly divided as investors confront weakening risk appetite, renewed geopolitical tensions and the unwinding of crowded speculative positions. While concerns about AI investment are weighing on copper and industrial metals, escalating Middle East tensions have lifted crude oil to a five-month high. Meanwhile, gold continues to struggle despite persistent ETF demand, while agriculture has suffered a sharp reversal driven by harvest pressure and speculative liquidation.

AI concerns challenge copper's bullish narrative

The Nasdaq's latest tumble of more than 500 points highlights growing concerns about the sustainability of the AI investment boom, with potential implications extending well beyond technology shares.

High grade copper, down 2.4% and breaking below recent support around USD 6.50 per pound, has been caught between two sources of uncertainty. First, investors are questioning whether the US will proceed with tariffs on refined copper, potentially undermining the tariff-driven stockpiling that has helped support prices. Second, concerns about a slowdown in AI and data centre investment are challenging an increasingly important source of expected future demand.

However, there is a distinction between weakening investor sentiment and deteriorating physical fundamentals. Copper continues to benefit from electrification, grid expansion and constrained mine supply, while much of the world's visible exchange inventory remains concentrated in the US. The current weakness may therefore reflect a deflation of previously elevated expectations rather than a fundamental drop in demand.

Oil defies broader risk aversion

While growth-sensitive commodities struggle, crude oil is moving in the opposite direction. Brent has reached a five-month high above USD 112 as escalating Middle East tensions and the threat of further US military action raise concerns about renewed supply disruptions.

Despite recovering shipments from the region, the global oil market remains vulnerable. Shipping attacks, elevated freight costs and the risk of damage to critical energy infrastructure continue to threaten supply chains, while tight refined-product markets, particularly diesel, amplify the potential consequences of another disruption.

European natural gas faces similar risks, with relatively low storage levels leaving the region more dependent on continued imports throughout winter. A prolonged cold spell, combined with renewed disruptions to LNG shipments, could trigger another sharp increase in prices from the current level around EUR 90 per MWh ≈ USD 29.50 per MMBtu.

This creates an uncomfortable backdrop for financial markets. Higher energy prices are increasingly a source of pressure on both equities and bonds, reflecting the risk that another inflationary shock could limit central banks' ability to ease monetary policy. After several years of above-target inflation, investors can no longer assume that weaker growth expectations will automatically translate into lower borrowing costs.

In that sense, energy remains an important portfolio hedge against geopolitical and inflation risks, even as elevated prices ultimately threaten economic activity and demand.

Gold caught between speculative selling and strategic demand

Gold's inability to capitalise on the latest bout of risk aversion remains a key focus. Despite softer Treasury yields, a slightly weaker dollar and mounting geopolitical uncertainty, bullion is, for the third time this month, struggling below USD 4,100.

The explanation lies partly in the contrasting behaviour of different investor groups. Short-term macro-focused traders remain sensitive to interest-rate expectations, currency movements and technical signals, while longer-term investors continue to accumulate gold through ETFs as protection against fiscal instability, geopolitical risks and currency debasement.

The latest surge in French government borrowing costs reinforces the latter argument. France's 10-year yield has risen above 5% for the first time in 24 years, while its spread over Germany has widened towards 170 basis points, highlighting growing concerns about fiscal sustainability.

For now, speculative selling continues to more than offset strategic demand, with positioning data highlighting the divergence between the two investor groups. Since 25 August, managed money accounts, including hedge funds and CTAs, have reduced their net long exposure by 4 million ounces, while bullion-backed ETF holdings monitored by Bloomberg have risen by 2.3 million ounces. The persistence of ETF inflows despite weaker prices suggests that the underlying investment case remains intact. Once the current wave of speculative liquidation subsides, longer-term buyers may regain greater influence over price direction.

Agriculture: Positioning pressure meets weather risks

Agricultural commodities, particularly grains, have suffered a sharp reversal over the past six weeks, with the Bloomberg Grains Index falling 14% and almost fully reversing August's explosive rally. Harvest pressure and improving supply expectations have triggered a substantial unwinding of speculative positions, with the combined managed money net long across six major grain and soybean futures contracts falling from a record above one million contracts to around 750,000 in the latest reporting week.

The correction illustrates how positioning can amplify fundamental developments, with falling prices encouraging further long liquidation and adding to downward pressure. However, despite the recent weakness, the longer-term supply outlook remains exposed to several risks.

The ongoing conflicts involving Iran and Russia–Ukraine, the potential emergence of a powerful Super El Niño and the possibility of renewed food export restrictions could all disrupt agricultural production and trade. While current supply conditions have weighed on prices, the combination of geopolitical uncertainty and weather-related threats, in our opinion, leaves room for renewed volatility and potential price recoveries.

Commodities retain their role as a portfolio hedge

The divergence across commodity markets highlights an increasingly complex investment environment. Growth concerns are weighing on industrial metals and agriculture, while geopolitical tensions continue to support energy prices and strategic demand underpins gold.

Importantly, commodities can offer protection against risks that traditional portfolios may struggle to absorb. Supply-driven energy inflation can hurt both equities and bonds, while geopolitical disruptions, extreme weather and trade restrictions create upside risks across several commodity sectors.

In our opinion, the case for tactical commodity exposure therefore remains relevant, although the outlook for individual sectors is increasingly fragmented and the potential benefits must be weighed against downside risks. We favour broad-based commodity exposure while maintaining a particular focus on markets where rising demand meets persistent supply constraints, potentially driving structural upward price pressure and attractive investment returns.

For futures-based commodity investments, total returns reflect not only changes in the underlying commodity price but also the roll return earned or lost when expiring contracts are replaced, together with interest earned on cash collateral. In markets trading in backwardation, where longer-dated futures are cheaper than nearby contracts, this rolling process can generate a positive return as futures prices converge towards spot prices, assuming the curve remains unchanged. Conversely, contango can create a negative roll return. Persistent supply tightness can therefore offer investors a potential double benefit: price appreciation and positive roll returns, even during periods when spot prices are broadly unchanged.

What could go wrong? Risks to the commodity outlook

The constructive case is not without significant risks. A deeper slowdown in global growth, potentially triggered by a broader correction in technology shares or reduced AI-related investment, could weaken demand for industrial metals and energy. Equally, a de-escalation of Middle East tensions, accompanied by sustained improvements in oil shipments and refined-product availability, could remove a substantial portion of the geopolitical risk premium currently supporting energy prices.

Gold could face renewed pressure if the dollar and real yields rise, or if persistent weakness forces further speculative liquidation, while agricultural prices may remain subdued if favourable harvests and ample supplies outweigh weather-related concerns.

Finally, futures-based commodity investments carry risks beyond spot price movements. Backwardation is not guaranteed to persist, and a shift towards contango could turn positive roll returns into a drag on performance. Commodities can also fall alongside equities during broad risk-off episodes, meaning their diversification benefits are neither constant nor guaranteed. These risks reinforce the importance of balancing tactical opportunities against the possibility of sharp price reversals.

Brent crude and fuel prices - Source: Bloomberg & Saxo Note: Past performance is not a reliable indicator of future performance

Copper remains in a strong uptrend despite breaking below USD 6.52/lb. - Source: Bloomberg & Saxo | Note: Past performance is not a reliable indicator of future performance

Spot Gold - Source: Saxo | Note: Past performance is not a reliable indicator of future performance

Implied roll yield across key commodity futures - Source: Bloomberg & Saxo

Related articles/content
19 Oct 2026: COT on forex and commodities - Week to 13 October 2026 16 Oct 2026: Commodity weekly: Gold steadies as oil tightness and growth fears divide markets 15 Oct 2026: Gold and silver: When falling yields stop helping stocks 14 Oct 2026: Recovering Middle East exports fail to ease crude and diesel tightness 12 Oct 2026: Diesel shortages Why the global economy has more to fear than rising petrol prices Daily podcasts hosted by John J Hardy can be found here

Related articles/content

19 Oct 2026: COT on forex and commodities - Week to 13 October 2026
16 Oct 2026: Commodity weekly: Gold steadies as oil tightness and growth fears divide markets
15 Oct 2026: Gold and silver: When falling yields stop helping stocks
14 Oct 2026: Recovering Middle East exports fail to ease crude and diesel tightness
12 Oct 2026: Diesel shortages Why the global economy has more to fear than rising petrol prices

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

Ole Hansen

Head of Commodity Strategy

Saxo Bank

Topics: Commodities Copper Mining Gold Silver Theme - Precious metals Energy (Sector) Soybean Natural Gas Gas Oil Gasoline

London Quick Take - 5 Things to Know in Markets Today - 22 Oct

Thu, 22 Oct 2026 06:55:00 Z

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

5 things to know in markets today

1.French bond yield blowout rattles markets

From the floor...never mind the Franco-German spread (170bps today!) the Gilts-to-OATs spread is now just 29bps having stood at 150bps just over a year ago. The move in the last few weeks from 100bps to where we are now has been precipitous. When this hits parity do we get to flip the 'moron premium' moniker across the channel? After a mild relief bounce yesterday stocks in Europe are under renewed selling pressure this morning as French bond yields rose to fresh 24-year highs, while US futures were down as the markets digested earnings from Meta and Tesla.

The CAC 40 is bearing the brunt of selling as the French OAT 10yr yield rose ~11bps to 5.11% for its highest since 2002, having broken 5% for the first time since July 2002 yesterday. Franco-German spreads have widened further to 170bps, its highest ever. No one wants to be picking up dimes in front of this steamroller until it starts to turn. As stated before, this French story is not going away and risks to OAT yields and spread remain skewed to the upside.

Yesterday European equities rallied, with the Stoxx 600 rising 0.9%. the DAX gaining 1.3%, the CAC 40 advancing 1.1% and the FTSE 100 edging up 0.2%. This morning the CAC is down –1.4%, the DAX off –1% and the FTSE 100 down –0.7%, with stocks related to the AI trade taking some of the most heat with ASML, Infineon both –3%.

2.FTSE winners and losers

On the FTSE 100, miners and banks are dragging the index down on a kind of stagflation trade with Brent at a 5-month around $112 and copper down another –2% to its lowest in over a month, prices –7% from the peak a month ago. Silver trades down –3.5% looking to retest the cycle lows and gold trades down –1.2%, testing key recent horizontal support from 7 October at $4.066. Gold breaking down at this level despite softer Treasury yields and a weaker dollar indicates a broad sell-all mentality with bid coming through for safety in US Treasuries and Swissy where the euro is breaking down at its 200-day moving average. GBPUSD trades firmer above 1.34 as Treasury yields declined on a haven-bid with risk sentiment turning sour.

This picture of weakness across metals is weighing on Anglo American, Antofagasta, Fresnillo, Rio Tinto, Glencore et al. NDX futs off by –1.7% and weakness in Asian tech overnight meant the likes of Scottish Mortgage and Polar Capital were towards the bottom of the FSTE 100 also. HSBC and Standard Chartered were weaker than UK-focused lenders but banks and financials are feeling some strain.

Risers were the oil stocks, defensives, and software (AI being soft is good for software plus some strong numbers from LSEG, which posted record Q3 performance with total income +8.8%, subscription growth +6.6%, and hikes to revenue, margin and cash flow guidance. Shares in LSEG rallied almost 4%. Rentokil was the leader of the pack though as it jumped +9% after its Q3 update ratted out some worries about the North American business that have been a drag on the stock and announced a £200mn share buyback after posting organic growth of +3.4%. Also what's helped were the soft numbers from US rival Rollins, where shares were down -8% after disappointing Q3 numbers.

3.Barclays profits raises Budget risk

Having opened down, shares in Barclays started to tick up as of send time as investors digested some pretty good results. The investment bank was a mixed report card – equities trading +47% to £1bn, while fixed income trading –19% to just over £1bn... follows the pattern of Wall Street. The weak performance in fixed income meant the 125 rise in profits across the bank to £2.3bn missed expectations, while revenue growth of +3% was also a little light. Nevertheless, bumper profits like these only make it easier for the Chancellor to raid banks in the Budget by raising the surcharge from 3%.

4.What goes up...US futures slide

SpaceX led the Nasdaq rally yesterday, rallying nearly 8% post-earnings to help send the Nasdaq-100 up more than 1% for the session. But NDX futures are down more than 500pts, or 1.7%, this morning as risk turns sour despite some positive numbers out of Meta as stocks across the Asian and now European semiconductor supply chain retreated. The Kospi dropped –3.5% with SK Hynix –5.5% and Samsung Electronics –4%, while the Hang Seng fell –3.3% with Alibaba down –6%. China's CSI 300 benchmark fell –1.84% to enter a bear market, down 20% from its June peak. In pre-market it's the highest beta AI getting hit - Lam Research, Bloom, IBM, Teradyne, Coherent, Marvell, Applied Materials, Intel...and Tesla.

5.Meta and Tesla earnings beat, but don't help the index

Meta posted a beat-and-raise quarter which ought to be supportive for the wider AI story but it's not looking that way. Revenues rose 26% on last year and the firm raised its current quarter guidance....this looked a solid quarter but a new class of share structure being rolled out raises concerns about dilution.

Tesla isn't a car company: Tesla also reported better-than-expected Q3 results with overall revenues rising despite a 3% in core automotive sales as the domestic market remains tough following the end of EV tax credits. Energy revenue fell also 16% but Tesla’s services and other revenue climbed 33% from a year ago to $4.61 billion with FSD subscriptions up 67% YoY. Spending on the Optimus humanoid robot and other AI efforts meant capital spending more than doubled from a year earlier to $3.73bn, so free cash flow was down -62% year over year to $1.53bn and net income fell -29% to $787 million from $1.11 billion a year ago. Shares are down about -5% in pre-market.

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 - Chip stocks sold off after key earnings - 22 October 2026

Thu, 22 Oct 2026 06:35:00 Z

Market drivers and catalysts

Macro: UK inflation came in hotter than forecast while a Saudi oil field was attacked
Equities: US and European equities rallied on strong earnings, while Asian markets retreated as concerns over artificial intelligence spending resurfaced.
Volatility: Most index gauges eased back while crude volatility pushed in the other direction
Digital Assets: Listed crypto shares rallied through the US session while the tokens slipped back overnight
Commodities: Brent tops USD 111 on renewed supply fears while gold struggles below USD 4,100
Fixed Income: France’s 10-year yield hits 24-year high above 5.0%
Currencies: USD slightly weaker, USDJPY pokes near two-weeks lows overnight.

Macro

UK annual inflation rose to 3.5% year-on-year in September 2026, the highest since October 2025 and above the 3.4% forecast, led by higher transport and motor fuel costs, with core CPI up to 2.8%.
A deadly drone attack on Saudi Aramco’s Shaybah field and Ukrainian strikes on Russian oil facilities have raised supply risks, but rising Middle East crude exports and Russia’s planned diesel shipment to the US may limit further oil price gains. The US ordered some staff to leave Gulf embassies amid rising tensions, while continued attacks in the Strait of Hormuz weighed on sentiment even as oil flows there exceeded pre-war levels
New Zealand’s annual inflation slowed to 3.7% in Q3 2026 from 4.1%, just below the 3.8% forecast but still above the RBNZ’s 1–3% target, with quarterly CPI easing to 0.7%.
The average US 30-year fixed mortgage rate fell 9 bps to 7.41% in the week to October 16, 2026, its first decline in 11 weeks as Treasury yields eased. Total mortgage applications slid 5.3%, with refis down 2% and purchase applications down 7.3%.

More in our Macro Analysis & Macroeconomic News

Macro calendar highlights (times in GMT)

0645 – France Oct. Confidence Surveys
1100 – Turkey Central Bank Rate Decision
1230 – US Weekly Initial Jobless Claims
2301 – UK Oct. GfK Consumer Confidence
2330 – Japan Sep. National CPI
0030 – Japan Oct. Flash Manufacturing and Services PMI

Earnings events

Today: Procter & Gamble, Gilead Sciences, Union Pacific, Western Digital, Valero Energy, Blackstone, Newmont, Lockheed Martin, Spotify, Atlas Copco
Friday: ExxonMobil, American Express, Eni S.p.A, SLB

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

Equities

USA: US equities gained on Wednesday as the S&P 500 rose 0.6% to 7,757.17, the Nasdaq 100 added 1.1% and the Dow climbed 0.7% on upbeat earnings. SpaceX jumped 7.8% after posting its first profit as a public company, while Super Micro Computer climbed 9.6% on stronger sales and margin guidance. After hours, Tesla slipped 3.3% despite beating profit estimates as reduced capital spending plans disappointed. Musk also confirmed that Tesla and SpaceX had formed independent committees to explore a potential merger, although no agreement had been reached. Meta gained 2.2% following strong results, increased AI investment plans and a proposed two-for-one stock split involving non-voting shares.
Europe: European equities rallied on Wednesday, with the Stoxx 600 rising 0.9% to 644.49, the DAX gaining 1.3%, the CAC 40 advancing 1.1% and the FTSE 100 edging up 0.2%, as strong earnings helped offset political uncertainty in France. Randstad surged 20.2% after quarterly growth exceeded expectations, while EssilorLuxottica jumped 15.5% on strong sales, lifting luxury shares. SAP gained 3.5% amid renewed technology optimism, but Carrefour plunged 13.8% after warning that unrest in France would hurt earnings. French government bond yields reaching 5% and higher UK inflation kept fiscal and interest-rate risks in focus, even as investors welcomed encouraging corporate results.
Asia: Asian equities reversed Wednesday's rebound during Thursday trading, with South Korea's Kospi down more than 3%, Japan's Nikkei 225 losing around 2% and Hong Kong's Hang Seng falling 2.7%, as concerns over the profitability of massive AI investments resurfaced. Technology shares led declines, with Samsung Electronics slipping more than 4%, while SK Hynix falling nearly 6% as investors questioned the sustainability of AI infrastructure spending. In Japan, SoftBank Group lost 5.6% and Tokyo Electron declined 5.9%, while rising oil prices added pressure across regional markets. South Korea's central bank kept rates unchanged at 3%, while attention now turns to further US earnings for evidence that AI investments can translate into sustainable profits.

More in our Equity Trading - Stock Market Analysis & News

Volatility

Crude firmed after the Saudi attack, yet index volatility eased. VIX fell 3.64% to 16.68 and VIX9D dropped 4.79% to 15.49, while VIX1D rose 1.61% to 11.38. VVIX slipped 2.68% to 94.55 and SKEW eased 6.26% to 150.36. Cross-asset gauges split, with MOVE down 5.66% to 95.95 and OVX up 2.25% to 53.28.
The cash curve holds contango from VIX1D through VIX1Y at 22.03, with VIX3M at 18.72. After the roll, the front VIX future prints 18.70. SPX options imply 41.50 points, or 0.535%, for today's expiry and 59.60 points, or 0.768%, into Friday's flash PMIs.

More in our Options Trading - Stock Market Analysis & News

Digital Assets

BITCOIN ~82,806 -1.43% | ETHEREUM ~2,441 -1.21% | IBIT 47.84 +2.42% | ETHA 56.43 +2.47% | AS OF ~06:00 CET

Listed crypto equities advanced through the US session even as the tokens eased overnight, with bitcoin retracing after peaking above 84,000. Strategy led at 7.54%, with Coinbase up 3.65%, Circle 4.47%, IREN 4.58% and Bitmine 5.00%. Miners were broadly firmer, MARA adding 4.14% and CleanSpark 3.80%.
On the regulatory front, the OCC finalised its GENIUS Act payment-stablecoin rule on 21 October, effective 18 January 2027. Swiss regulator FINMA has approved the country's first retail spot bitcoin ETF, and BlackRock has filed for a protected-exposure IBIT product.

Commodities

Oil: Brent trades back above USD 111 a barrel, up 2%, after a deadly drone strike on Saudi Aramco’s Shaybah field which left operations unaffected, while a separate attack on King Fahd International Airport in Dammam killed one. Both incidents highlight the risk of further escalation that could disrupt supply. Prices whipsawed again on Wednesday following another unsubstantiated report of a potential Qatar-Pakistan peace proposal. Meanwhile, the EIA reported a hurricane Isaias-related weekly drop of 0.4 mb/d in US crude production. Distillate inventories recovered from a record seasonal low, while gasoline stocks fell to their lowest level since 2014. Both gasoil and ULSD (HO) remain near USD 200 a barrel, highlighting continued tightness in refined-product markets.
Metals: Spot gold fell 1.3% to around USD 4,090 an ounce as rising energy prices added to inflation and interest-rate concerns, triggering further speculative selling. This pressure has only been partly offset by continued ETF demand, with Bloomberg data showing an 11.4-tonne increase in holdings this week to a fresh four-year high. The key question now is whether gold can find support below USD 4,100 for a third time this month, or whether we may witness a sustained break. Silver dropped 3% to USD 56.20, while copper slipped 1.5% to USD 6.48 a pound.

More in our Commodity News, Analysis & Commentary

Fixed Income

US Treasury yields rose slightly Wednesday, but were lower again into early Thursday hours on wobbly risk sentiment, with the benchmark US 2-year treasury yield peaking at 4.83% Wednesday before closing up over two basis points and just above 4.80% and then rolling back lower to below 4.78% early Thursday. At the longer end of the yield curve, the 10-year treasury yield ended Wednesday only one basis point higher at 5.12% after a choppy session and dropped back to 5.08% early Thursday. A Treasury auction of 20-year notes drew solid demand.
Germany-France sovereign yield spreads widened again Wednesday, with the 10-year spread ending the day at its widest daily close for the cycle since 2012, up over six basis points to over 159 basis points. The benchmark French 10-year OAT sovereign bond yield rose eight basis points Wednesday to close at 5.013%, its first daily close above 5.0% in over 24 years.

Currencies

The US dollar weakened slightly Wednesday and early Thursday, with EURUSD little changed but slightly higher from Wednesday’s close near 1.1245 early Thursday, while the Japanese yen firmed more as USDJPY traded back near 157.75 and at times near the two-week low of 157.55 as global bond yields steadied.
AUD traded weaker, as weak metals prices weighed, sending AUDUSD back toward 0.7015 early Thursday after a 0.7037 high and AUDJPY reversed sharply from a 111.31 high early Thursday to trade as low as 110.46 before rebounding.
EURGBP rebounded from its 17-month low Wednesday at 0.8372 despite the ongoing negative focus on French sovereign bonds, trading near 0.8392 early Thursday.

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

Saxo Bank

SpaceX hopes burn bright as huge internal divergences within US market continue.

Wed, 21 Oct 2026 11:40:00 Z

Big round number in France's 10-year yield.

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

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

Cancellation, not calm - Options Brief - 21 October 2026

Wed, 21 Oct 2026 11:30:00 Z

The index closed up a quarter of a per cent and the price of index volatility fell 6%. Underneath it biotech rose 3.64% and the biggest technology names fell. The quiet was arithmetic.

The index stood still because its parts pulled against each other.

MARKET REGIME: TRANSITIONING | VIX 17.31 | TERM STRUCTURE: CONTANGO | SKEW: ELEVATED (160.40) | FRONT-MONTH VIX FUTURES: 18.350

Today in brief

The short version. Index volatility fell across the curve and hardest at the front, three-month implied correlation dropped 5.86% to 12.86, and the typical single name’s implied volatility did not move at all. The index was quiet by cancellation rather than by calm.

Markets. The S&P 500 rose 0.28% to 7,712.57 and the Nasdaq 100 fell 0.13%, while the equal-weighted S&P gained 1.15%, the small-cap fund 1.66% and biotech 3.64%. Meta fell 1.59% and Alphabet 1.13%. Equifax rose 11.3% and Eli Lilly 3.5% on results, General Motors fell 6.8%, and after the close SpaceX added around 9% and Tesla about 2% on merger talk. Europe was mixed and mostly lower, with the German to French ten-year spread at its widest of this cycle. This morning the Kospi is up 2.79% and Brent is at 110.44.

Volatility curve. VIX1D fell to 11.20 and the nine-day measure to 16.27, against the thirty-day at 17.31. The one-year gave up only 0.25 to 22.05 and sits near the top of its sixty-session range. The October VIX future settles at this morning’s open, so November at 18.650 becomes the reference contract.

Single names. Median implied-volatility rank on an identical 187 US names rose to 46.1 from 45.2, with median implied volatility unchanged at 33.6%. Rank rose most in health care, up 3.9 points, and energy, up 2.9, which is where the rotation went.

Looking back: TLT. The 20 November 76 put sold on 29 September has earned 80% of its premium with 21 of 52 days gone. What is left pays about 3.0% a year against 4.11% on a one-month Treasury bill. In our view the last part of a premium can be the worst paid.

Flow. Nine of the ten reports read as rolls, paired legs and mid-market prints with no readable direction. Nothing in the set pairs an index position against single names, so the flow does not corroborate the correlation story.

This week’s range. Two sessions in, the S&P 500 has used 45% of the 1.56% priced for the week, against 40% of the week. The volatility index has gone through the bottom of its band, and that row’s expiry settles this morning.

Earnings and catalysts. Meta and Tesla report after the 22:00 CET close, both priced under their own history at 0.9x and 0.8x the eight-report average. UK inflation at 08:00 CET, the weekly petroleum report at 16:30 CET and a twenty-year note auction at 19:00 CET fill the session.

What it adds up to. Today’s expiry prices 0.534% and Friday’s 0.957%, against 1.21% quoted for that same Friday a session ago, while SKEW held at 160.40. In our view the option market took premium out of correlation rather than out of the parts, and two of the index’s largest names report tonight.

That is the whole brief in one read. The sections below hold the detail behind each paragraph, with the charts, the full set of readings and the sources, for when you want to go deeper on one part.

Headline driver

The S&P 500 closed up 0.28% at 7,712.57 and the Nasdaq 100 fell 0.13%, which reads as a quiet session until you look inside it. The equal-weighted S&P rose 1.15%, the Russell 2000 fund 1.66%, biotech 3.64%, healthcare 2.37% and regional banks 1.96%. The large technology names went the other way, Meta losing 1.59%, Alphabet 1.13% and Apple 1.00%. The two moves were close to the same size and pointed in opposite directions, so the index recorded almost nothing. Equifax rose 11.3% and Eli Lilly 3.5% on results, while General Motors fell 6.8% on its cost outlook. After the close SpaceX added around 9% on a 4.4 billion dollar quarterly profit and Tesla about 2%, after Elon Musk called a merger of the two a good idea.

Market snapshot

US (Tuesday 20 October close): S&P 500 7,712.57, up 0.28%. Nasdaq 100 29,490.28, down 0.13%. Dow Jones Industrial Average 52,501.24, up 1.02%. The equal-weighted S&P 500 rose 1.15% and the Russell 2000 fund 1.66%. Biotech led at 3.64%, pharmaceuticals 3.07% and healthcare 2.37%, while technology fell 0.28% and semiconductors 0.38%.
Europe: the Stoxx 600 eased 0.14% and the Euro Stoxx 50 0.38%, with the DAX little changed at 25,304.42 and the CAC 40 down 0.38%. Switzerland’s SMI rose 0.76% on a cancer-drug partnership. The German to French ten-year spread closed at its widest of this cycle, 153 basis points.
Asia (Wednesday morning): the Kospi rose 2.79% to 5,707.57, recovering Tuesday’s fall in Korean technology shares. Hong Kong’s Hang Seng eased 0.35% and the CSI 300 0.65%.
Commodities and rates: Brent traded at 110.44 and WTI at 99.22 at the 06:00 CET pull, both up around 1.5%. Gold held near 4,136 and silver eased 0.87%. The US ten-year yield was 5.123%, the thirty-year 5.434% and the two-year 4.79%. Bitcoin slipped 0.51% to 82,560.
Market regime: transitioning, with the VIX at 17.31, the cash curve in contango and SKEW elevated at 160.40.

All figures from the watchlist export taken at 06:00 CET on 21 October 2026. Source: Saxo, Bloomberg, CBOE.

Volatility surface

The cash curve against the previous session, over each tenor’s 60-session range, with the one-session change across every measure on the board. Source: Saxo, Bloomberg, CBOE.

The whole cash curve came down and the front came down hardest. VIX1D fell 0.73 of a point to 11.20 and the nine-day measure 1.66 to 16.27, against 1.13 off the thirty-day at 17.31. The one-year gave up 0.25 to 22.05 and stays near the top of its sixty-session range. The fall was concentrated where the index was being hedged rather than spread across the term.

Ratios. VIX1D/VIX reads 0.65, unchanged from a session ago. VIX3M/VIX rose to 1.10 from 1.06 as the front fell away from the back. VXN/VIX is 1.46 against 1.39, with the Nasdaq gauge at 25.22, giving back less than the broad measure.

VIX futures. The October contract reads 18.350 and November 18.650, a front-month ratio of 0.985. October settles against this morning’s opening quotation, so its premium to spot is not comparable with a session ago and no change is drawn from it. November becomes the reference contract today, over a window carrying the 28 October Federal Reserve decision and the 3 November midterms.

Rates and correlation. The bond gauge rose 0.39% to 101.71 and oil volatility 3.76% to 52.11, now 3.01 times the equity gauge against 2.72 a session ago. Gold volatility eased 1.80% to 21.83. Three-month implied correlation fell 5.86% to 12.86 while dispersion rose 2.27% to 37.33, the two moving apart rather than together.

Single-name volatility

Median implied-volatility rank, identical 187 US names: 46.1 from 45.2.

What the options market taught us: TLT

On 29 September we looked at selling a TLT put: the 20 November 76 put, an obligation to buy the bond ETF at 76. Long-dated yields have eased since and TLT has risen, with four weeks still to run.

TLT closes against the 76 strike, and premium earned against time used. Past performance is not indicative of future results. Source: Saxo price data, author calculation.

Collected: 0.98 on 29 September.
Worth now: 0.195 (indicative mid, 20 October close): 80% earned, 21 of 52 days gone.
Left to earn: 0.195 over 31 days on USD 7,600, about 3.0% a year (0.195 / 76 x 365 / 31), below the 4.11% on a one-month Treasury bill (Federal Reserve, 19 October).

In our view, the last part of a premium can be the worst paid. The chance of assignment has fallen, but the cash tied up and the loss below 75.02 have not. Holding keeps both in place to earn that 0.195; closing frees the cash and forgoes it; rolling later collects new premium for a longer commitment; assignment means owning TLT at an effective 75.02. Hypothetical, for education only.

Options carry a high risk of rapid loss and are not suitable for every investor. Costs and charges apply and vary by account and venue. Past performance is not indicative of future results. Source: Saxo price data, author calculation.

Options flow sentiment

Based on end-of-day 20 October, yesterday’s positioning, not today’s price action.

Single-name flow gave no readable direction. Nine of the ten reports are rolls, paired legs and mid-market prints, several carrying a conviction label of two out of five. The one clean strand sits in energy, where protection was bought on the ask and upside was supplied.
Sector and ETF flow does not corroborate the index story. Nothing in the set pairs an index position against single names, which is the shape a correlation trade takes, and the only explicit index-level prints were upside calls bought on the ask.

Where the week's range sits

The range the option market priced for this week around Friday 16 October’s close, with the nearest listed strike at each bound. Two sessions have traded, so the marker sits on Tuesday’s close. Straddles come from the Saxo chain at Friday’s close, centred on put-call parity. Illustrative only, not a trade recommendation. Source: Saxo, Bloomberg, CBOE.

Two sessions in, the S&P 500 has used 45% of the 119.13 points, 1.56%, priced around Friday’s close, against 40% of the week.

Gold has used 56%, all of it downward, the only market past half its range. The Nasdaq 100 fund has used 43%, the bitcoin fund 32% and energy 13%.

The volatility index has gone through the bottom of its band, priced between 17.52 and 22.46 around Friday’s 19.99 close and now at 17.31. That row’s 21 October expiry settles at this morning’s open, so the band is finished.

Friday’s expiry stops before the 28 October Federal Reserve decision, so none of the band pays for it.

Options carry a high risk of rapid loss and are not suitable for every investor. Costs and charges apply and vary by account and venue; check the rates applicable to you before entering any position.

Today's catalysts

UK September inflation and public sector borrowing at 08:00 CET, the European releases of note.
The weekly US petroleum inventory report at 16:30 CET, inside the cash session. The industry body reported a 4.9 million barrel draw in US crude stocks the evening before, with Brent near 110 for a third day.
A US twenty-year note auction at 19:00 CET, three hours before the 22:00 CET cash close, with the ten-year yield at 5.12%.
The Federal Reserve is in blackout before the 28 October decision.
Earnings today: Meta and Tesla after the cash close, with IBM, Texas Instruments, Lam Research, Thermo Fisher, Abbott, AT&T and SAP around it.

Earnings scorecard

Option-implied expected move for each report day against the average move after the last eight reports, as of 21 October 2026. Illustrative only, not a trade recommendation. Source: Saxo, Bloomberg, CBOE.

Tonight’s two are both priced below their own history. Meta prices 6.7% against a 7.4% eight-report average, 0.9x, and Tesla 5.9% against 7.8%, 0.8x. Meta’s last four reports moved 11.3%, 10.4%, 8.6% and 8.0%, so the premium is asking for a calmer release than the recent run.
The widest premium on the board is not in technology. Novo Nordisk prices 7.2% against a 5.0% average, 1.4x, and Novartis 3.1% against 2.1%, 1.5x. Both are health care names, which is where single-name implied-volatility rank rose most yesterday.
Rank and event premium answer different questions. Roche carries a rank of 79 and prices about 1.6%, the smallest expected move among the names still to report. A high rank says the name is dear against its own year; the expected move says what this particular report is worth.
Next up: Meta, Tesla and SAP tonight, Nestle and Roche tomorrow.

Options carry a high risk of rapid loss and are not suitable for every investor. Costs and charges apply and vary by account and venue; check the rates applicable to you before entering any position.

What the market is pricing

Session implied range: today’s expiry prices 41.15 points, 0.534%, against 42.1 and 0.55% yesterday.
Event implied range: Friday’s expiry prices 73.80 points, 0.957%, against 92.9 and 1.21% a session ago, four sessions to run then, three now. Decay alone leaves about 80.5, so roughly 7 points came out beyond the clock.
Correlation read: three-month implied correlation fell 5.86% to 12.86 while the typical US single name’s implied volatility was unchanged at 33.6%, so the index gauge’s 6.13% fall sits in correlation rather than in the parts. Median rank rose most in health care, up 3.9 points, and energy 2.9: single-name volatility rose where the rotation went, while index volatility fell.
Tail risk signal: SKEW eased 0.90% to 160.40 and the tail-risk gauge 14.77% to 17.32. Far downside is cheaper than a session ago, still dear against anything before last week.

In our view the index’s quiet is arithmetic, not a settled market. Mega-cap technology and the rest moved the same distance in opposite directions, the index netted them off, and the option market repriced correlation, not the parts. Two of its largest names report tonight, and what cancelled yesterday need not cancel again.

Related articles/content
The front end drains the tails do not - Options Brief - 20 October 2026 Correlation returns the index follows - Options Brief - 19 October 2026 Market Quick Take - SpaceX and Tesla merger on the cards - 21 October 2026 Market Quick Take - Korea slides as Brent holds near 110 - 20 October 2026

More from the author
Koen Hoorelbeke's articles on Saxo Follow and interact with me on X (Twitter) for more intraday content

Koen Hoorelbeke

Investment and Options Strategist

Saxo Bank

SpaceX earnings: rockets built the empire, but AI is driving its future

Wed, 21 Oct 2026 09:45:00 Z

Key takeaways

SpaceX's revenue jumped 161%, with artificial intelligence becoming its largest business.
Starlink remains the profit powerhouse, while a major acquisition accelerates SpaceX's ambitions in artificial intelligence.
Spending is accelerating, and a possible Tesla merger adds opportunity alongside considerable uncertainty.

When investors think of SpaceX, they picture rockets returning to Earth, satellites filling the sky and Elon Musk dreaming about Mars. But its latest earnings suggest the company's most important launch may be happening much closer to home.

On 20 October 2026, SpaceX reported third-quarter revenue of 14.6 billion USD, up 161% from a year earlier. Net profit reached 4.4 billion USD, reversing a 1.1 billion USD loss and comfortably beating analyst expectations, as compiled by Bloomberg.

The surprise? More than half of SpaceX's revenue now comes from artificial intelligence, not rockets or satellites. For investors, this changes the question. SpaceX is no longer simply a space company. It is becoming a sprawling infrastructure and technology business, with very different sources of growth, profits and risk.

From rockets to artificial intelligence

SpaceX now has three main businesses: rockets and space services, Starlink satellite internet, and a fast-growing Super Intelligence division.

The last of these stole the show.

Super Intelligence generated 7.6 billion USD in quarterly revenue, up approximately 830% from a year earlier. The business develops AI models and software while renting powerful computing capacity to other companies.

Growth reflects new computing contracts, greater adoption of its Grok software and the acquisition of Cursor, an AI-powered coding platform.

SpaceX completed the Cursor acquisition in August at an implied equity value of 60 billion USD. The logic is interesting: rather than simply providing computing infrastructure, SpaceX increasingly wants to own the applications running on it.

Think of it as owning the electricity supply, the factory and some of the products coming off the production line.

The division also turned profitable at the operating level, earning 431 million USD. This matters because investors have become increasingly concerned about whether enormous AI investments will eventually produce real earnings.

But there is an important distinction. Revenue is growing spectacularly, while investment spending remains even larger.

Starlink pays the bills, while Starship builds the future

Beneath the AI headlines, Starlink may be SpaceX's most attractive business today.

Its satellite internet division generated 5.2 billion USD in revenue, up 69%, and 2.4 billion USD in operating profit.

Consumer subscribers reached 13.6 million, while demand from businesses and governments continued expanding.

Unlike rocket launches, which depend on individual contracts, internet subscriptions generate recurring revenue. Once the satellites are operating, each additional customer can help spread the network's enormous fixed costs.

Meanwhile, the traditional space business generated 1.8 billion USD in revenue but recorded a small operating loss.

This exposes an interesting relationship. Rockets enable Starlink to grow, Starlink generates profits, and those profits can help fund more ambitious projects.

Starship could eventually strengthen this advantage by carrying more satellites at lower cost per unit, although its economics still need to be proven.

SpaceX and Tesla: better together?

There is also a potentially much bigger development. During the earnings call, Musk was asked whether merging SpaceX with Tesla would make sense. His response was unusually direct: “Do I think it would be a good idea? Yes.”

Both companies have established independent committees to explore a possible merger, although no agreement has been reached.

The logic goes beyond combining rockets and electric cars. Tesla develops electric vehicles, robotics and energy systems, while SpaceX brings satellite connectivity, AI computing and launch infrastructure. Together, they could share technology, reduce duplicated spending and accelerate development.

At a combined market value of approximately 3.5 trillion USD, however, this would be an extraordinary transaction. Musk also cautioned that a deal is far from guaranteed and ultimately requires shareholder approval.

For investors, the important question is whether combining these businesses would create more value than keeping them separate. Bigger does not automatically mean better.

What investors can learn

Follow cash, not just growth: compare rising AI revenue with investment spending and actual cash generation.
Separate the businesses: evaluate recurring Starlink profits differently from the more uncertain AI and rocket ambitions.
Watch the merger terms: assess whether any Tesla combination creates value without adding excessive financial or governance risks.

The next launch matters more than the last

SpaceX's latest results reveal something more interesting than another successful rocket launch. The company is building an interconnected business where rockets support satellites, satellites generate recurring profits, and artificial intelligence offers another enormous growth opportunity.

That combination could prove powerful, particularly if the businesses reinforce one another and reduce costs over time. But rapid growth is not the same as lasting shareholder returns. With investment spending accelerating and merger discussions emerging, expectations are rising almost as quickly as revenue.

SpaceX has already demonstrated that it can send rockets into orbit and bring them safely home. Its next challenge is less spectacular, but arguably more important for investors: turning extraordinary ambition into sustainable cash flow.

Ruben Dalfovo

Investment Strategist

Saxo Bank

Topics: Equities Highlighted articles UKMustRead Artificial Intelligence Theme - Artificial intelligence Tesla Motors Tesla Inc. Quarterly earnings

Autumn Budget 2026: 5 things that have changed for the OBR since March

Wed, 21 Oct 2026 08:47:00 Z

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

The 5 things that have changed for the OBR since March

1) Economy larger than expected

Britain’s economic resilience and growth has surprised. In the OBR’s central forecast from March, real GDP growth was expected to slow from 1.4 per cent in 2025 to 1.1 per cent in 2026, down 0.3 percentage points lower than in November due to the weaker-than-expected GDP outturns in late 2025.

GDP has since accelerated to 1.8 per cent in the three months to August — the fastest pace of expansion since 2022. On an annual basis, GDP grew by 2.1% in August, well ahead of the expected 1.7%. Even the IMF, often a bit of a doomster on Britain, raised its growth outlook to 1.3% in 2026, an upgrade from the measly 0.8% in April.

Good bits – business investment +5.2%, breadth overall and AI-related productivity boost.

Bad bits – govt is driving output, +12% over last 4 years vs +2% for private sector, jobs vacancies at 5yr lows, construction –2% weaker despite buildout of AI infrastructure.

2) Labour market stronger than expected

The OBR’ forecast was for the unemployment rate to rise from 4.75% in 2025 to a peak of 5.3 per cent in 2026. While it remains the case that labour market weakness is driven primarily by entrants into the labour force struggling to find work (Neets), as the OBR said, the overall outlook would appear more positive than the OBR predicted. Latest figures showed the jobless rate fell to 4.7% from 4.9% from the month before, with a rise in payrolls, though vacancies fell to a 5-year low, indicating a low-fire, low-hire jobs market.

3) Productivity growth better than expected

The starting point for UK productivity is better than official data has been telling us. The OBR said in March that it sees potential output growth of 1.5% over the medium term, but the composition of growth tilting back to productivity, rising to 1% by the end of the forecast. Since then changes to the way the ONS looks at the data has seen UK productivity growth revised higher. Coupled with emerging signs of an AI-led improvement in productivity growth suggests the forecasts could be rosier in this Budget. Annual productivity growth expanded almost 2.4% between the third quarter of 2024 and the first three months of 2026, while output per hour rose by 1.4% in the year to June, meaning the starting point is higher than it was in March, which could see the OBR revised up its forecasts for productivity growth. Why does this matter? The OBR assumed 1% growth but noted in March that if productivity growth was 1.5% a year over the forecast, for example, borrowing could be £50 billion lower in 2030-31.

4) Inflation higher than expected

The US-Iran war has obviously changed the dynamic for inflation. Higher inflation eats away at departmental spending budgets in real terms, which casts doubts around forecasts for spending restraint. It also raises the tax take and narrows the fiscal gap quicker on balance. Slowing wage growth, the OBR said in March, means CPI would fall from 3.4% in 2025 to 2.3% in 2026 and 2.0% from 2027 onwards. Now inflation is expected to break 4% perhaps early next year. Latest data shows CPI inflation rose to 3.5% in September, up from 3.1% in August and ahead of the 3.4% anticipated as surging petrol prices (+8.2%) stoked the headline rate. Core inflation, which excludes food and energy, also ticked up to 2.8% from 2.6%, hinting perhaps at some broadening in price pressures.

5) Borrowing has been higher and the fiscal headroom lower

UK government borrowing has fallen this year but has remained above the forecasts. Borrowing was £97.8 billion in the financial year to September 2026, down £4.4bn from last year but £6bn above the OBR forecast. Debt at the end of September 2026 was provisionally estimated to have exceeded £3 trillion for the first time. However, as a proportion of the economy, debt was lower than a year earlier. This means the fiscal headroom has likely been halved from the ~£24bn left by Rachel Reeves in March.

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-budget-2026

CoreWeave after the bond scare: what a cash-secured put pays for, and what it carries

Wed, 21 Oct 2026 06:55:00 Z

CoreWeave shares fell about a quarter in a month as its bonds traded at distressed yields. Puts now pay more than usual. What does a cash-secured put seller get paid for, and what does the seller take on?

When a company’s bonds come under pressure, its puts get more expensive. The seller collects more, and takes on more.

CoreWeave (CRWV on Nasdaq), which rents out computing power for AI, has had a hard month. Its shares closed at USD 62.13 on 20 October 2026, about a quarter lower than a month earlier and not far above their lowest level of the past year (Source: Saxo). Past performance is not indicative of future results.

Most of the damage came on 14 October, when the shares lost more than 15% in one session. The trigger was CoreWeave’s own debt: yields on its US dollar bonds climbed to levels usually seen in distressed debt, and on the bond due in 2031 investors briefly asked for more than 16% a year. The next day the selling spread to AI-related shares in Japan and South Korea (Sources: Reuters via The Star and ARY News, both 16 October 2026).

The business itself is still growing fast, and still losing money. CoreWeave reported a backlog of contracted revenue of about USD 104 billion at the end of June, and a net loss of USD 626 million for the second quarter (Source: CoreWeave Q2 2026 results, 11 August 2026). For investors already holding CoreWeave, or considering a position, options can add structure to a view they already have.

CoreWeave daily, with the 50 strike and the 20 November 2026 expiry marked. Past performance is not indicative of future results; figures are illustrative and not predictive. Source: SaxoTrader, indicative prices, as of 20 October 2026, 22:26 CEST.

What credit stress does to put prices

When investors doubt that a company can repay its bonds, they also pay more for protection against a fall in its shares, so a put seller collects more for the same strike. A rough gauge: add the at-the-money call and put for the 20 November 2026 expiry and compare the total with the share price. For CoreWeave, that points to a move of about 23% in either direction by expiry, four to five times what options price for QQQ, the ETF that tracks the Nasdaq 100, over the same weeks. (CoreWeave: call USD 7.28 plus put USD 6.92 makes USD 14.20, on a share price of USD 62.13. Source: Saxo, indicative prices, as of 20 October 2026, 22:26 CEST.)

In our view, that gap is mostly what a CoreWeave put seller is paid for: the chance that the shares fall far and fast, as they did on 14 October. Future outcomes are uncertain and may result in losses; options carry a high risk of rapid loss and are not suitable for every investor. Costs and charges apply and vary by account and venue.

Why the 20 November 2026 expiry

The example uses the standard monthly options that expire on Friday 20 November 2026. Each contract covers 100 shares, is priced in USD and is American-style. At the strike used here, this expiry has far more open interest than the weeklies around it (Source: Saxo), and a month of time decay (theta, the small amount an option loses each day) works for the seller.

As of 20 October 2026, CoreWeave had not announced when it will report its third-quarter results. Last year it reported the third quarter on 10 November 2025 (Source: CoreWeave investor relations). On that pattern, the report would land before expiry, and a put sold now would span it, with a results-day move of its own on top of the bond story.

For the investor who wants to own CoreWeave lower: a cash-secured put at 50

Selling a cash-secured put means agreeing to buy 100 shares at the strike if CoreWeave is below it at expiry, for a premium collected today, with the cash to pay for them set aside. The view behind it: the company can work through its debt problems, and the investor would be glad to own CoreWeave at USD 50, though not at today’s price.

Hypothetical, for education only. Not advice or a trade recommendation.

Example structure (illustrative only - not a trade recommendation)

Sell 1 CoreWeave 20 November 2026 50 put at about 2.29 (bid 2.26, ask 2.33), with the shares at USD 62.13
Premium received: about USD 229, against USD 5,000 of cash set aside, about 4.6% of it
Delta: about -0.19, our rough estimate, from Saxo prices, of the chance of assignment
Purchase price if assigned: USD 47.71, about 23.2% below the price at the time
Maximum profit: USD 229 (hypothetical); maximum loss: USD 4,771 (hypothetical), if CoreWeave fell to zero
(Source: Saxo, indicative prices, as of 20 October 2026, 22:26 CEST)

All figures are hypothetical and for education only.

Why 50? It is about 20% below the share price, near the bottom of the range the options market prices to expiry, and plenty of contracts are already open there (Source: Saxo). A move of the size the market expects could still reach it.

Risk: the USD 229 is the whole upside, however far CoreWeave recovers. Below USD 47.71 the loss grows dollar for dollar, as it would for a shareholder. The premium does little if the debt problems get worse. In a restructuring, lenders are paid before shareholders, and the shares can fall far below any strike. Two days like 14 October in a row would take them below the break-even, and they can open sharply lower after overnight news. Options carry a high risk of rapid loss and are not suitable for every investor. Costs and charges apply and vary by account and venue; check the applicable rates before entering any position.

At expiry (hypothetical):

Above USD 50: the put expires worthless and the seller keeps the USD 229.
Between USD 47.71 and USD 50: the seller buys 100 shares at 50 and, counting the premium, is roughly flat.
Below USD 47.71: the seller buys the shares at 50 and carries a loss that grows with every dollar lower.

The 50 put in the SaxoTrader trade ticket, with the platform’s risk graph, maximum risk, maximum profit and break-even. Hypothetical, for education only. Past performance is not indicative of future results; figures are illustrative and not predictive. Source: SaxoTrader, indicative prices, as of 20 October 2026, 22:26 CEST.

Testing the premise

The case against starts with the bonds. In our view, lenders who ask for around 16% a year are pricing a real chance that they will not get all their money back. An investor who reads them that way may decide the premium is too little, and stay out.

The case for points to the backlog, and to a share price that has already lost about a quarter in a month. An investor who likes the business but not the timing could wait for the third-quarter report, or use a put spread: sell the same put and buy a lower one, which caps the loss for a smaller premium.

Before placing the trade, check:

Bid and ask spreads; selling at the bid gives up part of the premium
That the full cash amount is set aside; the platform’s margin requirement may be lower
An exit plan; the put can be bought back before expiry if the view changes

Assignment risk note: CoreWeave options are American-style, so a short put can be assigned before expiry if it moves in the money.

Final thoughts

In our view, this trade only suits an investor who would be comfortable owning CoreWeave at USD 50 even if the news on its debt got worse. The premium is higher than on a calmer stock because the risk is higher: if CoreWeave cannot refinance, the shares can fall well below the strike, and USD 229 does little against that. Options carry a high risk of rapid loss and are not suitable for every investor.

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Related articles/content

Roche sales update buying lower or selling higher and being paid to wait | 20 Oct 2026
SAP earnings buying lower or selling higher and being paid to wait | 16 Oct 2026
TLT naming your price on long-term bonds and being paid to wait | 29 Sep 2026
AMD after a ten percent day taking something off the table without selling the shares | 22 Sep 2026
Finding unusually expensive or cheap options in the Saxo screener | 18 Sep 2026

What IV crush really means in practice reviewed version | 9 April 2026
Trading earnings with defined | 31 Mar 2026
--
Front end reprices long end holds - Options Brief - 15 October 2026
Sectors pull apart the index holds - Options Brief - 14 October 2026

More from the author
Koen Hoorelbeke's articles on Saxo Follow and interact with me on X (Twitter) for more intraday content

Koen Hoorelbeke

Investment and Options Strategist

Saxo Bank

Topics: Options Thought Starters Highlighted articles Theme - Crypto and blockchain ESMA Products NOT Mentioned

London Quick Take - 5 Things to Know in Markets Today - 21 Oct

Wed, 21 Oct 2026 06:34:00 Z

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

5 things to know in markets today

1.SpaceX AI revenues defy gravity

SpaceX's quarterly earnings answered a lot of near-term questions. Specifically demand for compute seems to remain insatiable, and the 830% rise in AI revenues answered a question investors had about how much contracted computing demand is feeding into recognised revenue. SpaceX also answered a question about how profitable that revenue is after depreciation and financing costs: adjusted EBITDA from the AI business was up 4x to $5.0 billion and net income turned positive $431mn from a net loss of $1.26bn in Q2. Though doubters will always raise questions about what renting out all this capacity means for SpaceX's own AI ambitions, and flag the scale of capex – which at $19.6bn in Q3 for AI exceeded expectations for about $18bn, the results should buy SpaceX plenty of time to execute deeper.

Overall revenues +161% to $14.6bn beat expectations for around $12.8bn and marked steep acceleration from the +92% revenue growth notched in Q2. Net profit at $4.4bn was more than double the expected, driven by sales of cloud computing. Connectivity, which includes Starlink, continued to underpin earnings. Connectivity revenues were $5.2 billion, well ahead of the roughly $4.5bn expected and up 22% sequentially and 69% year-over-year, with subscribers rising by 1.6mn in the quarter from 12mn at the end of Q2. AI revenues were $7.6 billion, up 195% sequentially and 830%(!) year-over-year, primarily driven by the activation of new cloud services agreements. SpaceX continued to scale compute, reaching 1.7 GW by the end of the quarter from 1.4GW in Q2. Space revenues were $1.8 billion, up 84% sequentially and 6% year-over-year.

SpaceX earnings were out of this world and shares rallied 9% in pre-market trade. But the attention is on the rumoured Tesla merger, which Elon Musk says would be a "good idea". Both firms have set up special committees to explore the tie-up, which would create a top-5 company by market cap. There has been speculation about a potential reverse merger between SpaceX and Tesla, which has intensified since the former's recent IPO. Whilst the move makes sense strategically on paper it could be very complex. A merger would see Musk consolidate his ownership and enable vertical integration of AI, robots, energy, transport and space, all backed by the multi-trillion Terafab facility. Operational integration already exists between the companies, eg Terafab, and it could just be a matter of time. SpaceX President Gwynne Shotwell said it "might make Elon's life a little easier" and indeed with huge crossover already a merger simplifies conflict of interest risks.

2.Tech shares lifted by SpaceX numbers

US shares were mixed yesterday with industrials leading the Dow up 1%, driven by a +5% rally for 3M after it raised full-year guidance. But after opening deeply in the red tech struggled to make a mid-session rally stick, leaving the Nasdaq flat for the session. The S&P 500 rose 0.3%. But earnings from SpaceX and Super Micro Computer have helped ease worries about the AI trade, sending the Kospi up 3% overnight and MSCI Asia Pacific rising 1.2%. US futures looking a bit firmer with tech finding a bit of bid from the SpaceX and SMCI numbers, NDX futs trade +0.8%, with Nvidia +1.8% in pre-market trade this morning.

SMCI jumped 15% after hours after hiking its fiscal Q1 revenue outlook to $18.5–$19.5 billion, far above its prior forecast and the $14.99 billion consensus, on stronger AI platform demand. Content is King: Netflix shares –6% after soft earnings guide...good numbers with profits +44% but slowest revenue growth in three years at 12% and expects further moderation in Q4...slowing engagement and ad revenue guidance weak...stock has come off a lot though and looks to be prepared to do whatever it takes to find the hit factory. The fix lies in the content.

3.Let them eat cake

European stock markets were mixed early Wednesday with the FTSE 100 down around –0.2%, extending its modest loss yesterday, while the DAX and CAC rose with some big swings across individual names.

Let them eat cake: EssilorLuxottica surged 13% in early trading after reporting Q3 revenue up 7.2% beating the 6.3% consensus. At the other end of the retail scale Carrefour shed 15% as it warned unrest in France would hurt its business. There's the K-shaped economy for you. With that in mind, it's instructive that French 10yr OAT yields are backing up 7bps this morning again close to the 5% marker, with Franco-German spreads widening out past 150bps. Ruinous debt from financing the American war against the British was a key cause of the last French revolution - it's not quite got that bad, but France's Fiscal Fragility remains front and centre.

4.UK inflation and borrowing overshoot

UK inflation more than expected last month, giving the Bank of England hawks another reason to shoot for a rate hike in November. CPI inflation rose to 3.5% in September, up from 3.1% in August and ahead of the 3.4% anticipated as surging petrol prices (+8.2%) stoked the headline rate. Core inflation, which excludes food and energy, also ticked up to 2.8% from 2.6%, hinting perhaps at some broadening in price pressures that the BoE is on the lookout for.

Sterling was flat vs the dollar on the news with a rate hike next month well discounted after the wage and employment report yesterday and recent GDP strength. GBPUSD steadied around 1.3370 having yesterday tested the 50-day SMA resistance at just a shade short of 1.34010, with the dollar stabilising somewhat. But the pound trades at its strongest versus the euro in 18 months, with EURGBP testing lows 0.8380, as bets on a stronger UK economy and rising BoE hike bets colliding with unease across the continent due chiefly to the problems in France. This has been quite a big rally for sterling, GBPUSD hitting 1.34 to clear 3 big figs since touching the June lows down at 1.3140 last week. Confidence around the UK seems to be building a bit ahead of the Budget next week after stronger-than-expected growth and labour market data in the last few days.

Inflation 🤝borrowing: Underlining the scale of the challenge facing the Chancellor ahead of the Budget, UK government borrowing rose more than expected in September to £24.5bn, nearly £2bn more than predicted by the OBR. We know the fiscal headroom will be down and Healey doesn't want to plug gaps with unproductive tax hikes - so far the market is prepared to give him the rope with the 10yr gilt yield steady at 5.41%, still 12bps below the cycle high.

5.Jackdaw: No cold turkey

Warmed-up Jackdaw means no cold turkey: How do you help lower inflation and boost Britain's productive capacity to grow? The best lever to pull is to lower the cost of energy. The government's decision to approve the Jackdaw gas field today won't in itself bring down energy prices - Jackdaw may produce about 6% of North Sea gas - and perhaps 2% of total UK demand, pumping by Christmas. But it's a signal the government is prepared to make sensible supply-side decisions. Let's hope for more of them after the Budget. Even the UN admits the world cannot go "cold turkey" on fossil fuels. Shares in Shell, which operates Jackdaw in a 50/50 joint venture with Norway's Equinor, rose about 0.8% in early trade, though this is likely more a factor of a fresh rise in oil prices with BP also trading +2% higher. More pertinently perhaps - shares of Ithaca rose 3.5% on hopes that the approval signals the government will also greenlight its Rosebank project.

Crude oil rose as reports of a possible peace deal between the US and Iran were scotched. Brent traded above $110 for a third consecutive day after swinging within a $6 range on Tuesday, following inaccurate reports of an imminent US-Iran agreement. Instead, Tehran is ramping up attacks on tankers in the Strait of Hormuz and there are little signs of progress on opening it up. Meanwhile traders are worried we could be heading into a difficult maintenance period that will disrupt flows.

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 - SpaceX and Tesla merger on the cards? - 21 October 2026

Wed, 21 Oct 2026 06:20:00 Z

Market drivers and catalysts

Macro: US private payrolls growth slowed and pending home sales slid to a record low
Equities: US equities ended mixed as earnings supported sentiment, Europe slipped on AI concerns and French risks, Asia rebounded sharply.
Volatility: Index gauges unwound at the short end of the volatility curve while crude vol firmed
Digital Assets: Listed crypto shares advanced while the tokens themselves drifted modestly lower
Commodities: Oil holds near USD 110 as supply risks persist, gold struggles and wheat slumps
Fixed Income: US treasury yields sideways. Germany-France yield spread widens again.
Currencies: USD slightly weaker in tepid trading range. GBP surge versus weak EUR continues.

Macro

ADP Weekly Payrolls showed US private payrolls rising an average of 18,500 per week in the four weeks to 3 October, a pace cited as consistent with a modestly softening labour market. US pending home sales fell 7.3% month on month in September to a record low, far worse than the 0.5% decline expected, with surging mortgage rates cited as weighing on affordability across every region. September CPI stood at 3.7% year on year.
In the UK, the unemployment rate fell to 4.7% in the three months to August, beating expectations of 4.9% and the lowest since mid-2025, with the employment rate rising to 75.3%.
In Asia, Japan's exports rose 16.7% year on year in September, below the 20.1% consensus and the softest growth in thirteen months, despite strong demand for AI-related chips and semiconductors. Bank of Japan Governor Kazuo Ueda said underlying inflation is nearing the 2% target amid a moderate recovery and a tight labour market, citing higher Middle Eastern energy costs and strong AI-related demand. Pakistan's army chief met senior Iranian officials in Tehran, though a diplomat denied an imminent agreement while confirming negotiations continue.

More in our Macro Analysis & Macroeconomic News

Macro calendar highlights (times in GMT)

0600 – UK Sept CPI
0600 – UK Sept PSNB
1100 – US MBA Mortgage Applications
1430 – EIAs weekly petroleum inventory report
1700 – US Treasury to auction 20-year notes

Earnings events

Today: Meta, Tesla, Lam Research, Philip Morris, SAP, Thermo Fisher Scientific, Texas Instruments, IBM, Abbott Laboratories, NextEra Energy, AT&T, Iberdrola, Danaher
Thursday: Procter & Gamble, Gilead Sciences, Union Pacific, Western Digital, Valero Energy, Blackstone, Newmont, Lockheed Martin, Spotify, Atlas Copco
Friday: ExxonMobil, American Express, Eni S.p.A, SLB

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

Equities

USA: The Dow gained 1% and the S&P 500 rose 0.3% on Tuesday, while the Nasdaq 100 slipped 0.1%, as solid earnings offset concerns about financing AI investments. Equifax surged 11.3% after stronger-than-expected results, while Eli Lilly climbed 3.5% amid strength in healthcare. General Motors fell 6.8% as its outlook highlighted rising costs. After the close, SpaceX jumped around 9% after reporting $4.4 billion in quarterly profit, while Tesla gained almost 2% after Elon Musk described a potential merger between the two companies as a "good idea", with independent committees exploring the possibility. Super Micro Computer also jumped 15.5% after preliminary sales exceeded expectations, improving sentiment ahead of further technology earnings.
Europe: The Stoxx 600 edged down 0.1%, the FTSE 100 fell 0.3%, and Germany's DAX slipped 0.1% on Tuesday, as renewed concerns about AI investments and France's public finances weighed on sentiment. ASML declined 2.7% amid pressure on chipmakers, while Schneider Electric fell 3.3% after raising €6 billion in new equity to help fund its $22.6 billion acquisition of US industrial software company PTC. Swiss industrial group ABB also declined despite record orders, highlighting growing investor caution towards companies exposed to data-centre spending. Roche offered some support, gaining 2.6% following a major cancer-drug partnership, helping Switzerland's SMI rise 0.8% even as French equities remained under pressure.
Asia: Asian equities rebounded on Wednesday, with South Korea's Kospi gaining 3% around midday and Japan's Nikkei 225 rising 1%, as strong US earnings helped ease concerns about AI spending. Samsung Electronics and SK Hynix recovered after falling 3.0% and 4.2%, respectively, on Tuesday, when financing concerns surrounding AI projects weighed heavily on Korean technology shares. The volatile backdrop was also evident in AI cloud company Elice, which rebounded sharply after plunging on its stock-market debut, while stronger Japanese exports provided additional support. Despite the recovery, investors remained focused on whether upcoming earnings could justify the technology sector's heavy spending and elevated valuations.

More in our Equity Trading - Stock Market Analysis & News

Volatility

VIX fell 6.1% to 17.31 as front-end hedges unwound alongside easing concerns over AI-related credit. VIX9D dropped 9.3% to 16.27 and VIX1D 6.1% to 11.20, while VVIX fell 9.2% to 97.15, reversing last week's scramble for upside VIX calls. The front VIX future eased 0.75% to 18.350 on its settlement day. The cash curve held contango, SKEW stayed elevated at 160.40 and MOVE edged up to 101.71, leaving rates vol steady against the equity unwind.
Crude vol rose, OVX up 3.8% to 52.11. SPX options imply a 41.15 point move, 0.534%, for today's expiry and 73.80 points, 0.957%, into Friday, with Tesla and Meta reporting.

More in our Options Trading - Stock Market Analysis & News

Digital Assets

BITCOIN ~82,659 -0.32% | ETHEREUM ~2,443 -0.14% | IBIT 46.71 +0.89% | ETHA 55.07 +1.77% | AS OF ~06:00 CET

Listed crypto equities moved ahead of the tokens. Strategy rose 4.9%, Circle 5.5% and Coinbase 1.4%, while miners were mixed, Marathon up 1.4% against Iren 4.0% lower and Riot 1.4% lower. Deribit's DVOL edged up 0.8% to 37.16. BlackRock's IBIT absorbed $665.2 million Monday, its largest session since October 2025, lifting the US spot bitcoin complex to $526.6 million net while Fidelity and Grayscale redeemed, leaving one allocator to set the category sign. Spot ether ETFs lost $103.3 million, a 14th negative session in 15.
J.P. Morgan Asset Management included bitcoin in its annual Long-Term Capital Market Assumptions for the first time, projecting a 10% compounded annual return over ten years at 55% volatility, against 5.5% for gold. Its authors said unstable correlations remain an obstacle to wider portfolio inclusion.

Commodities

Oil: Brent trades near USD 110 for a third consecutive day after swinging within a six-dollar range on Tuesday following inaccurate reports of an imminent US-Iran agreement. Instead, continued attacks on ships around the Strait of Hormuz threaten supply while driving up freight and insurance costs. Together, these factors are keeping refined-product prices elevated, with distillates near USD 200 per barrel and Morgan Stanley warning that fuel tightness could persist through mid-2027. Meanwhile, Vortexa estimates that around 9 mb/d of crude has left the Gulf so far this month, well below levels implied by the US government. Ahead of today's EIA petroleum inventory report, the API reported a 4.9-million-barrel decline in US crude stockpiles.
Metals: Gold drifted back towards USD 4,100 on Tuesday before recovering to trade around USD 4,126 this morning. Elevated energy prices continue to cloud the interest-rate outlook, with traders pricing in three 25-basis-point rate hikes by next July. Overall, bullion remains confined to a relatively narrow range, caught between macroeconomic headwinds and continued demand from investors seeking protection against fiscal and geopolitical risks. Key resistance remains around USD 4,230, while support continues to emerge below USD 4,100.
Agriculture: Wheat futures slumped to their lowest level since mid-August, trading near USD 6.40 per bushel, down 20% from the three-year high reached last month. Prices have come under pressure amid hopes that an agreement to ease tensions in the Black Sea region could unlock substantial quantities of wheat from Russia and Ukraine currently awaiting export. The prospect of additional supplies comes at a time when Southern Hemisphere harvests are adding further pressure to an already weakening market.

More in our Commodity News, Analysis & Commentary

Fixed Income

US Treasury yields were little changed Tuesday and into early Wednesday, with the benchmark US 2-year treasury yield treading water near 4.88% and the 10-year treasury yield near 5.12% after a choppy session with wide swings in risk sentiment and oil prices. The US Treasury is set to auction 20-year notes later today. The US Treasury has controversially proposed ending the issuance of 20-year notes.
The Germany-France sovereign yield spreads widened again Tuesday, with the 10-year spread ending the day at its widest daily close for the cycle, up five basis points to 153 basis points total.
US high yield spreads widened on Tuesday, with the Bloomberg measure of the spread between high yield corporate bonds and US treasuries three basis points wider at 332 basis points. This is the highest level posted since the end of March, which saw a local cycle high of 335 basis points. SpaceX CDS prices, a measure of the cost to insure against a default on SpaceX corporate bonds, rose more than seven basis points to end the day near 234 basis points.

Currencies

The US dollar traded largely sideways on Tuesday, firming slightly against a weak Euro and ending the day slightly lower versus other currencies. USDJPY remains tightly rangebound just above the 158.00 level early Wednesday, while AUDUSD edged back above 0.7000 Tuesday, peaking at 0.7030 early Wednesday before dropping back.
EURGBP continues to trade heavily ahead of the UK autumn budget statement next Wednesday the 28th, hitting a new 17-month of .8385 Tuesday before finding support. French debt woes are likely a key driver of relative euro weakness there.

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

Saxo Bank

Asia Market Quick Take – 21 October, 2026

Wed, 21 Oct 2026 01:00:00 Z

Asia Market Quick Take – 21 October, 2026

Key points:

Macro: US ADP rose; UK unemployment falls to 4.7%
Equities: Dow outperforms rising 1%
FX: Pound was among the top G10 performers and yuan strengthens
Commodities: Oil whipsawed & gold under pressure.
Fixed income: Treasuries bull-flattened with real yields declining

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

Disclaimer: Past performance does not indicate future performance.

Macro:

ADP Weekly Payrolls showed US private payrolls rose an average of 18,500 per week in the four weeks to 3 October, highlighting a modestly softening labour market.
Japan’s exports rose 16.7% yoy in September 2026, below the 20.1% consensus and the softest growth in 13 months, despite strong AI‑related chip and semiconductor demand and broad-based gains across major destinations and categories.
US pending home sales fell 7.3% m/m in September 2026 to a record low, far worse than the expected 0.5% drop, as surging mortgage rates hit affordability and dragged down activity across all regions.
Pakistan’s army chief Asim Munir met senior Iranian officials in Tehran to discuss bilateral ties and talks with Washington, but a participating diplomat denied an imminent deal while confirming negotiations continue.
The UK unemployment rate fell to 4.7% in the three months to August 2026, beating expectations for 4.9% and reaching its lowest since mid‑2025, as unemployment declined and employment rose, pushing the employment rate up to 75.3% and nudging inactivity lower.
Governor Kazuo Ueda said underlying inflation is nearing the BOJ’s 2% target amid a moderate recovery and tight labor market, driven by higher Middle Eastern energy costs and strong AI‑related demand.

Equities:

US: US equities closed mixed as strong earnings offset AI credit concerns. The Dow Jones Industrial Average jumped 1.0% to 52,495.88, the S&P 500 rose 0.3% to 7,712.57 led by healthcare stocks, while the Nasdaq Composite edged down 0.02% to 26,424.82. Key movers: Equifax surged 11.3%, Eli Lilly gained 3.5%, and GM fell 7.6% after CEO Mary Barra warned of "intensifying" challenges and narrowed guidance. In after-hours trading, SpaceX posted $4.4 billion in net income, well above the $1.88 billion consensus, lifting S&P 500 ETFs. Tesla also gained 2% after Musk said he likes the idea of Tesla and SpaceX merging. Capital One rose 4.5% post-market on a strong earnings beat. Netflix sank on a disappointing subscriber update. Super Micro Computer jumped 15% after preliminary sales results $18.5-$19.5b vs estimate of $15b.
EU: European equities drifted lower, weighed by AI jitters and French political risk. The Stoxx 600 fell 0.1% to 638.64, with ASML down 2.7% the largest drag. The FTSE 100 dropped 0.3% to 10,733, with HSBC the biggest contributor to losses and Diploma falling 4.0%. The DAX was little changed at 25,304, with Brenntag the worst performer at -3.4%. The SMI outperformed, rising 0.8% to 14,478 led by Roche (+2.6%). The OMX Stockholm fell 0.9%, dragged by ABB (-4.9%). French stocks continued to underperform amid ongoing cost-of-living protests and fiscal concerns, with French 10-year OAT yields holding near multi-year highs at 4.95%.
Asia: Asian equities fell sharply on Tuesday as AI trade jitters and rate fears dominated. The MSCI Asia Pacific Index dropped as much as 1.2%. The Hang Seng Index fell 1.3% to 23,867.74, with Alibaba down 3.6% and Lenovo tumbling 10.0% after Citi cut its price target by 20%. CATL fell sharply ahead of earnings that subsequently missed estimates — net income rose 15% year-on-year to 21.25 billion yuan, well below the 26 billion yuan consensus. The Kospi plunged 3.7% to 5,552.74, with Samsung Electronics and SK Hynix each falling around 3–4% on AI spending concerns and the Elice IPO debacle. The STI slipped 0.1% to 5,404.02, with Yangzijiang Shipbuilding the worst performer at -3.1%. The Nikkei 225 also declined. However, sentiment has sharply reversed overnight: as of early Wednesday, the MSCI Asia Pacific Index is up 0.6%, the Kospi has rebounded 1.9%, and Nasdaq 100 futures are up 0.7% on the back of SpaceX and Super Micro earnings beats.

Earnings this week:

Wednesday: Abbott, NextEra Energy, AT&T, CME Group, Danaher, Tesla, Meta, IBM, Lam Research, Texas Instruments, Philip Morris
Thursday: Lockheed Martin, Nokia, Comcast, American Airlines, Bloom Energy
Friday: American Express, Schlumberger

FX:

All G10 currencies advanced against the greenback at the session's weakest point for the dollar.
USDJPY has slipped past 158, trading at 158.34 this morning (+0.1% on the day). The pair has traded in a tight 200-pip range over the past 20 days, with analysts noting the range increasingly resembles a managed currency. A Fed rate hike remains the clearest catalyst for a topside break.
GBPUSD is at 1.3374, holding above its 21-day moving average for the first time since late August, reinforcing near-term topside dynamics. The pound was among the top G10 performers during Tuesday's dollar weakness.
The yuan strengthened modestly onshore and offshore on Tuesday as the dollar weakened alongside falling oil prices.

Commodities:

Brent crude hit a five-month intraday high above $111 a barrel on Tuesday before reversing sharply, settling at $108.79 (-0.69%) after a diplomat confirmed that reports of an imminent US-Iran peace deal were inaccurate. WTI settled near $98 a barrel. The session saw a range of over $6 for Brent. Iranian IRGC reported tankers struck mines in the Strait of Hormuz, and Iran added 122 tankers to its sanctions list. Brent is currently at $109.50 and WTI at $98.50.
Gold settled at $4,122.40 on Tuesday (-0.40%), its second consecutive session of losses, as elevated oil prices fuelled inflation concerns and clouded the Fed rate path. Bullion is trading around $4,117 this morning, down more than 1% since the start of the week and approximately 22% below its January 2026 peak of $5,318. ETF gold holdings continue to rise, reaching a four-year high, but leveraged players have reduced exposure.

Fixed income:

The curve aggressively twist-flattened, with the long end rallying on haven demand from AI jitters and lower oil prices. The 10-year yield fell 2.6 basis points to 5.117%, while the 30-year fell 4.7 basis points to 5.424%. The front end was little changed, with the 1-year yield at 4.482%. The 5s30s spread compressed to 49.1 basis points from 52.9 basis points.
US 10-year real yields fell 4.9 basis points to 2.74% on Tuesday, though they remain 81 basis points higher year-to-date. September CPI was 3.7% year-on-year, keeping the inflation backdrop elevated. Treasury options markets showed two consecutive days of demand for downside protection targeting a 10-year yield rise to 5.3% by month-end, suggesting the market is not fully convinced the rally has legs.
French 10-year yields held near multi-year highs at 4.95%, extending underperformance versus Bunds. French bonds remain under pressure from ongoing cost-of-living protests and fiscal concerns, with a record share of investors reportedly underweighting French equities. US high-yield credit also remains stressed, with CCC spreads at 1,072 basis points — the widest since October 2022.

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.

APAC Research

Saxo Group

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The defence sell-off: Opportunity or warning sign?

Tue, 20 Oct 2026 12:26:00 Z

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

Key takeaways

The SPADE Defence Index has fallen nearly 13% over the past two months, despite positive industry catalysts, including heightened geopolitical tensions.
Defence stocks had priced in substantial future spending, but uncertainty around budget increases, higher inflation and yields, and the possibility of the Iran war ending have weighed on valuations.
Order books are at or near record levels, with backlog and book-to-bill ratios among the key indicators of future revenue across the sector.
With three of the four defence primes reporting today, all three have beaten earnings expectations and raised their full-year guidance.

Why do these earnings matter?

Defence demand remains strong, but valuations appear to reflect uncertainty over when record backlogs will translate into higher profits. Trump’s proposed annual defence spending of $1.5 trillion, up from $1 trillion, could be weighed down by growing expectations of a Democratic sweep in the upcoming midterm elections. The Financial Times reports that investors are betting that the Trump administration’s proposed $500 billion increase in military spending could be scrapped. Defence indices have also been negatively correlated with prediction-market expectations that Democrats will retake both chambers of Congress.

Trump’s 7 January 2026 Executive Order, “Prioritizing the Warfighter in Defense Contracting”, has added another layer of uncertainty for US defence stocks. The order allows dividends and share buybacks to be restricted where contractors are deemed to be underperforming, which can include insufficient production speed, investment or prioritisation of US government contracts.

With these measures determined at the Secretary’s discretion, higher orders may not necessarily translate directly into shareholder returns if companies are required to reinvest more heavily in production capacity. Aerospace and defence companies with a high proportion of revenue derived from defence and government contracts face greater exposure to political risk. Lockheed Martin, RTX and Northrop Grumman all identify changes in US government defence spending as a major risk in their financial statements.

Despite this, higher defence budgets provide further long-term support, while munitions replenishment remains a key global demand driver.

The question is whether results can show that record order books are turning into profit and cash while Washington’s budget remains unresolved.

Where the sector goes from here

Higher US defence budgets: The House has backed the proposed 2027 defence spending budget, but final funding still depends on congressional approval. Democratic opposition is focused on the broader scale and funding of the Iran war, the size of the defence increase, and how defence spending is balanced against domestic priorities. Some Republicans have also raised concerns over the deficit.
Munitions and air defence: Rebuilding depleted munitions stockpiles remains an immediate demand driver across the US, UK and Europe, while governments are also investing to expand production capacity and address manufacturing bottlenecks. Most recently, the EU allocated €168.2 million to projects expected to reduce production lead times by up to 90% from 2027.
Golden Dome: The layered US missile shield ordered by Trump presents a multi-year opportunity, but the timing of funding remains uncertain.
Modernisation: Ageing fleets, evolving threats and ongoing nuclear modernisation are driving long-term defence investment, while aircraft backlogs are forcing operators to keep legacy fleets in service for longer. All nine nuclear-armed states continue to modernise their arsenals.
Drones and autonomy: Drone and counter-drone spending is accelerating, with the Pentagon planning major drone procurement and the US Army recently awarding $4.15 billion in counter-drone contract ceilings. NATO has also identified counter-drone capabilities as a pressing priority.

One theme, three trades

Today’s earnings help answer two key questions: are defence backlogs converting into cash, and is demand continuing to grow?

The results could have implications for individual defence stocks and bonds, as well as ETFs with exposure to the industry.

Individual stocks

Company	Reporting date	Earnings call	Expected EPS	Reported EPS
GE Aerospace	20 October 2026	12:30pm BST	$2.00	$2.25
GE Aerospace raised its 2026 guidance across the board, supported by continued strength in orders, revenue and engine deliveries. Defence & Propulsion Technologies, which accounts for around 25% of total revenue, saw its operating margin decline by around 1% from Q2. Book-to-bill remained around 1.0x in Q3, while the year-to-date ratio moderated from 1.7x to 1.5x. The company also has more than $170 billion in commercial services backlog.
RTX	20 October 2026	1:30pm BST	$1.78	$2.26
RTX generates around 52% of its total sales from defence, with Raytheon focused on defence, while Pratt & Whitney and Collins Aerospace serve both commercial and military markets. RTX raised its 2026 outlook for adjusted sales, adjusted EPS and free cash flow, while backlog reached a record $340 billion, an 18% increase from Q2. Operating margin percentages improved from Q2 across Collins Aerospace, Pratt & Whitney and Raytheon, increasing by around 36%, 15% and 16%, respectively, based on the quarterly comparison. Raytheon’s book-to-bill rose to 6.54x from 2.4x in Q2, while its rolling 12-month ratio increased to 2.0x from 1.77x, indicating that new orders continue to outpace sales.
Northrop Grumman	20 October 2026	2:30pm BST	$7.18	$7.89
Northrop Grumman raised its 2026 financial guidance for segment operating income and MTM-adjusted EPS. The company is primarily exposed to defence, with the US government accounting for 84% of sales in 2025. The operating margin rate increased 14% from Q2 to Q3. Northrop Grumman’s backlog reached around $110 billion, approximately 5% higher than in the previous quarter. Its book-to-bill ratio was 1.5x, compared with 1.84x in Q2, meaning new orders continued to exceed revenue recognised during the quarter but at a lower rate.
Lockheed Martin	22 October 2026	1:30pm BST	$7.49	–
For Lockheed Martin, the focus will be on whether strong demand continues to translate into improved margins. In Q2, the company reported a 3.2x book-to-bill ratio, a $230 billion backlog and an operating margin of 10.8%.

Individual bonds

If you like these companies but don’t necessarily want to take on equity valuation and share-price risk, Saxo provides access to their corporate bonds. Time horizon and duration are important considerations, as longer-dated bonds are more sensitive to changes in interest rates and therefore tend to experience greater price volatility when yields move.

If you remain positive on the companies’ ability to convert their strong backlogs into cash flow, their bonds offer another way to gain exposure. Buying a bond at the yields shown below can lock in its current yield to maturity if held to maturity, assuming the issuer does not default. These corporate bonds also offer a yield premium over comparable US Treasuries to compensate investors for additional credit and liquidity risk.

Company	Maturity date	Mid-yield to maturity	Coupon	Credit rating	US Treasury yield
RTX	27 February 2053	6.25%	5.375%	BBB	30-year: 5.428%
Northrop Grumman	15 January 2028	4.87%	3.25%	BBB	2-year: 4.765%
Northrop Grumman	1 May 2040	6.03%	5.15%	BBB	20-year: 5.483%
Northrop Grumman	1 May 2050	6.26%	5.25%	BBB	30-year: 5.428%
Lockheed Martin	15 June 2030	5.31%	1.85%	A	5-year: 4.92%
Lockheed Martin	15 November 2063	6.23%	5.90%	A	–

ETFs

Investors looking for broader defence exposure can consider the ETFs below. One provides global diversification with a large weighting towards US defence companies, while the other provides concentrated exposure to the European defence industry.

ETF

How does the defence business work?

Defence primes sell to governments under multi-year contracts, so revenue can be more predictable than in many other industrial sectors. Four mechanics help drive revenue and profitability:

Backlog and book-to-bill: Backlog is work the company has already won but has not yet completed. Book-to-bill shows whether new orders are coming in faster than sales are being delivered. A ratio above 1.0x means new orders exceed current sales.
Contract type: With cost-plus contracts, the customer generally covers additional eligible costs. With fixed-price contracts, the company bears more of the risk if costs are higher than expected, which is where significant programme losses can arise.
Competitive edge: Once equipment is integrated into a defence platform, replacing the supplier can require costly redesign, integration, testing and certification.
Service: After equipment is delivered, companies can continue generating revenue from maintenance and upgrades for many years, often at higher margins than those earned from building the original equipment.

Victoria Ramirez

Investment Strategist

Saxo Bank

Markets are on tilt. Why is SpaceX suddenly reporting today?

Tue, 20 Oct 2026 11:48:00 Z

Plenty to worry about here from all angles.

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

Links

Bloomberg covers what needs to happen to get French yields under control, which mostly boils down to cutting the transfer payments to old people. At least they might be less likely to riot and set things on fire? Here's an excellent take on the why of the French riots, with a hat-tip to Izabella Kaminska for the link.
Business Insider reports on Amazon's racks of AI servers not able to connect to the grid.

Questions and comments, please!

Saxo Market Call

Saxo Bank

Topics: Podcast Highlighted articles Forex

The front end drains, the tails do not - Options Brief - 20 October 2026

Tue, 20 Oct 2026 11:30:00 Z

Index volatility gave back Friday’s spike in a single session, almost all of it at the very front of the curve. The tails did not follow and correlation barely moved. Something only half unwound.

Index volatility gave back Friday’s spike at the front of the curve, and almost nowhere else.

MARKET REGIME: NEUTRAL / CHOP | VIX 18.44 | TERM STRUCTURE: CONTANGO | SKEW: ELEVATED (161.86) | FRONT-MONTH VIX FUTURES: 18.670

Today in brief

The short version. The one-day volatility gauge more than halved, while the one-year measure, skew and implied correlation stayed near the top of their ranges. Hedging demand did not unwind.

Markets. Semiconductors ended an eight-session losing streak, their longest since 2008. The S&P 500 rose 0.41% to 7,690.73 and the Nasdaq 100 1.17%. In our view few stocks took part: the equal-weighted S&P fell 0.34%. Europe went the other way. The Stoxx 600 lost 0.80% with banks leading, and French political unrest pushed the German-French ten-year spread to 148 basis points, a fourteen-year high. This morning the Kospi is down 3.73%, Brent is near 110 and the US ten-year yield is at 5.13%.

Volatility curve. VIX1D fell 48.73% to 11.93, back under the VIX at 18.44, which ends Friday’s inversion. The one-year eased only to 22.30 and is still at the top of its sixty-session range. The October VIX future settles tomorrow.

Single names. The median US implied-volatility rank fell to 45.2 from 49.2, but median implied volatility barely moved. The index gauge dropped 7.75% while the typical name eased under half a percent, so the move was in correlation. In Europe the median rank rose to 48.3 from 43.5.

Flow. Most of it was structure (rolls, paired legs, collars) and gives no read on direction. The one consistent strand was hedging: puts were bought in defensive sector funds and in semiconductor funds.

This week’s range. One session in, the S&P 500 has used 26% of the 1.56% move priced for the week, roughly in line with the time gone. The VIX used 63% of its range, by falling. The band ends on 23 October, before the 28 October Fed decision.

Earnings and catalysts. Netflix reports tonight with the widest premium against its own history: 9.5% priced against a 7.1% eight-report average. Tesla is the opposite at 5.5% against 7.8%. It reports tomorrow with Meta, SAP, IBM and Texas Instruments. US housing starts at 14:30 CET are the main US release.

Looking back: Goldman Sachs. Ahead of the 13 October bank results, options priced Goldman between about 846 and 929 by expiry. The shares touched 931 on results morning and closed at 881.26. The priced range is about where the shares close, not the path they take, so it helps to decide before the report what triggers an exit: a touch of the strike, or a close beyond it.

What it adds up to. Today’s expiry prices 0.55%, the week’s 1.21%. In our view the front end has stopped paying for a session that never came. The VIX at 18.44 against realised volatility of 8.81% leaves a nine-point gap that the back of the curve has not closed.

That is the whole brief in one read. The sections below hold the detail behind each paragraph, with the charts, the full set of readings and the sources, for when you want to go deeper on one part.

Headline driver

Semiconductors ended an eight-session losing streak, the longest since 2008, after the sector had shed around 2.3 trillion dollars in market value. The Philadelphia semiconductor index rose 1.6% and Amazon 4.98% after a brokerage named it a top pick.

Europe went the other way. The Stoxx Europe 600 fell 0.80%, the DAX 1.18% and the CAC 40 1.11%, banks leading the losses, and French political unrest pushed the German-French ten-year spread to 148 basis points, its highest daily close in fourteen years.

In our view the rebound was narrow rather than broad. The equal-weighted S&P 500 fell 0.34% on a day the index rose 0.41%, so the recovery was carried by the same few names that had led the fall.

Market snapshot

Levels are as of the 06:00 CET snapshot on 20 October 2026. US and European figures are the Monday 19 October close, Asian figures Tuesday’s session.

US (Monday 19 October close): S&P 500 7,690.73, up 0.41%. Nasdaq 100 29,529.34, up 1.17%. Dow 51,971.19, down 0.07%. The equal-weighted S&P fell 0.34% while the Russell 2000 fund rose 0.31%. Amazon gained 4.98%, Tesla 3.76% and Nvidia 1.38%; Meta fell 0.55%. Semiconductors rose 1.61% and technology 1.36%, utilities lost 2.01%.
Europe (Monday 19 October close): Stoxx Europe 600 down 0.80% to 639.57, the DAX 1.18% to 25,319.77 and the Euro Stoxx 50 0.96%. Euro-zone banks fell 2.07%, the weakest line on the board.
Asia (Tuesday session): the Kospi is down 3.73%, Samsung Electronics and SK Hynix still weighing. Hong Kong has reopened after Monday’s Chung Yeung holiday and trades about 1% lower.
Commodities and rates: Brent trades near 110 after Monday’s rebound towards a five-month high on tightening control of the Strait of Hormuz. Spot gold is little changed near 4,135, down 0.6% on Monday. The ten-year Treasury yield rose nearly seven basis points to 5.14% and reads 5.127% now, the two-year 4.763%.
Market regime: Neutral and choppy. VIX 18.44, 20-day realised volatility 8.81% and stable, the index 0.19% below its 50-day average.

Past performance is not indicative of future results. Source: Saxo, Bloomberg, CBOE.

Volatility surface

The cash curve against the previous session, over each tenor’s 60-session range, with the one-session change across every measure on the board. Source: Saxo, Bloomberg, CBOE.

The curve unwound its inversion in one session and did it from one end. VIX1D fell 11.34 points to 11.93 and the nine-day measure 2.19 to 17.93, both back under the thirty-day 18.44, while the one-year gave up 0.31 to 22.30. The one-year sits at the top of its sixty-session range and the one-day in the lower part of its own.

Ratios. VIX1D/VIX reads 0.65 against 1.16 a session ago, the inversion closing in one number. VIX3M/VIX rose to 1.06 from 1.03 as the front fell away from the back. VXN/VIX is 1.39 against 1.36, the Nasdaq gauge at 25.56.

VIX futures. The October contract reads 18.670 against spot at 18.44 and November 18.750, a front-month ratio of 0.995. The 21 October option expiry gives a parity forward of 18.225, consistent to 0.11 across the five nearest strikes on indicative pre-open quotes, a discount to spot of 0.215 against 0.12 a session ago. That contract settles tomorrow against a thirty-day window containing the 3 November midterm elections.

Rates and correlation. The bond gauge was the only measure on the board to rise, up 0.20% to 101.31. Oil volatility eased 1.02% to 50.22, still 2.72 times the equity gauge, and gold volatility 1.55% to 22.23. Three-month implied correlation fell 2.29% to 13.66, dispersion 0.30% to 36.50.

Single-name volatility

Saxo’s one-year implied-volatility ranks, read at Monday’s close across 187 US names, show the distribution sliding back down after Friday pushed it up.

The rank gave back most of Friday’s move. On an identical set of names, the median rank fell to 45.2 from 49.2 while the median implied volatility moved only from 33.70% to 33.55%. The rise came without a rise in what the names cost, and so did the fall.
Both ends reversed. Names above rank 70 fell from 19.8% of the set to 15.0%, and names below 20 rose from 10.2% to 11.2%. That is Friday’s slide up running backwards.
The index moved more than its parts, again. Index implied volatility fell 7.75%. The typical single name eased by 0.15 of a volatility point, under half a percent, so almost all of the index move sits in the correlation term.
Europe went the other way. Across 337 names on an identical set the median rank rose to 48.3 from 43.5 and the median implied volatility to 33.62% from 32.13%, with names above rank 70 up from 15.1% to 20.8%. That fits a session when European equities fell and banks led the losses.

Past performance is not indicative of future results. Source: Saxo.

Options flow sentiment

Based on end-of-day 19 October, yesterday’s positioning, not today’s price action.

Nine of the ten reports read as structure rather than conviction: rolls, paired legs, collars and mid-market prints, several carrying a conviction label of two out of five. Treat the session as unreadable on direction.

One strand is worth naming. Protection was bought rather than sold in the defensive sector funds, every ask-side print in the risk-off file was a put, and the staples fund was the most one-sided name in the set. Semiconductor fund flow was puts only and reads as hedging. Against that, upside in the long-dated Treasury fund was sold across several expiries. Hedging demand did not unwind with the front end.

Where the week's range sits

The range the option market priced for this week around Friday 16 October’s close, with the nearest listed strike at each bound. One session has traded, so the marker sits on Monday’s close. Straddles are read from the Saxo chain at Friday’s close and centred on put-call parity. Illustrative only, not a trade recommendation. Source: Saxo, Bloomberg, CBOE.

One session in, the S&P 500 has used 26% of the 119.13 points, 1.56%, priced around Friday’s close, against one of five sessions gone. It is spending its range at about the rate the option market allowed for.

The outlier is the volatility index, which used 63% of its priced week in one session, and did so by falling. The Nasdaq 100 fund has used 47%, gold 30%, energy 21% and the bitcoin fund 9%.

The 23 October expiry stops before the 28 October Federal Reserve decision, so none of the band pays for it. The VIX row uses the 21 October expiry, covering today and tomorrow.

Options carry a high risk of rapid loss and are not suitable for every investor. Costs and charges apply and vary by account and venue; check the rates applicable to you before entering any position.

Today's catalysts

UK labour market data at 08:00 CET and the German ZEW survey at 11:00, the European releases of note.
US housing starts and building permits at 14:30 CET, with weekly ADP employment at 14:15. They follow builder sentiment falling to 29 in October from 32, its lowest since June 2012, with price cuts now running at 43% of builders.
The Federal Reserve is in blackout before the 28 October decision.
Earnings today: Netflix after the US cash close at 22:00 CET, with GE Aerospace, General Motors, RTX, 3M, Intuitive Surgical, Capital One and United Airlines during the session.
Tomorrow: Meta, Tesla, SAP, IBM and Texas Instruments.

Earnings scorecard

Option-implied expected move for each report day against the average move after the last eight reports, as of 20 October 2026. Illustrative only, not a trade recommendation. Source: Saxo, Bloomberg, CBOE.

Netflix carries the widest premium against its own history and reports tonight. It prices 9.5% against a 7.1% eight-report average, 1.3x, up 0.6 points on the session. Alphabet is next at 4.9% against 4.1%.
Rank and event premium answer different questions. Netflix carries an implied-volatility rank of 94 and the board’s highest expected move. Tesla carries 35 and prices 5.5% against a 7.8% average, 0.7x, reporting tomorrow.

What the options market taught us: Goldman Sachs

Before the US banks reported on 13 October, we looked at what options were pricing for Goldman Sachs and Wells Fargo. Goldman Sachs had the more useful lesson, and it came on results morning.

Goldman Sachs daily range and close from 7 to 16 October 2026, against the range options priced for the 16 October expiry, and the results-day open, high, low and close against the previous close. Past performance is not indicative of future results. For education only. Source: Saxo price data, author calculation.

The priced range: options priced Goldman Sachs between roughly 846 and 929 by the 16 October expiry.
Results morning: the shares opened 3.5% higher and reached 931, just above that range.
Expiry: the shares closed at 881.26, well inside it.

The priced range measures where the shares close at expiry, not where they trade along the way. An option sold at the 930 strike was briefly in the money that morning and out of the money again by the close. So it helps to decide before the report what triggers an exit: a touch of the strike, or a close beyond it.

Next up: Meta, SAP and Tesla on 21 October, Nestle and Roche on 22.

Options carry a high risk of rapid loss and are not suitable for every investor. Costs and charges apply and vary by account and venue; check the rates applicable to you before entering any position.

What the market is pricing

Session implied range: today’s expiry prices 42.1 index points, 0.55%, against 61.5 points and 0.80% on Monday.
Event implied range: the 23 October expiry prices 92.9 points, 1.21%, against 118.3 a session ago with five sessions to run and four now. Decay alone leaves about 106, so roughly 13 points came out beyond the clock, the mirror of Monday’s 27 going in.
Correlation read: implied correlation fell 2.29% to 13.66 while the index gauge fell 7.75%, so the index gave back more than the input that drove it up. Correlation sits near the top of its stored range.
Tail risk signal: SKEW fell 3.99% to 161.86 and the tail-risk gauge 16.94% to 20.32. Far downside is cheaper than Friday, dearer than any stored session before last week.

In our view the question is what the front end had been paying for. VIX1D at 23.27 on Friday priced a session that did not arrive, and at 11.93 it is back to early-October levels, into an evening carrying the board’s widest single-name event premium. Index volatility at 18.44 against 20-day realised volatility of 8.81% leaves a nine-point gap the back of the curve has not closed.

Related articles/content
Correlation returns the index follows - Options Brief - 19 October 2026 Correlation falls the index stays quiet - Options Brief - 16 October 2026 Market Quick Take - Korea slides as Brent holds near 110 - 20 October 2026 Market Quick Take - Chipmakers extend their slide as Brent holds above 107 - 19 October 2026

More from the author
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Koen Hoorelbeke

Investment and Options Strategist

Saxo Bank

Meta and Tesla earnings preview: two very different businesses, one AI dream

Tue, 20 Oct 2026 09:00:00 Z

Key takeaways

Meta's advertising business funds its AI ambitions, but rising costs are testing its profitability.
Tesla's robotaxis and robotics offer new growth opportunities, while its car business faces pressure and spending accelerates.
Both earnings reports will test whether ambitious AI investments can eventually translate into sustainable profits.

Meta recently launched an artificial intelligence (AI) assistant that can organise your life. Tesla unveiled a Roadster that can leap into the air. Very different products, but surprisingly similar investment stories.

On 21 October, both companies report third-quarter earnings as investors increasingly question the enormous sums being spent on AI.

Meta wants AI to transform how billions interact with technology. Tesla wants it to transform transportation and robotics. Both have ambitious plans, but the question is shifting from what AI can do to what it can earn.

Meta: advertising pays the bills, AI promises the future

Meta, the company behind Facebook, Instagram and WhatsApp, has an important advantage: a highly profitable advertising business and billions of potential customers.

Its ambitions now extend well beyond advertising.

In September, Meta launched Muse, an AI assistant capable of handling everyday tasks, including managing schedules and booking travel. More recently, it introduced Muse Wonder, a more advanced AI model, alongside new smart glasses and an enterprise platform for businesses.

These launches could create new revenue streams through subscriptions, business services and connected devices. Meta can also introduce them to its enormous existing user base.

Meanwhile, AI is already improving advertising performance, helping Meta's traditional business grow.

But there is a catch: the costs are growing even faster.

Second-quarter revenue increased 28% to 60.8 billion USD, while expenses rose 55%. Operating margins fell from 43% to 31%, and free cash flow, the money remaining after operating and investment costs, dropped to 784 million USD.

With capital expenditure expected to reach 130 billion USD to 145 billion USD in 2026, investors will closely examine advertising growth, spending guidance for 2027 and early signs of Muse adoption.

Meta's opportunity is to build new businesses on top of an already profitable one. The challenge is ensuring the new ambitions do not consume too much of the old business's profits.

Tesla: cars today, robots tomorrow

Tesla faces almost the opposite challenge.

The electric-vehicle maker increasingly wants to become an AI and robotics company, with robotaxis, humanoid robots and energy storage playing bigger roles.

Its recent Roadster unveiling demonstrated impressive engineering, but the more important developments concern Cybercab, Tesla's purpose-built autonomous taxi, and Optimus, its humanoid robot.

Both could eventually open substantial markets. However, moving from demonstrations to large-scale commercial operations remains a major challenge.

Meanwhile, Tesla's existing car business faces growing competition and pressure on profitability.

Third-quarter deliveries reached approximately 487,000 vehicles, exceeding expectations despite falling around 2% from a year earlier. The critical question is whether Tesla can protect margins, particularly without relying on regulatory credits earned by selling emissions allowances.

Energy storage offers another opportunity. Tesla deployed 13.7 gigawatt-hours of batteries during the quarter, supporting an already established business that benefits from growing electricity demand.

Still, the investment bill is substantial. According to analyst estimates compiled by Bloomberg, Tesla’s capital expenditure is expected to exceed 25 billion USD in 2026, putting pressure on cash generation.

Unlike Meta, which is mainly using AI to strengthen an existing business, Tesla is investing partly to become a different company altogether.

Source: Saxo Bank analysis. Illustrative business model comparison, future revenue opportunities are not guaranteed.

Risks: when ambition meets reality

For Meta, the main risks are rising infrastructure costs, fierce AI competition and privacy concerns surrounding personal assistants.

Tesla faces execution delays, regulatory hurdles for autonomous driving and competition in electric vehicles. Both also face valuation risk if investors have already priced in years of future success.

The warning sign is similar: spending continues rising without corresponding improvements in profitability or commercial progress.

Investor playbook

Follow the money: compare revenue growth with expenses, profit margins and free cash flow.
Separate products from profits: new launches matter more when customers start paying for them.
Watch the next spending cycle: higher 2027 investment guidance could change expectations for future returns.
Consider valuations: even strong results can disappoint when share prices already reflect ambitious expectations.

Big dreams still need profitable businesses

Meta and Tesla are chasing the same AI future from very different starting points. Meta relies on advertising profits to fund new products, while Tesla aims to move beyond cars into robotics and autonomous driving.

Wednesday's earnings will offer clues about whether those ambitions are translating into stronger businesses. After all, Tesla's Roadster may leap into the air, and Meta's Muse may organise our lives. But for investors, what matters is where the profits land.

Ruben Dalfovo

Investment Strategist

Saxo Bank

Topics: Equities Highlighted articles UKMustRead Artificial Intelligence Theme - Artificial intelligence Tesla Motors Tesla Inc. Meta Platforms Inc. Quarterly earnings

SpaceX Q3 earnings preview: What to watch from AI to Starlink

Tue, 20 Oct 2026 08:05:00 Z

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

SpaceX reports earnings after the close on Tuesday, 20 October. Here’s what to look out for.

There was relatively short notice on the earnings release date, which suggests maybe management wishes to get updated financials out of the way before further financing rounds and give the market a bit of grace to absorb the 1.3bn shares of lockup releases coming two days after earnings, plus the other 329mn on 24/10 and the rest of the 857mn shares of the 180-day group after.

The earnings update will be largely about AI rather than rockets. SpaceX is expected to report third-quarter revenue of $12.74 billion, up sequentially from $7.8bn in Q2, which was +92% YoY, and be profitable at ~14 cents earnings per share, vs the loss of 9 cents in Q2.

Profit and positive commentary

The net loss narrowed by almost 50% to $541 million from $1.0 billion and signs of improving profitability are expected to be reflected by positive commentary from management. There has also been positive recent progressfrom the Starship launch and spectrum purchases. SpaceX said earlier this month it had agreed to purchaseUS mobile spectrum to further its Starlink mobile network ambitions, whilst in late September its 14th Starship launch marked the vehicle's first-ever orbital flight test and first operational payload delivery. Also expect some buzz around a potential Tesla merger to help underpin sentiment.

Launch is another area to look forward and expected positive commentary around the timings for the Starship mission 15, perhaps taking place in early November, and Starship 16 by the end of the year. The operational questions are Starship reliability, reuse, development spending and the timetable for expanding commercial capacity. Launch milestones are important.

AI contracted & recognised revenues

As for the key financials look to the AI unit, now called SpaceXSI, which posted an operating loss of $1.26bn last quarter vs estimates from a loss of $2.39bn. AI revenues were up 213% sequentially and 247% year-over-year to $2.6bn in Q2.

The immediate test is how much contracted computing demand becomes recognised revenue—and how profitable that revenue is after depreciation and financing costs. In Q2 SpaceX said it had entered into cloud agreements totaling $14.1 billion in contracted sales to provide customers with access to compute capacity, which resulted in $1.6 billion in incremental AI infrastructure revenues for the quarter.

Capex is the key

The pace of capex will be perhaps the key metric - AI spend jumped to $15.8bn in Q2 from $7.7bn in the prior quarter. At roughly $19bn, expected Q3 quarterly capex would equal about 1.5x expected revenue.

This will be an important tell on the requirement for financing, which remains an overhang for the stock, particularly following the crash for neocloud stocks. Reports indicate SpaceX will tap investors for $40bn in financing to fund purchases of Nvidia chips for its data centres, but the debt issuance is expected to rise to as much as $90bn annually by 2029, according to Morgan Stanley.

The other metric will be annual recurring revenue (ARR) that may include fresh AI compute deals – CFO Bret Johnsen signalled last month that SpaceX would hit $100bn ARR by the end of the year.

Starlink earnings

In Connectivity, which includes Starlink, the Street expects a $1.6bn operating profit and revenues rising to $4.45bn, implying significant slowdown in the 66% YoY growth pace in Q2. Starlink remains the key earnings driver. Connectivity revenues were up 32% sequentially and 66% year-over-year to $4.3 billion, driven by strong Starlink subscriber growth. Starlink Subscribers hit 12mn as of the end of Q2 2026, doubling year-over-year and up 1.7 million sequentially.

But Connectivity costs rose almost $1bn and the question is whether subscriber expansion and enterprise demand can offset pricing pressure. It’s hard not to see spectrum purchases as positives and expect positive commentary from management.

Looking beyond the positive momentum around launches, spectrum purchases and a possible Tesla tie-up, the key question for the stock is whether the contracted backlog in AI combined with the Starlink cash generation offer SpaceX the ongoing headroom to keep servicing its mounting debt load. This highlights the importance of the compute buildout. In Q2 it expanded compute capacity to 1.4 GW, up from 1.0 GW in Q1 2026 and 0.4 GW in Q2 2025, so we will pay close attention to commentary on the continued build-out of Colossus II and incremental capacity under construction.

Space

Finally, it’s still a space company: Space revenues grew 55% sequentially and 29% year-over-year to $962 million in Q2 and are expected to rise about 50% to $1.46bn in Q3. I don’t headline Space numbers as material for the stock as much as launch timelines and the success of missions.

Neil Wilson

Investor Content Strategist

Saxo Bank

Roche sales update: buying lower or selling higher, and being paid to wait

Tue, 20 Oct 2026 06:55:00 Z

Roche reports its nine-month sales on 22 October 2026, after a rise of about 9% since July. One investor wants to buy lower, another already owns the shares. How can each name a price and be paid to wait?

Before a company reports, options on its shares tend to cost more than in a quiet week. Whoever sells the option collects that extra.

Roche publishes its nine-month sales on Thursday 22 October 2026 at 07:00 CET, before the Swiss market opens. The shares closed at CHF 380.10, about 9% higher than after the July results (Source: Saxo price data, as of 19 October 2026). In our view, the strong Swiss franc may be the main complication for Roche: sales grew 6% in the first half, but fell 2% once converted into francs (Source: Roche half-year release, 23 July 2026).

Roche reports are rarely dramatic. Over the last eight, the shares typically moved about 2.2% on the day, and seven of the eight days were up. The one fall, 3.2%, came after the nine-month sales in October 2025 (Source: Saxo price data; Roche releases). Past performance is not indicative of future results.

Roche, with the 355 and 400 strike prices and the 20 November 2026 expiry marked. Illustrative and educational, not predictive. Past performance is not indicative of future results. Source: SaxoTrader, indicative prices, as of 19 October 2026.

A sales update, not full results

Roche publishes sales only on 22 October, without profit figures. Yet the last four sales updates moved the shares about as much as the last four full results, around 2.6% to 2.7% on average (Source: Saxo price data; Roche releases). Past performance is not indicative of future results.

Roche share price move from the previous close to the close on release day, last eight releases, against the range priced by the 20 November 2026 options (indicative Saxo quotes as of 19 October 2026). Those options run four more weeks after the report, so the band is not a one-day estimate. Past performance is not indicative of future results; figures are illustrative and not predictive. Source: Saxo price data, Roche releases, Saxo option quotes, author calculation.

What the options market expects

Option prices give a rough idea of how far the market thinks a share could move. Add the price of the call and the put with a strike closest to today’s share price. For 20 November, that points to a move of about 5.7% either way, or roughly CHF 353 to CHF 397 around the CHF 375 strike (call CHF 12.80 plus put CHF 8.75 makes about CHF 21.55, on a share price of CHF 380.10. Source: Saxo, indicative prices, as of 19 October 2026).

These options run four weeks past the report, so the 5.7% covers the report and a month of normal ups and downs, which is why it is bigger than the 2.2% typical reaction.

What happens to the option price after the report

Part of an option’s price pays for uncertainty, including the report. Once the numbers are out, that payment usually shrinks, even if the shares hardly move. Traders call this IV crush. With Roche, the report is only one day in a four-week option, so in our view the drop after 22 October may be small. A seller may not see a quick gain. Options carry a high risk of rapid loss and are not suitable for every investor.

Why the 20 November expiry

The examples use the monthly Roche options on Eurex, the European options exchange, expiring Friday 20 November 2026. Each contract covers 100 shares, priced in Swiss francs. December options add a month of risk, including a US decision on Roche’s breast cancer drug candidate giredestrant, due by 30 November (Source: Roche, 2 June 2026). One cost: the gap between the buying and selling price is about a quarter to nearly a third of the option’s price, and only 26 contracts were open at the 355 put, a sign it may be hard to trade (Source: Saxo, as of 19 October 2026).

For the investor who wants to buy Roche lower: a cash-secured put at 355

The idea: Roche is worth owning, but after the rise since July, this investor would rather buy a little lower. The seller of the put agrees to buy 100 shares at CHF 355 if Roche is below that price on 20 November. In return, the seller receives a payment today, called the premium. "Cash-secured" means the money to buy the shares is set aside.

Hypothetical, for education only. Not advice or a trade recommendation.

Example structure (illustrative only - not a trade recommendation)

Sell 1 Roche 20 November 2026 355 put at about CHF 2.94 per share (bid 2.52, ask 3.36), with Roche at CHF 380.10
Net credit: about CHF 294, all from the one put (CHF 2.94 on 100 shares), against CHF 35,500 of cash set aside
Break-even at expiry: CHF 352.06, the strike less the premium, about 7.4% below the price at the time
Maximum profit: CHF 294 (hypothetical), if Roche is at or above 355 at expiry
Maximum risk: CHF 35,206 (hypothetical), if Roche fell to zero
(Source: Saxo, indicative prices, as of 19 October 2026)

Why 355: it sits just inside the lower edge of the range the market expects for the month. None of the last eight reactions would have taken Roche that low in one day, but the month after the report counts too.

Risk: CHF 294 is the most the seller can earn. If Roche ends below CHF 352.06, the seller loses money, as a shareholder would. Options carry a high risk of rapid loss and are not suitable for every investor. Costs and charges apply to each leg and vary by account and venue; check the applicable rates before entering any position.

The 355 put in the SaxoTrader trade ticket, with the platform’s risk graph, max risk, max profit and break-even. Hypothetical, for education only. Past performance is not indicative of future results; figures are illustrative and not predictive. Source: SaxoTrader, as of 19 October 2026.

For the investor who already holds Roche: a covered call at 400

The idea: this investor owns Roche and would be happy to sell at CHF 400, about 5% higher. The seller of the call agrees to sell 100 shares at CHF 400 if Roche is above that price on 20 November, and receives a premium today. "Covered" means the seller already owns the shares.

Hypothetical, for education only. Not advice or a trade recommendation.

Example structure (illustrative only - not a trade recommendation)

Own 100 Roche shares; Sell 1 Roche 20 November 2026 400 call at about CHF 3.14 per share (bid 2.76, ask 3.52), with Roche at CHF 380.10
Net credit: about CHF 314, all from the one call (CHF 3.14 on 100 shares), around 0.8% of the CHF 38,010 share value
Break-even at expiry: CHF 376.96, the share price less the premium
Maximum profit: about CHF 2,304 (hypothetical) on shares and call together, if Roche is at or above 400 at expiry
Maximum risk: CHF 37,696 (hypothetical), the share value less the premium, if Roche fell to zero
(Source: Saxo, indicative prices, as of 19 October 2026)

Why 400: it sits just above the range the market expects for the month. Even the largest recent reaction, a 5.1% rise in July 2026, fell short of it. That is also why the premium is small.

Risk: the investor retains the full downside risk of holding the shares. The premium received provides a partial offset, but it does not protect against a significant decline in the stock price. A repeat of the 3.2% fall in October 2025 would cost about CHF 1,200 on 100 shares at today’s price, against CHF 314 received. Options carry a high risk of rapid loss and are not suitable for every investor. Costs and charges apply to each leg and vary by account and venue; check the applicable rates before entering any position.

The 400 call in the SaxoTrader trade ticket. The ticket shows the call on its own, which is why it reports unlimited risk: that applies only to a call sold without the shares. Held against 100 Roche shares, a rise above 400 is covered by the shares, and the remaining risk is a fall in the share price. Hypothetical, for education only. Past performance is not indicative of future results; figures are illustrative and not predictive. Source: SaxoTrader, as of 19 October 2026.

And if neither view fits

Both examples assume the investor wants to own Roche. Another investor may think a good quarter is already in the share price. In our view, the put may not suit that investor: CHF 294 is little comfort when buying a share that keeps falling. A holder with that view may prefer to sell some shares, or buy a put as protection, which costs money instead.

A holder who expects a strong quarter gives part of that rise away with the covered call. And doing nothing is always an option.

Worth checking before a trade:

The gap between the buying and selling price
How many contracts are open at that strike
The report timing: 07:00 CET on 22 October 2026
Commission, charged per contract
An exit plan, decided before the report

Assignment risk note: Roche options can be exercised on any day before expiry, so a seller may have to buy or sell the shares early if the share price passes the strike. Only the seller of an option faces this.

Final thoughts

The two examples are one idea seen from both sides: the put seller names a lower price to buy at, the call seller a higher one to sell at, and both are paid for the coming month’s uncertainty. Either position can be closed early if the view changes.

Neither removes the risk of a bigger move than Roche’s history suggests. In our view, selling an option before this report may suit only an investor comfortable owning Roche after a bad day and a weak month. Options carry a high risk of rapid loss and are not suitable for every investor.

Related articles/content
SAP earnings buying lower or selling higher and being paid to wait \| 16 Oct 2026 TLT naming your price on long-term bonds and being paid to wait \| 29 Sep 2026 AMD after a ten percent day taking something off the table without selling the shares \| 22 Sep 2026 Finding unusually expensive or cheap options in the Saxo screener \| 18 Sep 2026 What IV crush really means in practice reviewed version \| 9 April 2026 Trading earnings with defined \| 31 Mar 2026 -- Front end reprices long end holds - Options Brief - 15 October 2026 Sectors pull apart the index holds - Options Brief - 14 October 2026

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SAP earnings buying lower or selling higher and being paid to wait | 16 Oct 2026
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Finding unusually expensive or cheap options in the Saxo screener | 18 Sep 2026

What IV crush really means in practice reviewed version | 9 April 2026
Trading earnings with defined | 31 Mar 2026
--
Front end reprices long end holds - Options Brief - 15 October 2026
Sectors pull apart the index holds - Options Brief - 14 October 2026

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Koen Hoorelbeke's articles on Saxo Follow and interact with me on X (Twitter) for more intraday content

Koen Hoorelbeke

Investment and Options Strategist

Saxo Bank

Topics: Options Thought Starters Highlighted articles Theme - Crypto and blockchain ESMA Products NOT Mentioned

London Quick Take - 5 Things to Know in Markets Today - 20 Oct

Tue, 20 Oct 2026 06:30:00 Z

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

5 things to know in markets today

1.Pound rallies on stronger-than-expected labour market data

Sterling rallied after official figures showed the jobless rate fell and wage growth was stronger than expected last month, pointing to a surprising resilience in the UK labour market. The jobless rate fell to 4.7% from 4.9% from the month before, and average earnings rose 3.7% from 3.6%. Both had been expected to remain steady. Market odds for a rate hike by the Bank of England shortened as the data a) builds on the better-than-expected GDP data showing the economy is doing actually ok; b) the labour market, which was the chief reason to hold off raising rates despite building inflation, is doing better than we thought; and c) because wage data indicates we may be starting to see second-order effects from prolonged higher energy prices.

The data has somewhat surprised sterling shorts and we are seeing something of a short-covering rally in cable, with GBPUSD north of 1.3358, near its best in a month. The euro has also advanced against the dollar as USD gets offered, DXY testing 20-day SMA support around 101.60.

2.Risk sentiment remains pressured

Despite a bounce in US tech the follow-through to Asia has been weak and Europe remains exposed to French worries. The FTSE 100 slipped around 0.5%, extending the decline of more than 1% notched on Monday as miners and banks led a retracement of last week’s counter-trend rally. Anglo American led early gainers on Tuesday after this morning’s production report eased some concerns following a 4% decline Monday, though banks and miners remain generally under pressure. Bunzl led the fallers early doors after reporting underlying revenue growth at +3.7% and stuck to its upgraded full-year guidance from the half-year report.

3.Unrest underscores France's Fiscal Fragility

French unrest continues to be a factor weighing on sentiment and particularly on European equities, with the main bourses coming off some bruising losses on Monday with further declines early on Tuesday. The Stoxx 600 fell around 0.8% and France’s CAC 40 lost 1.1% and is down another -0.5% this morning, while the DAX is down almost -1% today and Euro Stoxx 50 -1% lower on ASML, the largest weighting, down more than 3% after Asian tech slid overnight. Unrest has magnified existing concerns about additional government spending and the difficulty of repairing France’s finances. Whether France is heading to some kind of fiscal crisis or not, investors are demanding a premium to own French debt. The Franco–German 10-year yield spread widened to about 148bps, levels last seen during the eurozone debt crisis. French presidential election risks will keep this one on the radar for a long time and the 10yr OAT yield has risen a couple more bps in early trade to 4.925%.

4.US tech bounces

Tech found buyers yesterday on Wall Street, but breadth remained poor. Nvidia gained 1.4%, while most stocks outside technology and AI fell. Semis snapped an 8-day losing streak to rally 1.6%. CoreWeave illustrated the fragility however: an early gain above 7% evaporated, leaving it down 0.4%. Goldman Sachs upgraded CoreWeave to a buy from hold, with a $106 price target, saying that "contract economics are likely to be more positive than the market expects”. MoffettNathanson agreed the stock is “not circling the drain” but did slash its price target to $89 from $107. Investors remain tentative about neoclouds after the selloff.

It looked more like a tentative recovery in some corners of tech after heavy selling than renewed strong conviction in the AI trade. The Nasdaq gained 1.1% with a big help from a 5% pop for Amazon after Morgan Stanley named the stock its top pick and set a price target of $350, implying about 40% upside. Morgan Stanley also went to $820 from $775 on Meta ahead of earnings this week and kept its buy rating. With pressure on healthcare, energy, financials and industrials the broader S&P 500 rose a more modest 0.4% and the Dow Jones ended marginally lower.

And that fragility was betrayed overnight in Asia with the Kospi heading down almost 4% with market dominants SK Hynix down –4% and Samsung Electronics –3%. Tokyo and Hong Kong were both down more than 1%. Bonds offered little relief although we are well off the cycle highs for yields. The US 10-year yield rose to roughly 5.14%, from 5.09% on Friday. Brent settled at $109.55, down 0.3%, after a volatile session but retains a bullish bias this morning back above $110 as of send time.

5.Countdown to SpaceX earnings

SpaceX reports earnings after the close tonight, in what’s becoming an increasingly important component for index-level sentiment around AI. Short notice on the earnings update suggests maybe management wish to get updated financials out of the way before further financing rounds and give the market a bit of grace to absorb the 1.3bn shares of lockup releases coming two days after earnings. Reports indicate SpaceX will tap investors for $40bn in financing to fund purchases of Nvidia chips for its data centres. And the earnings update will be largely about AI rather than rockets. SpaceX is expected to report third-quarter revenue of $12.74 billion, up sequentially from $7.8bn in Q2, which was +92% YoY, and a return to profitability at 14 cents earnings per share, vs the loss of 9 cents in Q2. Look to the AI unit (SpaceXSI) which posted an operating loss of $1.26bn last quarter vs estimates from a loss of $2.39bn. AI revenues were up 213% sequentially and 247% year-over-year to $2.6bn in Q2.

The pace of capex will be an important metric - AI spend jumped to $15.8bn in Q3 from $7.7bn in the prior quarter. This will be an important tell on the requirement for financing, which remains an overhang for the stock, particularly following the crash for neocloud stocks. The other metric will be annual recurring revenue (ARR) that may include fresh AI compute deals – CFO Bret Johnsen signalled last month that SpaceX would hit $100bn ARR by the end of the year. In Connectivity, which includes Starlink, the Street expects a $1.6bn operating profit and revenues rising to $4.45bn, implying big slowdown in the 66% YoY growth pace in Q2. Space revenues grew 55% sequentially and 29% year-over-year to $962 million in Q2.

Netflix is also on deck later today, while Tesla reports tomorrow.

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 - Korea slides as Brent holds near 110 - 20 October 2026

Tue, 20 Oct 2026 06:22:00 Z

Market drivers and catalysts

Macro: US builder sentiment slid to a multi-year low; Fed enters blackout period ahead of 28 October decision
Equities: US equities rebounded on technology gains, Europe declined as banks weighed, Asian markets remained under pressure despite Wall Street's recovery.
Volatility: Volatility gauges unwound sharply with the shortest-dated measures giving back the most
Digital Assets: Listed crypto shares drifted lower while the tokens themselves barely moved at all
Commodities: Energy supply fears lift oil and European gas prices while gold remains rangebound
Fixed Income: Yield rebound with risk sentiment recovery and higher oil prices
Currencies: USD weakens slightly after Monday rise, EUR weak in crosses.

Macro

The NAHB housing market index fell to 29 in October from 32, the lowest reading since June 2012 and below forecasts, with current and expected sales and buyer traffic all weaker. Price cuts spread to 43% of builders, averaging 6%. September housing starts are due today, forecast at 1.30 million against 1.275 million previously.
Middle East supply developments remain a central commodity and macroeconomic input. The US Energy Secretary put Persian Gulf oil flows back at about 80% of pre-war levels, and sanctioned tankers from the roughly 1,600-vessel dark fleet may re-enter legal trade. Iran is reported to be tightening control of the Strait of Hormuz amid attacks on shipping, while Saudi-Houthi and Russia-Ukraine strikes on energy infrastructure have resumed..
The Fed is in blackout before the 28 October decision, with markets pricing a hold while pricing in three 25 basis point rate hikes by next July. National Economic Council Director Kevin Hassett said inflation, once described as under control, now needs some work.

More in our Macro Analysis & Macroeconomic News

Macro calendar highlights (times in GMT)

0600 – UK Aug. Unemployment Rate and Employment Change
0600 – UK Aug. Average Weekly Earnings
0600 – UK Sep. Jobless Claims Change and Claimant Count Rate
0900 – Germany Oct. ZEW Survey
1215 – US Weekly ADP Employment Change (four weeks ending Oct 3)
1230 – US Sep. Housing Starts and Building Permits

Earnings events

Today: Fifth Third Bancorp, Steel Dynamics
Tuesday: GE Aerospace, Netflix, RTX Corporation, ABB Ltd, Intuitive Surgical, Chubb, Capital One, 3M Company, General Motors, Northrop Grumman, United Airlines
Wednesday: Meta, Tesla, Lam Research, Philip Morris, SAP, Thermo Fisher Scientific, Texas Instruments, IBM, Abbott Laboratories, NextEra Energy, AT&T, Iberdrola, Danaher
Thursday: Procter & Gamble, Gilead Sciences, Union Pacific, Western Digital, Valero Energy, Blackstone, Newmont, Lockheed Martin, Spotify, Atlas Copco
Friday: ExxonMobil, American Express, Eni S.p.A, SLB

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

Equities

USA: The S&P 500 rose 0.4%, the Nasdaq 100 gained 1.2%, while the Dow Jones ended flat on Monday as technology and consumer discretionary stocks led a recovery. The Philadelphia Semiconductor Index climbed 1.6%, ending an eight-session losing streak, its longest since 2008, after the sector had lost around $2.3 trillion in market value. Amazon surged 5% after Morgan Stanley named it a top pick, while storage stocks Western Digital and SanDisk gained around 6% as investors returned to technology shares. The rebound offered some relief after last week's sharp selloff, with attention now turning to earnings results for signs of how companies are navigating the current environment.
Europe: European equities declined on Monday, with the Stoxx 600 falling 0.8%, Germany's DAX losing 1.2% and the UK's FTSE 100 dropping 1.1%, as banks led losses and political uncertainty weighed on sentiment. France's CAC 40 also fell 1.1% following weekend unrest, with French equities now trading at their steepest discount to German peers since early 2009. BNP Paribas, Société Générale, HSBC and Crédit Agricole all lost more than 2%, while HSBC declined 2.2% and Norwegian investment company Aker fell 7.1%. Technology was the only sector to finish higher, highlighting the contrast with Wall Street's recovery as investors assessed political risks and the upcoming earnings season.
Asia: Asian equities traded lower on Tuesday despite Wall Street's technology rebound, with the MSCI Asia Pacific index falling 0.3% in early trading as South Korean stocks remained under pressure. Japan's Nikkei 225 opened lower, although mining and energy shares offered some support, while Samsung Electronics and SK Hynix continued to weigh on South Korea's Kospi following last week's semiconductor selloff. Australia's ASX 200 dropped 1.1%, with BHP falling as much as 2.3% after reporting weaker copper production in Chile, while National Australia Bank slipped following plans to cut up to 2,500 jobs. Hong Kong markets were closed for a public holiday, while US technology futures pointed to modest gains.

More in our Equity Trading - Stock Market Analysis & News

Volatility

Index volatility unwound alongside the chip rebound. VIX fell 7.75% to 18.44, the nine-day measure 10.88% to 17.93 and the one-day measure 48.73% to 11.93, leaving the front below spot. VVIX eased 2.71% to 106.93, the Nasdaq gauge 5.79% to 25.56 and SKEW 3.99% to 161.86. The curve holds contango from 19.60 at three months to 22.30 at one year, extending a streak past 130 sessions.
Rates volatility was little changed, MOVE at 101.31. SPX options imply 42.1 points, 0.55%, for today's expiry and 92.9 points, 1.21%, into 23 October. Tomorrow's October VX settlement measures a window containing Election Day on 3 November.

More in our Options Trading - Stock Market Analysis & News

Digital Assets

BITCOIN ~81,995 +0.09% | ETHEREUM ~2,413 +0.28% | IBIT 46.30 +0.33% | ETHA 54.11 -0.73% | AS OF ~06:00 CET

Bitcoin trades at $81,636 to $82,125 depending on venue, holding above the $80,427 low as daily Bollinger Band width sits at its tightest in two and a half years. Ethereum is at $2,396 to $2,431, down about 5% on the week from $2,562. US spot bitcoin ETFs have seen $539.8m of outflows this month, but the flows are concentrated: IBIT's $65.4m exit on 12 October was the entire category's outflow that day.
Listed crypto shares drifted lower while the tokens barely moved. Coinbase fell 2.72% and Strategy 0.59%. Miners were mixed, with Marathon down 2.06%, Riot up 1.82% and IREN up 2.74%, after double-digit falls on Friday. Token volatility was little changed, with DVOL at 37.38.

Commodities

Oil: Brent trades near USD 110 after rebounding on Monday towards a five-month high, supported by tightening Iranian control over the Strait of Hormuz. This has raised concerns about renewed disruptions to Middle East oil flows and a further reduction in refined-product supplies, with diesel holding near USD 200 per barrel. Meanwhile, the Trump administration is authorising the sale of sanctioned oil tankers, allowing them to resume legitimate crude shipments.
Metals: Gold trades little changed around USD 4,135 after falling 0.6% on Monday as rising energy prices pushed bond yields higher. Overall, bullion remains confined to a relatively narrow range with key resistance located around USD 4,230 and support below US, caught between macroeconomic headwinds and continued demand from investors seeking protection against fiscal and geopolitical risks. Silver trades slightly firmer at USD 57.25, while copper is broadly unchanged at USD 6.56 per pound.
European natural gas extended last week’s advance, with benchmark futures reaching their highest level since December 2022 near EUR 90 per MWh amid concerns over low storage levels and a fragile winter supply balance. The latest gains followed reports of an LNG tanker coming under fire near Yemen, adding to supply concerns. European inventories are just over 74% full, well below the five-year seasonal average of 89%, while prices have more than doubled from pre-war levels.

More in our Commodity News, Analysis & Commentary

Fixed Income

US Treasury yields rebounded Monday as risk sentiment staged a recovery and oil prices rose to new highs for the cycle, with the benchmark US 2-year treasury yield rising six basis points to 4.77% before easing back slightly in early trading Tuesday. The 10-year benchmark rose nearly seven basis points to 5.14% before easing back below 5.12% in early trading Tuesday.
The Germany-France sovereign yield spread widened sharply Monday and posted its highest daily close since the sovereign debt crisis more than 14 years ago at 148 basis points for the 10-year yield differential. Unrest across France has spooked holders of French debt once again. The spread between 10-year yield Italian BTP’s and Germany Bunds also widened Monday, but at 111 basis points is below the prior high daily close at the beginning of the month of 119 basis points.
US high yield spreads tightened slightly Monday, with the Bloomberg measure of the spread between high yield corporate bonds and US treasuries two basis points tighter at 329 basis points. Friday’s close at 331 basis points was the highest level posted since the end of March, which saw a local cycle high of 335 basis points .

Currencies

The dollar weakened slightly early Tuesday after a slightly firming on Monday, with EURUSD rising back above 1.1230 despite the focus on France’s shaky finances. USDJPY rolled back below 158.20 after closing at 158.50 Monday.
The Euro remains weak against other European currencies, especially sterling as EURGBP hit a new 17-month low just below 0.8400 before bouncing early Tuesday, while EURSEK tested the 11.10 area, which was an important resistance level on its way to the 11.367 high posted earlier this month. High oil and gas prices continue to support NOK, with EURNOK posting a new cycle low below 10.55 Monday before finding support, the lowest level since January 2023.

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

Saxo Bank

Correlation returns, the index follows - Options Brief - 19 October 2026

Mon, 19 Oct 2026 11:30:00 Z

The index fell one per cent on Friday while the equal-weighted version fell four tenths. Index volatility set a sixty-session high anyway, and the typical stock barely moved. Something other than risk repriced.

Index volatility set a sixty-session high; the typical stock did not.

MARKET REGIME: NEUTRAL / CHOP | VIX 19.99 | TERM STRUCTURE: CONTANGO | SKEW: ELEVATED (168.59) | FRONT-MONTH VIX FUTURES: 18.50

Key findings

Correlation did the work, not breadth. Implied correlation rose 16.11% to 13.98, a sixty-session high, while the equal-weighted S&P 500 fell 0.40% against the index’s 1.09%.
The index repriced, its components did not. VIX rose 21.45% to 19.99; median one-year implied volatility across an identical set of 187 US names moved from 33.38% to 33.70%.
Seven measures set sixty-session highs, all index-level. The bond, gold and oil gauges did not.
Widest earnings premium against own history: UBS 2.0x, Apple 0.6x.

Headline driver

Chipmakers recorded their longest losing streak since 2008 as investors questioned the scale and the financing of artificial-intelligence infrastructure spending, capping Wall Street’s worst week in months. The Nasdaq 100 fell 2.50%, the S&P 500 1.09% and the Dow 0.34%.

Two macro releases cut the other way. Federal Reserve Chair Warsh said hotter inflation had not changed his outlook, which was read as reducing the odds of an increase on 28 October. September industrial production rose 0.7% on the month against 0.4% expected, the most in five months, with capacity utilisation at 76.9%.

In our view the session was not a growth scare but a concentration event. Money left the chipmakers for European defensives, energy and utilities, and the index fell anyway because the part that moved carries the most weight. Options carry a high risk of rapid loss and are not suitable for every investor.

Market snapshot

Levels are as of the 06:00 CET snapshot on 19 October 2026. US and European figures are the Friday 16 October close; Asian figures are Monday’s session.

US (Friday 16 October close): S&P 500 7,659.44, down 1.09%. Nasdaq 100 29,187.55, down 2.50%. Dow 52,007.21, down 0.34%. The equal-weighted S&P fell 0.40% and the Russell 2000 fund 1.69%. Meta fell 3.72%, Alphabet 2.47% and Nvidia 1.43%; Apple rose 0.43%. The software fund lost 4.80%, semiconductors 3.41%. Energy rose 2.52%, utilities 1.34%.
Europe (Friday 16 October close): Stoxx Europe 600 up 0.72% to 644.75, its strongest week against the S&P 500 since April 2025. The DAX rose 0.95% and the Euro Stoxx 50 0.58%, led by banks.
Asia (Monday session): the Nikkei 225 narrowed its loss to about 0.7% and the Kospi recovered to 0.6% higher after Chinese third-quarter growth of 4.5% beat. Hong Kong was closed.
Commodities and rates: Brent trades near 108 after a five-month high around 110 last week on Middle East supply disruption. Spot gold is 0.2% higher near 4,175. The 10-year Treasury yield rose 2.4 basis points to 5.087% on Friday and reads 5.065% now, the 2-year 4.721%. S&P 500 futures were 0.80% higher at the snapshot, easing to about 0.5% by 08:40 CET.
Market regime: Neutral and choppy. VIX 19.99, 20-day realised volatility 10.19% and stable, the index 0.61% below its 50-day average.

Past performance is not indicative of future results. Source: Saxo, Bloomberg, CBOE.

Volatility surface

The cash curve against the previous session, over each tenor’s 60-session range, with the one-session change across every measure on the board. Source: Saxo, Bloomberg, CBOE.

The front end inverted and the back end barely noticed. VIX1D rose 9.37 to 23.27 and the nine-day measure 6.15 to 20.12, both above the 30-day 19.99, while the one-year added 0.84 to 22.61. Four of the six cash tenors set sixty-session highs, as did VVIX at 109.91.

Ratios. VIX1D/VIX sits at 1.16, the inversion in one number. VIX3M/VIX fell to 1.03 from 1.12 as the front caught the back. VXN/VIX eased to 1.36, and the Nasdaq gauge at 27.13 is the one index measure not at a new high.

VIX futures. The October contract reads 18.50 this morning against spot at 19.99, having closed Friday at 19.24 after adding 1.32 while spot added 3.53. Spot rising faster than the future is what inverts the basis. The 21 October option expiry gives a parity forward of 19.87, consistent to 0.05 across the five nearest strikes, read on indicative pre-open quotes; a session ago the same expiry gave 17.47 at a premium to spot of 1.01, against a discount of 0.12 now.

Rates and correlation. The bond gauge eased 1.35% to 101.11 and gold volatility sits near its sixty-session floor, so nothing outside equities repriced. Three-month implied correlation rose 16.11% to 13.98, a sixty-session high, while dispersion fell 1.16% to 36.61.

Single-name volatility

Saxo’s one-year implied-volatility ranks, read at Friday’s close across 187 US names, show a distribution that shifted up without the levels moving much.

The rank moved, the level did not. On an identical set of names, so the comparison needs no caveat, the median rank rose to 49.2 from 43.9 while the median implied volatility moved only from 33.38% to 33.70%. Rank measures distance from the year’s extremes, so a small absolute move lifts many names at once when they have been sitting in a narrow band.
Both ends shifted the same way. Names below rank 20 fell from 15.0% of the set to 10.2%, and names above 70 rose from 14.4% to 19.8%. That is the whole distribution sliding up, not the tails fattening.
The gap against the index is the point. Index implied volatility rose 21.45% on the session. The typical single name rose under 1%. Almost all of the index move is therefore in the correlation term rather than in what the components cost.
Europe went the other way. Across 337 names on an identical set the median rank fell to 43.5 from 46.2 and the median implied volatility eased to 32.13% from 32.58%, which fits a session European markets closed higher and before the US selloff deepened.

Past performance is not indicative of future results. Source: Saxo.

Options flow sentiment

Based on end-of-day 16 October, yesterday’s positioning, not today’s price action.

All ten reports read as structure rather than conviction: expiry rolls, paired legs and mid-market prints, with both calls and puts bought and sold across the large technology names. Treat it as neutral.

One line is worth naming because it is the only readable index-level side: buyer-initiated put protection in the Nasdaq 100 fund, mostly spread-financed. That is hedging demand, not a directional bet.

Where the week's range sits

The range the option market priced for this week around Friday 16 October’s close, with the nearest listed strike at each bound. The week has not opened, so the marker sits on Friday’s close. Figures are at-the-money straddles read from the Saxo chain at Friday’s close and centred on put-call parity. Illustrative only, not a trade recommendation. Source: Saxo, Bloomberg, CBOE.

The week opens with a wider band than the last one. The S&P 500 carries 119.13 points, 1.56%, against 82.80 points and 1.06% a week ago, so the priced week is 47% wider on the same six markets and the same method. The Nasdaq 100 fund is priced for 2.58%, gold for 2.05%, energy for 3.00% and bitcoin’s fund for 3.81%.

Two features matter. The 23 October expiry stops before the 28 October Federal Reserve decision, so none of this band pays for the meeting, and the VIX row uses the 21 October expiry, the nearest listed, covering only the week’s first three sessions.

Options carry a high risk of rapid loss and are not suitable for every investor. Costs and charges apply and vary by account and venue; check the rates applicable to you before entering any position.

Today's catalysts

Canadian September consumer prices at 14:30 CET, the only scheduled release of note, with the US housing market index at 16:00.
No US data of consequence, which leaves the session to the earnings run-in and to whether the chip selloff stabilises.
Earnings today: Fifth Third Bancorp and Steel Dynamics, before a heavy week.
The week ahead: Netflix, GE Aerospace and General Motors on Tuesday, then Meta, Tesla, SAP, IBM and Texas Instruments on Wednesday, with the Federal Reserve decision on 28 October.

Earnings scorecard

Option-implied expected move for each report day against the average move after the last eight reports, as of 19 October 2026. Illustrative only, not a trade recommendation. Source: Saxo, Bloomberg, CBOE.

The widest premiums against own history are the European banks and Alphabet. UBS prices about 6.1% against a 3.1% eight-report average, 2.0x, and Alphabet 5.4% against 4.1%. At the other end Apple prices 1.4% against 2.5%, 0.6x.
Rank and event premium answer different questions. Netflix carries an implied-volatility rank of 81 and prices the board’s highest expected move, 8.9%. Apple carries 68 and prices 1.4%. Rank measures the level against the name’s own year; the expected move measures what one day costs.

What the options market taught us: ASML

Ahead of ASML’s results on 14 October, we looked at the move its options were pricing. The results came and went quietly. The days around them did not.

ASML closing prices from 8 to 16 October 2026 against the range priced by options for the 16 October expiry, and each session’s move. Past performance is not indicative of future results. For education only. Source: Saxo price data, author calculation.

What the options priced: a move of about 6.5% by the 16 October expiry.
The results day itself: up 1.2%.
The full stretch to expiry: down 9.4%, most of it in the sessions before and after the report, as chip stocks sold off.

The lesson is in what that 6.5% measured. An option does not know which day the news arrives; its price covers every trading day until expiry. Here the report was the calm part and ordinary days did the moving. So when reading a priced earnings move, it helps to count the days it covers and ask what else happens in them.

Next up: Netflix on 20 October, Meta, SAP and Tesla on 21, Nestle and Roche on 22.

Options carry a high risk of rapid loss and are not suitable for every investor. Costs and charges apply and vary by account and venue; check the rates applicable to you before entering any position.

What the market is pricing

Session implied range: today’s expiry prices 61.5 index points, 0.80%. Friday’s priced 41.65 points, 0.54%.
Event implied range: the 23 October expiry prices 118.3 points, 1.54%. It priced 100.25 points on Friday with six sessions to run and has five now, where decay alone leaves about 91.5, so roughly 27 points went in beyond what the clock explains.
Correlation read: implied correlation rose 16.11% to 13.98 while dispersion fell 1.16% to 36.61, the mirror of Thursday. Six-month realised correlation across S&P names sits at 0.01, the lowest since 2001, so index volatility had an unusually low base to reprice from.
Tail risk signal: SKEW rose 5.07% to 168.59, above all 60 stored sessions, and the tail-risk gauge 48.98%. Far downside protection got dearer alongside the whole front end.

In our view the question is whether the components keep moving together. Index volatility at 19.99 against 20-day realised volatility of 10.19% suggests the option market may be paying for correlation the tape has not yet delivered, and a sixty-session high leaves correlation less room to rise. This week’s expiry stops before the Federal Reserve decision, so the band pays for earnings and the chip trade, not the meeting.

Related articles/content
Correlation falls the index stays quiet - Options Brief - 16 October 2026 Front end reprices long end holds - Options Brief - 15 October 2026 -- Market Quick Take - Chipmakers extend their slide as Brent holds above 107 - 19 October 2026 Market Quick Take Meltdown in AI stocks yields to late recovery - 16 October 2026

More from the author
Koen Hoorelbeke's articles on Saxo Follow and interact with me on X (Twitter) for more intraday content

Koen Hoorelbeke

Investment and Options Strategist

Saxo Bank

Dip buyers: Most bought and sold shares last week

Mon, 19 Oct 2026 11:13:00 Z

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

The most bought and sold stocks last week.

The Nasdaq suffered a 4.5% decline last week amid a broad pullback in some of the biggest momentum stocks and just about anything related to the AI buildout as pessimism about the sector grew. Semiconductors were down 11% for the week while Tech fell about 6% as the S&P 500 declined 2% for the week as investors turned their focus to the likelihood that the AI capex cycle may be peaking.

But Saxo UK clients were buying the dip. Micron, one of the big memory stocks at the heart of the selloff and a 12% decliner for the week, attracted the most interest and 62% buys.

Nvidia followed as the next most traded stock with 64% buys, followed by SpaceX, which had a 62% buy ratio.

Whilst clients were sellers of two key hyperscalers, Microsoft (35% buys) and Meta (43% buys), they were buying dips in some of the worst-hit AI-related hardware and semis names like Intel, CoreWeave, AMD, SanDisk and Nebius.

Here's the list of the 20 most traded stocks and ETFs last week with the % of buys.

Top Stocks (Most Traded)	Buy%
Micron Technology Inc.	62%
NVIDIA Corp.	64%
Space Exploration Technologies Corp. - SpaceX	62%
Microsoft Corp.	35%
Intel Corp.	68%
CoreWeave Inc.	67%
Advanced Micro Devices Inc.	68%
Nebius Group NV	71%
Meta Platforms Inc.	43%
SanDisk Corp	67%
BP Plc	17%
Palantir Technologies Inc.	32%
Rocket Lab Corporation	73%
Oracle Corp.	57%
VanEck Semiconductor UCITS ETF	46%
Alphabet Inc. Class A	68%
Broadcom Inc.	52%
IonQ Inc.	76%
Netflix Inc.	67%
SK hynix Inc - ADR	60%

Source: Saxo UK

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 - Chipmakers extend their slide as Brent holds above $107 - 19 October 2026

Mon, 19 Oct 2026 06:37:00 Z

Market drivers and catalysts

Macro: The Fed chair damped hike expectations while industrial output ran hotter than forecast
Equities: US equities suffered another AI-led selloff, Europe outperformed as investors rotated into defensive sectors, Asian markets remained under pressure.
Volatility: Index volatility jumped and the shortest-dated gauges repriced hardest of all
Digital Assets: Listed crypto shares and miners fell hard while the tokens themselves barely moved
Commodities: Oil retreats from five-month high as gold steadies and LME Week begins
Fixed Income: Long yields rose on Friday before easing back through the Asian morning
Currencies: The dollar slipped on Fed hold bets with the Australian dollar leading gains

Macro

Fed Chair Warsh offered no guidance on this month's policy decision, saying hotter inflation had not changed his outlook, which was cited as further reducing market-implied odds of an October increase. He said inflation is still too high but broadly in line with expectations. The Fed lifted rates to 3.75% to 4% in September, its first increase since 2023, and most officials still expect one more this year with the next meeting due on 28 October.
US industrial production rose 0.7% month on month in September, the most in five months and above the 0.4% forecast, with manufacturing output up 0.3%, mining 0.2% and utilities 3.5%. For the third quarter, industrial output grew at a 2.8% annualised rate. Capacity utilisation climbed to 76.9%, the highest since December 2023 and above the 76.5% forecast, though still 2.5 points below its long-run average of 79.4%.
Further Middle East supply disruption was reported over the weekend. Saudi and Houthi fighting continued, with a Saudi helicopter down near Yemen and Houthi strikes on Yanbu, while three tankers were damaged in the Strait of Hormuz as Iran's Revolutionary Guard tightened control of the waterway. Ukrainian drones struck oil sites in St Petersburg.
President Trump said he had struck a diesel export deal with Russia and delayed new sanctions to safeguard Ukraine peace talks, though US lawmakers have introduced a bill to block the transaction. Meanwhile, Ukrainian President Volodymyr Zelenskyy accused Donald Trump of trying to pressure Kyiv into surrendering to Russia, escalating a week-long row with the US president.
China’s economy beat expectations in Q3, expanding by 4.5%, while retail sales growth picked up more than expected to 1.1% and industrial production growth accelerated to 5.5% year-on-year in September. Meanwhile, home prices fell at a slower pace in September, raising hopes that the five-year property downturn, which has weighed on economic growth, may finally be easing as the latest stimulus measures begin to take effect.

More in our Macro Analysis & Macroeconomic News

Macro calendar highlights (times in GMT)

1230 – Canada Sep CPI

Earnings events

Today: Fifth Third Bancorp, Steel Dynamics
Tuesday: GE Aerospace, Netflix, RTX Corporation, ABB Ltd, Intuitive Surgical, Chubb, Capital One, 3M Company, General Motors, Northrop Grumman, United Airlines
Wednesday: Meta, Tesla, Lam Research, Philip Morris, SAP, Thermo Fisher Scientific, Texas Instruments, IBM, Abbott Laboratories, NextEra Energy, AT&T, Iberdrola, Danaher
Thursday: Procter & Gamble, Gilead Sciences, Union Pacific, Western Digital, Valero Energy, Blackstone, Newmont, Lockheed Martin, Spotify, Atlas Copco
Friday: ExxonMobil, American Express, Eni S.p.A, SLB

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

Equities

USA: The S&P 500 fell 1.1% on Friday, while the Dow Jones lost 0.3%, as technology stocks dragged the Nasdaq down 2.5%, capping Wall Street's worst week in months. AI and semiconductor stocks led the decline, with chipmakers recording their longest losing streak since 2008 as investors questioned the scale and financing of AI infrastructure spending. CoreWeave lost more than 20% over the week amid concerns about its funding needs, highlighting growing scrutiny of the AI investment boom. Still, S&P 500 futures rose 0.5% and Nasdaq 100 futures gained 0.9% early Monday, suggesting some relief ahead of a busy earnings week.
Europe: European equities bucked Wall Street's weakness on Friday, with the Stoxx 600 rising 0.7%, the FTSE 100 gaining 0.4%, and Switzerland's SMI advancing 0.3%. Banks and food and beverage stocks led gains as investors shifted away from US technology shares towards more defensive and attractively valued European companies. British American Tobacco and defence group Babcock helped lift the FTSE 100 to its highest close since late August. The Stoxx 600 gained 2.1% over the week, marking its strongest relative performance against the S&P 500 since April 2025. Attention now turns to the upcoming earnings reports.
Asia: Asian equities recovered from steep early losses on Monday, with Japan’s Nikkei 225 narrowing its decline to around 0.7%, while South Korea’s Kospi rebounded to gain 0.6%. SK Hynix dropped 1.3% and Samsung Electronics was flat, following a difficult week marked by fears of stronger Chinese competition in memory chips. Samsung Biologics bucked the trend, gaining more than 8%, while mainland Chinese equities showed greater resilience after third-quarter economic growth reached 4.5%, slightly above expectations. Hong Kong's market was closed for the Chung Yeung Festival, leaving investors focused on corporate earnings and whether the technology selloff would stabilise.

More in our Equity Trading - Stock Market Analysis & News

Volatility

Index volatility repriced sharply alongside the chip rout. VIX rose 21.45% to 19.99, the nine-day measure 44.02% to 20.12 and the one-day measure 67.41% to 23.27, leaving the shortest tenors above spot. VVIX jumped 18.73% to 109.91 and SKEW 5.07% to 168.59. Six-month realised correlation across S&P names sits at 0.01, the lowest since 2001, so index vol had an unusually low base to reprice from.
Beyond the near term the curve held contango, 20.50 at three months to 22.61 at one year, with November VX at 17.92 carrying the midterm hump. Rates volatility eased, MOVE down 1.35% to 101.11. SPX options imply 61.5 points, 0.80%, for today's expiry and 118.3 points, 1.54%, into 23 October.

More in our Options Trading - Stock Market Analysis & News

Digital Assets

BITCOIN ~82,386 +0.45% | ETHEREUM ~2,420 +0.54% | IBIT 46.15 -0.94% | ETHA 54.51 -1.62% | AS OF ~06:00 CET

The listed complex fell hard while the tokens held steady. Strategy dropped 9.56%, Coinbase 5.79% and Circle 5.46%, and the miners fared worst, Riot down 11.48%, IREN 11.19% and Cipher 10.56%, moves that coincided with the unwind in artificial intelligence names rather than with spot.
Bitcoin holds the low $81,000s and Ether trades at $2,365, down 2.1%, with token volatility little changed, DVOL at 38.80. Liquidations cooled to $359 million, 78% longs, from the $937 million peak on 15 October. Spot Ether ETFs lost $320.1 million over 12-16 October, ETHA accounting for 93.4%, while Bitcoin ETFs shed $228 million as IBIT finished flat. Support runs $81,000-$82,000, resistance $84,100, ETH's 15 October low $2,325.

Commodities

Oil: Brent's December contract trades down 1.7% at USD 108 per barrel, having reached a five-month high of USD 110 last week. Supply disruption fears surrounding the Strait of Hormuz and the Black Sea, Houthi strikes on Saudi Aramco's headquarters and damage to three tankers have all been cited as drivers of the rally. This morning's decline, meanwhile, coincides with signs that Middle East supply is holding near pre-war levels. Elsewhere, US lawmakers have introduced a bill to block the Trump-Putin fuel purchase agreement, while Moscow and Kyiv continue to trade tit-for-tat attacks.
Gold: Spot gold trades 0.2% higher at USD 4,175 after ending last week's roller-coaster ride little changed. The market remains caught in a tug of war between short-term selling pressure from macro-focused traders and demand from less interest-rate-sensitive investors seeking a safe haven amid multiple geopolitical and fiscal tensions. In our view, key resistance remains at USD 4,235, while support continues to emerge below USD 4,100. ETF holdings reached a fresh four-year high on Friday while continued net selling by hedge funds saw bullish futures bets cut to a four-month low.
Industrial metals: LME Week kicks off in London today, bringing together producers, consumers, traders and investors from across the global metals industry. The event provides an important opportunity to assess supply-demand trends and the outlook for industrial metals, with discussions often helping to shape market sentiment and price expectations for the year ahead, particularly for copper and other growth-sensitive metals.

More in our Commodity News, Analysis & Commentary

Fixed Income

The Treasury curve steepened on Friday. The ten-year yield rose 2.4 basis points to 5.087% and the thirty-year 2 basis points to 5.428%, while the one-year fell 1.8 basis points to 4.44%, widening the five to thirty-year spread to 54.2 basis points. The oil surge and the primary dealer survey for the November refunding, which asked about long-end buyback operations, were cited as exacerbating the long-end weakness; Citi strategists read the survey as signalling a potential reduction in long-bond issuance.
Despite Friday's long-end softness, ten-year yields fell about 17 basis points over the week, a move that coincided with the wobble in the AI trade. In early European trading the ten-year at 5.065%, the thirty-year at 5.406% and the two-year at 4.721%.

Currencies

The dollar weakened on Friday, the Bloomberg Dollar Spot Index down 0.2%, capping its worst week since early September after Chair Warsh's comments were read as favouring a hold. The softer dollar coincided with the euro breaking a five-week losing streak and with a broad rally in emerging market currencies and equities. Little action has been seen so far today with the dollar index, euro and yen trading near unchanged while the Australian dollar is the clear G10 outperformer this morning, up 0.4% after Friday's risk-on session, while the Canadian dollar also firmed, USDCAD down 0.14%, with higher crude prices cited as support.
COT on forex in the week to 13 October saw the gross dollar long against eight IMM currency futures surge 27% to USD 44.6 billion, an 11-week high and a remarkable USD 37 billion increase over the past four weeks. The euro net short reached a ten-year high, the sterling short climbed to a nine-year high, while the Australian dollar short reached a record high. An increasingly one-sided trade raising the risk of a sharp reversals should the fundamental or technical backdrop shift

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

Saxo Bank

London Quick Take - 5 Things to Know in Markets Today - 19 Oct

Mon, 19 Oct 2026 06:34:00 Z

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

5 things to know in markets today

1. European stocks slide as French unrest rattles sentiment

Weekend riots have created fresh problems for French OATs, with yields up about 7bps today as the unrest adds to concerns about the political and fiscal troubles in France. It underscores how hard it will be for a government to enact the kind of spending restraint required to get the deficit down. The pressure on French bond yields has seen spreads widen again after they’d notched a bit of a recovery over the last week, whilst the CAC 40 tumbled over 1% in early trade on Monday. European shares were broadly weaker but France and Italy are getting the worst of it, with the BTP-Bunds spread also opening up in recent days. The FTSE 100 was down around 0.8% but has had a decent run against the tide that saw equities hit last week. The euro felt the blowback and trades below $1.12, while it’s near a year-and-a-half low against the pound.

2.Oil backs off 5-month high and Treasury yields lower

Treasury yields have backed off a bit despite US inflation data running hot, which has sent the dollar lower more broadly, while oil prices are down after hitting 5-month highs on Friday. Brent crude fell nearly 3% on Monday to below $107 having hit $110 on Friday before the market closed for the weekend after US president Trump waived some specific sanctions relating to Russian energy, which is likely to improve the flow of fuel exports into global markets. Vladimir Putin has reportedly proposed a summit with the US and China to agree a deal to end the war with Ukraine.

3.US stocks up after tough week

US stocks suffered hard last week because tech was a total wreck. There are lots of reasons for the pullback in the AI trade, inevitable in many ways after such a strong run. The Nasdaq closed down another 2% on Friday to notch its worst week since June. Tech was down more than 6% and semiconductors more than 11% lower. CoreWeave slumped 25% as the worst proxy of the AI trade. Apple though hit a $5tn market cap – which is more important? The AI export boom is helping China. Q3 GDP grew at 4.5% as exports, driven by AI, rose 36% in dollar terms on the year before. US futures are indicating a more positive tone to start the week despite the losses for Europe.

4.Meta leads the earnings calendar

Earnings this week will be crucial to broader risk sentiment. In particular, Meta is in focus as the first of the five major hyperscalers to report earnings this quarter. The stock has surged about 30% from its mid-August lows after launching its Muse AI agent, which it followed up with its frontier model Muse Wonder. CEO Mark Zuckerberg also pledged to maintain AI capital spending at scale. Earnings will be dissected for spending commitments but also – critically now - signs of monetisation of AI. Lately that story got a run out with news Meta is teaming up with Apple to enable Muse to be used on its computers. Also reporting this week are Lam Research, Texas Instruments and Netflix.

5.UK inflation data ahead

For the UK the focus is on the inflation data. September’s inflation data will be a crucial piece of the puzzle for whether the Bank of England will raise interest rates in November. Recent comments from a number of Monetary Policy Committee members suggest they are starting to fret over the persistence of higher energy prices feeding second order inflation risks. Stronger GDP data suggests the economy is more resilient than the extremely weak labour market indicates. Recent remarks by governor Andrew Bailey suggest he’s keeping his options open. With the MPC evenly split, he in effect has a casting vote.

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

COT update: Euro short jumps to ten-year high while commodity funds extend selling

Mon, 19 Oct 2026 05:45:00 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, 13 October 2026

Key points:

The Commitment of Traders update highlights futures positions and changes made by hedge funds and other speculators across commodities and forex during the week to last Tuesday, 13 October 2026.
Forex: Speculators lifted their gross dollar long by 27% to an 11-week high of USD 44.6 billion, a USD 37 billion increase in just four weeks, raising the risk of a crowded trade reversal.
Energy: Brent crude attracted strong buying amid persistent Middle East supply risks and tight refined product markets, helping lift the BCOM index by 1.5%.
Metals: Managed money reduced exposure across all metals, led by gold, as dollar strength and elevated US real yields continued to weigh on sentiment ahead of Wednesday's inflation print.
Agriculture: Grain longs fell for a fourth consecutive week, led by corn following a bearish USDA WASDE report, while sugar's net long reached a five-year high.

Forex

The rapid rebuilding of long dollar positions extended into a fourth consecutive week, supported by continued, albeit relatively modest, dollar strength ahead of last Wednesday’s US CPI release. Dollar strength was particularly pronounced against the euro, amid ongoing political and fiscal turmoil in Europe, and the Mexican peso, which fell to its lowest level of the year after minutes from the latest central bank meeting suggested policymakers were increasingly open to rate cuts, undermining the currency’s carry appeal.

Overall, the gross dollar long against eight IMM currency futures surged 27% to USD 44.6 billion, an 11-week high and a remarkable USD 37 billion increase over the past four weeks. The euro net short reached a ten-year high of 138,000 contracts, equivalent to USD 19.3 billion, while the sterling short climbed to a nine-year high of 107,000 contracts, or USD 9 billion. Meanwhile, the Australian dollar short reached a record of 117,000 contracts, equivalent to USD 8.2 billion, a remarkable turnaround from a 13-year high at 86k contracts recorded back in May.

These increasingly stretched positions highlight the extent to which speculative investors have embraced the dollar's recovery. However, they also point to a potentially vulnerable and increasingly one-sided trade, with the risk of a sharp reversal should the fundamental or technical backdrop shift. The rapid unwinding of dollar longs following the multi-year-positioning peak in late July serves as a timely reminder of how quickly sentiment can turn when too many investors find themselves on the same side of the trade.

Non-commercial IMM forex futures position - Source: Bloomberg & Saxo NOTE: Past performance is not indicative of future results

Commodities

Broad selling extended into a second consecutive week despite another period of overall index strength, which lifted the Bloomberg Commodity Index (BCOM) by 1.5%. However, as the table highlights, gains were primarily driven by energy, while all other sectors suffered setbacks, led by grains and precious metals. The reporting period ended just ahead of last Wednesday’s US CPI release, which subsequently triggered considerable turbulence across financial markets.

Managed money buying was concentrated in Brent crude, which gained 5% during the week, followed by gasoil and natural gas, while the speculative net long in sugar rose to a five-year high.

All metals saw net selling, led by gold ahead of the US CPI release. In gold its worth noting the continued battle between investors in ETFs where holdings reached a fresh four-year high last week as opposed to continued net selling by hedge funds in futures market reducing the net long to a four-month low. However, the bulk of the selling was once again concentrated in grains, where a fourth consecutive week of long liquidation followed last month’s record net long of more than one million contracts. Corn suffered the largest reduction as traders responded to the latest and particularly bearish USDA WASDE report, which triggered the biggest one-day corn price slump since 2023.

Managed money positions and changes across key commodity futures - Source: Bloomberg & Saxo NOTE: Past performance is not indicative of future results

Managed money short, long and net positions in energy - Source: Bloomberg & Saxo

Managed money short, long and net positions across key metals - Source: Bloomberg & Saxo

Managed money positions across key agriculture commodities - 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
16 Oct 2026: Commodity weekly Gold steadies as oil tightness and growth fears divide markets 15 Oct 2026: Gold and silver: When falling yields stop helping stocks 14 Oct 2026: Recovering Middle East exports fail to ease crude and diesel tightness 12 Oct 2026: Diesel shortages Why the global economy has more to fear than rising petrol prices 12 Oct 2026: COT on forex and commodities - Week to 6 October 2026 Daily podcasts hosted by John J Hardy can be found here

Related articles/content

16 Oct 2026: Commodity weekly Gold steadies as oil tightness and growth fears divide markets
15 Oct 2026: Gold and silver: When falling yields stop helping stocks
14 Oct 2026: Recovering Middle East exports fail to ease crude and diesel tightness
12 Oct 2026: Diesel shortages Why the global economy has more to fear than rising petrol prices
12 Oct 2026: COT on forex and commodities - Week to 6 October 2026

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

Ole Hansen

Head of Commodity Strategy

Saxo Bank

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

Asia Market Quick Take – 19 October, 2026

Mon, 19 Oct 2026 01:00:00 Z

Key points:

Macro: Saudi and Houthis tension continues. Trump postpones sanctions on Russia.
Equities: US stocks slumped on AI-chip rout; futures rebound ahead earnings-heavy week
FX: USD weakens on Fed-hold bets; AUD outperforms while EUR lags
Commodities: Oil holds near $110 on persistent Middle East and shipping disruptions
Fixed income: Treasury curve steepens amid renewed haven demand

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

Disclaimer: Past performance does not indicate future performance.

Macro:

Fed Chair Warsh offered no guidance on this month’s FOMC decision, saying hotter inflation hadn’t changed his outlook and further reducing odds of an October hike. He said inflation is still too high but broadly in line with expectations. The Fed lifted rates to 3.75%–4% in September, its first hike since 2023, and most officials still expect one more increase this year.
Saudi–Houthi fighting continued with a Saudi helicopter down near Yemen and Houthi strikes on Yanbu, while three tankers were damaged in the Strait of Hormuz as Iran’s IRGC tightened control. Ukrainian drones hit oil sites in St. Petersburg, and Trump said he struck a diesel export deal with Russia and delayed new sanctions to safeguard Ukraine peace talks.
US capacity utilization climbed to 76.9% in September 2026, the highest since December 2023 and above the 76.5% forecast, but still below the 79.4% long-run average. Mining rose to 87.5%, utilities to 73.8%, and manufacturing to 75.9%.
US industrial production rose 0.7% month-on-month in September, the most in five months and above the 0.4% forecast. Manufacturing output increased 0.3%, mining 0.2%, and utilities 3.5%. Capacity utilization climbed to 76.9%, still 2.5 points below its long‑run average. For Q3, industrial output grew at a 2.8% annualized pace.
The New York Fed’s Services Index slid to -20.7 in October 2026 from -8.7, the weakest since March, signaling faster contraction amid a very weak business climate, flat employment, high input costs, faster price increases, and a pessimistic six‑month outlook.
Eurozone inflation rose to 3.8% in September 2026 from 3.2%, a third straight acceleration and the highest since September 2023, driven by higher energy, services, and food prices. Core inflation edged up to 2.5%. Month-on-month, CPI increased 0.6%.

Equities:

US — On Friday 16 October, the S&P 500 fell 1.1% to 7,659, the Nasdaq Composite dropped 2.1% to 26,140, and the Dow slipped 0.3% to 52,002, capping the S&P 500's worst week since June and the Nasdaq's worst week since April 2025. The selloff was driven by a rout in AI and semiconductor stocks, with chipmakers posting their longest losing streak since 2008. CoreWeave was the epicentre of the AI trade unwind, falling more than 20% on the week amid capital expenditure financing concerns. This morning, S&P 500 futures are up 0.5% and Nasdaq 100 futures are up 0.9%, bouncing ahead of a heavy earnings week.
EU — European equities outperformed sharply last week, with the Stoxx 600 rising 2.1% — its biggest weekly outperformance versus the S&P 500 since April 2025 — as investors rotated out of AI names and into European defensives and value stocks. On Friday, the Stoxx 600 closed up 0.7% to 644.74, led by banks and food and beverage. The FTSE 100 rose 0.4% to 10,881, its highest close since 25 August, with BAT and Babcock leading. The SMI gained 0.3% to 14,391. Goldman Sachs strategists expect Stoxx 600 constituents to post 20% earnings growth in the second half of 2026.
Asia — Asian equities are navigating a difficult backdrop this morning as the global AI trade continues to unwind. The Kospi is under acute pressure, with the 5,000 level now firmly on investors' radar after this month's slide of more than 10%; Samsung Electronics and SK Hynix have been among the hardest hit following reports of Chinese competition in memory chips. The Hang Seng closed up 0.5% to 24,186 on Friday 16 October, led by Alibaba (+2.3%) and Lenovo (+8.0%), though mainland investors sold a net HK$3.57 billion via Stock Connect for a fourth consecutive session. The Nikkei and STI are also under pressure from the broader AI-driven selloff and elevated oil prices. Nasdaq futures bouncing +0.9% this morning, alongside Anthropic's announcement of a public-benefit fund commitment, may provide some relief at the open. The Taiwan dollar remains under pressure, having posted its largest single-day drop in over a year last week on AI sentiment.

Earnings this week:

Tuesday: GE Aerospace, General Motors, 3M, Netflix, United Airlines, SpaceX, CATL
Wednesday: Abbott, NextEra Energy, AT&T, CME Group, Danaher, Tesla, Meta, IBM, Lam Research, Texas Instruments, Philip Morris
Thursday: Lockheed Martin, Nokia, Comcast, American Airlines, Bloom Energy
Friday: American Express, Schlumberger

FX:

USD weakened on Friday, with the Bloomberg Dollar Spot Index down 0.2%, capping its worst week since early September after Warsh’s comments were read as favouring a Fed hold. The softer USD helped the euro break a five‑week losing streak and supported a broad rally in EM FX and equities.
AUD is the clear G10 outperformer this morning (+0.27%), extending Friday's risk-on momentum.
EUR is the laggard among commodity-currency pairs, down 0.09%, consistent with the geopolitical risk premium noted at the open.
JPY is firming slightly — USDJPY pulling back to 157.79 from Friday's 158.02 close, suggesting mild safe-haven demand.
CAD is also strengthening (USDCAD -0.14%), likely supported by oil prices.

Commodities:

Brent crude hit $110 a barrel for the first time since May last week, driven by supply disruption fears from the Strait of Hormuz and the Black Sea, as well as Houthi strikes on Saudi Aramco's headquarters. Oil slipped modestly this morning as doubts grow over the materialisation of Trump's Russian diesel deal, with US lawmakers having introduced a bill to block the transaction.
Gold is trading near multi-month highs, supported by elevated inflation, geopolitical risk and tentative safe-haven flows as the AI trade wobbles. The 10-year real yield at 2.75% remains a headwind, though the recent bond rally has provided some relief.
Silver has fallen more than 50% from its record high earlier this year, with analysts noting the metal's economic sensitivity as a potential leading indicator of slowing growth amid persistently high fuel prices.

Fixed income:

US Treasuries — curve steepening: The Treasury curve steepened on Friday, with the 10-year yield rising 2.4bps to 5.087% and the 30-year rising 2bps to 5.428%, while the 1-year fell 1.8bps to 4.44%. The 5s30s spread widened to 54.2bps. The long-end selloff was exacerbated by the oil surge and the release of the primary dealer survey for the November refunding, which asked about long-end buyback operations — Citi strategists interpreted this as signalling a potential reduction in long-bond issuance.
Despite Friday's long-end weakness, 10-year yields fell approximately 17bps over the course of last week as the AI trade wobbled and the Nasdaq tumbled 5.5%. Treasuries are showing tentative signs of reclaiming their traditional safe-haven role, threatening investors who are heavily short duration.
8-week T-bill yields hit 4.05% at auction last week — the highest in over a year — with record-low demand, reflecting investor reluctance to absorb growing bill supply amid a widening deficit and an uncertain Fed path.

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Correlation falls, the index stays quiet - Options Brief - 16 October 2026

Fri, 16 Oct 2026 11:30:00 Z

Implied correlation fell almost six per cent to 12.04 while the equal-weighted index rose four times as fast as the headline one. The index is not calm, its components are cancelling.

Implied correlation fell almost six percent, the largest move on the board.

MARKET REGIME: TRANSITIONING | VIX 16.46 | TERM STRUCTURE: CONTANGO | SKEW: ELEVATED (160.45) | FRONT-MONTH VIX FUTURES: 17.47

Key findings

Correlation did the work, not calm. Three-month implied correlation fell 5.94% to 12.04, the largest single move on the board, while the equal-weighted S&P 500 rose 1.36% against the headline index’s 0.33%.
The index is the quietest thing on the screen. Saxo’s volatility ranks put the four large index funds at a median of 17.8 and the seven largest technology names at 58.0, a gap of 40 rank points.
Volatility did not leave, it moved. The bond market measure rose 3.45% to 102.50, the biggest riser on a board where nine of fourteen measures fell.
Widest earnings premium against own history: Novartis at 1.4x, Apple at 0.3x.

Headline driver

September producer prices rose 1.3% on the month against 0.5% expected, the largest increase since March 2022, energy-led at 10.8%. Core rose 0.7% and the annual rate reached 6.3%. Retail sales beat at 0.8%, though petrol stations carried most of it and the control group added 0.1%.

The market read the composition, not the headline. Treasuries rallied, the 10-year yield bottoming below 5.04% before recovering above 5.08%, still some 12 basis points below its level before the consumer price release. Pricing for a 28 October Federal Reserve increase fell back to 15%.

In our view that is why the session rotated rather than fell. Money left the chipmakers for healthcare, banks and smaller companies, and the index barely moved because the two sides cancelled. Options carry a high risk of rapid loss and are not suitable for every investor.

Market snapshot

Levels are as of the 06:00 CET snapshot on 16 October 2026. US and European figures are the Thursday 15 October close; Asian figures are Friday’s session.

US (Thursday 15 October close): S&P 500 7,744.06, up 0.33%. Nasdaq 100 29,935.59, down 0.05% after recovering a steep intraday fall. Dow 52,183.23, up 1.08%. The equal-weighted S&P rose 1.36% and the Russell 2000 fund 1.37%, four times the headline index. Nvidia fell 1.84%, Tesla 1.29% and the semiconductor fund 1.04%; healthcare rose 1.86%, financials 1.38% and retail 3.68%. Microsoft was the exception, up 1.08%.
Europe (Thursday 15 October close): Stoxx Europe 600 up 0.38% to 640.17, led by healthcare. The CAC 40 rose 0.78% and the DAX 0.33%, the Euro Stoxx 50 fell 0.36%, and the FTSE 100 closed around 10,840, up 1.1%.
Asia (Friday session): Kospi up 4.11% to 5,782.62, Nikkei 225 1.80%, Hang Seng 1.21% and the CSI 300 0.75%.
Commodities and rates: Brent holds above 105, WTI 95.67. Gold futures rose 0.82% to 4,204.5, a second day higher, the silver fund 3.39%, the miners fund 4.34%. The 10-year Treasury yield is 5.069%, the 2-year 4.742% and the 30-year 5.415%, derived from the prior session’s export, not the file’s change column.
Market regime: Transitioning. VIX 16.46, 20-day realised volatility 9.37%, stable, the index 0.48% above its 50-day average.

Past performance is not indicative of future results. Source: Saxo, Bloomberg, CBOE.

Volatility surface

The cash curve against the previous session, over each tenor’s 60-session range, with the one-session change across every measure on the board. Source: Saxo, Bloomberg, CBOE.

Every tenor fell and the curve kept its shape. VIX1D eased 0.21 to 13.90, the nine-day measure 0.62 to 13.97, the 30-day 0.41 to 16.46, the three-month 0.30 and the one-year 0.17. The front gave back most of Wednesday’s spike; the back never registered it. Contango runs 13.97 to 21.77 at one year.

Ratios. VIX3M/VIX rose to 1.12 from 1.11. VXN/VIX widened to 1.39 from 1.34, the Nasdaq premium growing on a session the Nasdaq underperformed by a third of a percent. It marks where volatility is concentrated, not the size of the move.

VIX futures. The 21 October option expiry gives a parity forward of 17.47, consistent to 0.15 across the five nearest strikes, a premium to spot of 1.01 points. A session ago the same expiry gave 17.68 at a premium of 0.81: the forward eased while the premium widened, because spot fell further. The feed’s continuous series reads 17.85 and reconciles with neither parity nor its stored prior, so no comparison is drawn from it.

Rates and correlation. The bond market volatility measure rose 3.45% to 102.50 on a day the 10-year yield fell about 3 basis points, the one place on the board where volatility got dearer. The Treasury fund gauge rose 5.17% to 15.67. Three-month implied correlation fell 5.94% to 12.04, dispersion rose 1.20% to 37.04.

Single-name volatility

Saxo’s one-year implied-volatility ranks, read at Thursday’s close across 187 US names, show the distribution widening at both ends.

Both tails grew and the middle fell. The median rank eased to 43.9 from 44.6 on an identical set of names, so the comparison needs no caveat. Underneath it, names below rank 20 rose from 12.8% to 15.0% of the set and names above 70 from 13.9% to 14.4%. A session that fattens both ends while the centre slips is dispersion arriving in the single names.
The index funds are the cheapest thing on the board. The four large index funds carry a median rank of 17.8, down 4.5 on the day, with the S&P fund at 13.4, the Russell fund 16.9 and the Dow fund 18.8. The seven largest technology names sit at 58.0 and rose 1.4. Alphabet is the richest of them and Nvidia the cheapest.
Financial volatility is coming out now the reports have cleared. The group’s median rank fell 5.0 to 27.6, the largest group move of the session, which is the usual pattern once an event has passed.
A big move with no volatility bid. The metals group sits at a median rank of 19.1 with half its members below 20, on a session the gold miners fund rose 4.34%. Europe barely moved: across 329 names the median was 47.5 against 47.7.

Past performance is not indicative of future results. Source: Saxo.

Options flow sentiment

Based on end-of-day 15 October, yesterday’s positioning, not today’s price action.

October monthly expiry mechanics dominated the tape: deep in-the-money packages, cumulative-volume fragments and mid-market prints inside multi-leg codes. All ten reports score their own conviction at two or three out of five. Treat it as neutral.

One line is worth naming against the day’s reading, because it cuts the other way: a large opening purchase of 30 October Nasdaq fund puts, lifted at the offer, in the expiry that spans the Federal Reserve decision. That is index-level hedging demand on a session when index volatility fell.

Where the week's range sits

The range the option market priced for this week around Friday 9 October’s close, with the nearest listed strike at each bound and the Thursday 15 October close as the marker. Figures are at-the-money straddles read from the Saxo chain at Friday’s close and centred on put-call parity. Illustrative only, not a trade recommendation. Source: Saxo, Bloomberg, CBOE.

With the week’s expiry falling today, four of the six rows have come back inside the range priced for it. The S&P 500 has spent 81% of its 82.80-point range, energy 91%, gold 23% and bitcoin’s fund 3%. Two remain outside: the Nasdaq 100 fund at 187% of its 12.42-point range and the VIX at 107%.

Yesterday five of the six sat outside with one session to run. That reversal is the week in one line: the range was breached midweek, then recovered, and what recovered it was not the index moving back but the components moving apart far enough to cancel.

Options carry a high risk of rapid loss and are not suitable for every investor. Costs and charges apply and vary by account and venue; check the rates applicable to you before entering any position.

Today's catalysts

September import and export price indices at 14:30 CET, the third inflation read of the week after consumer and producer prices.
September industrial production at 15:15 CET, with Canadian housing starts at 14:15.
Today is the October monthly expiry, the largest open-interest roll of the month, which tends to loosen pinning into the afternoon.
Earnings: Investor AB and Truist Financial, with Netflix, SAP and Tesla next week ahead of the 28 October Federal Reserve decision now priced at 15% for an increase.

Earnings scorecard

Option-implied expected move for each report day against the average move after the last eight reports, with implied-volatility rank and last close, as of 16 October 2026. Illustrative only, not a trade recommendation. Source: Saxo, Bloomberg, CBOE.

Six of the eight that have reported moved inside what was priced. Goldman Sachs came in at 0.1x its expected move, JPMorgan 0.3x, ASML 0.3x and TSMC 0.5x. Only Citigroup, at 5.6% against 3.4%, and Bank of America, at 4.8% against 2.9%, exceeded it, both at 1.6x.
The widest premiums against own history are European healthcare and Alphabet. Novartis prices 2.9% against a 2.1% eight-report average, 1.4x, and Alphabet 5.1% against 4.1%, 1.2x. At the other end Apple prices 0.8% against 2.5% and Meta 3.7% against 7.4%.
Rank and event premium answer different questions. Apple carries an implied-volatility rank of 61, the upper half of its year, yet prices only 0.3x its own eight-report average. Netflix carries 77 and prices 1.1x. Rank measures the level against the name’s own past; the expected move measures what one day costs.
Next up: Netflix on 20 October, SAP and Tesla on 21, Nestle and Roche on 22.

Options carry a high risk of rapid loss and are not suitable for every investor. Costs and charges apply and vary by account and venue; check the rates applicable to you before entering any position.

What the market is pricing

Session implied range: today’s expiry prices 41.65 index points, 0.54%, on a parity forward of 7,746.25. Yesterday’s priced 47.65 points, 0.62%.
Event implied range: the 23 October expiry prices 100.25 points, or 1.29%. Today’s expiry priced 65.05 points a session ago with two to run, where decay alone leaves about 46.0. It printed 41.65, so roughly 4.4 points came out beyond what the clock explains: premium that went in through the consumer price print came out through the producer price print.
Correlation read: three-month implied correlation fell 5.94% to 12.04 while dispersion rose 1.20% to 37.04. Correlation down with dispersion up is a rotation, the mirror of yesterday.
Tail risk signal: SKEW rose 2.00% to 160.45, a new high above all 60 stored sessions, on a day the 30-day measure fell: far downside protection got dearer as index volatility got cheaper.

In our view the open question is whether the components keep disagreeing. Index volatility this low says the pieces are offsetting, not that risk has gone, and correlation at 12.04 leaves little room to offset harder. The 28 October Federal Reserve decision is the likeliest thing to move them together.

This material is produced for informational and educational purposes only and does not constitute investment advice or a recommendation to buy or sell any instrument. Options involve significant risk and are not suitable for all investors. Figures quoted are derived from option-implied pricing at the stated snapshot times and may change rapidly.

Related articles/content
Front end reprices long end holds - Options Brief - 15 October 2026 Sectors pull apart the index holds - Options Brief - 14 October 2026 -- Market Quick Take Meltdown in AI stocks yields to late recovery - 16 October 2026 Market Quick Take - Risk sentiment crumbling US treasuries a safe haven - 15 October 2026

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Koen Hoorelbeke's articles on Saxo Follow and interact with me on X (Twitter) for more intraday content

Koen Hoorelbeke

Investment and Options Strategist

Saxo Bank

Commodity weekly: Gold steadies as oil tightness and growth fears divide markets

Fri, 16 Oct 2026 11:00:00 Z

Key Points:

Commodities diverge: The Bloomberg Commodity Index trades virtually unchanged on the week, with energy and soft commodities offsetting losses across metals and grains.
Energy supply risks deepen: Elevated freight and crude acquisition costs are undermining refinery profitability, threatening further fuel supply constraints despite recovering Middle East crude exports.
Precious metals find support: A sharp reversal lower in Treasury yields and the dollar helps gold challenge its downtrend, while silver's recovery from its weekly lows suggests renewed investor interest.
Grains search for a floor: Bearish USDA revisions, harvest pressure and speculative long liquidation have driven a sharp correction, raising questions about whether selling has become overextended.

A flat commodity index conceals growing market divisions

The Bloomberg Commodity Total Return Index heads for a marginal weekly decline of 0.1%, leaving it up 1.6% month-to-date and nearly 35% year-to-date. Beneath the calm headline performance, some divergence has emerged, with strength in energy and soft commodities offsetting losses across metals and grains.

The mixed performance reflects a market caught between persistent supply disruptions, weakening economic confidence and the unwinding of crowded speculative positions. Nowhere is this tension more evident than in energy, where elevated prices signal physical scarcity even as the economic consequences of prolonged disruption become more apparent.

The macroeconomic backdrop has also turned increasingly unsettled. A hotter-than-expected US September inflation report initially sent Treasury yields sharply higher, raising concerns about renewed Federal Reserve tightening. The reaction subsequently reversed dramatically as weakness in technology stocks, particularly those exposed to the AI investment boom, triggered a short covering rally in Treasuries. The two-year yield fell from a post-CPI high of 4.95% to 4.73%, leaving it six basis points lower on the week, while the ten-year benchmark reversed from 5.32% to 5.08%, a weekly decline of 16 basis points.

The dollar also lost momentum, heading for its first, albeit modest, weekly decline in five weeks. These developments helped precious and, to a lesser extent, industrial metals recover ahead of the weekend, reducing earlier losses. Importantly, falling yields failed to generate a sustained recovery in technology shares. While a few days of selling do not necessarily signal a deeper correction, the divergence raises questions about the durability of the equity rally and growing concerns about valuations and earnings.

For commodities, lower yields and a weaker dollar are generally supportive. However, if falling yields increasingly reflect growth concerns rather than expectations of easier monetary policy, the benefits may be uneven, particularly for industrial commodities.

Commodities one week returns - Source: Bloomberg & Saxo Note: Past performance is not a reliable indicator of future performance

Oil: High costs increasingly threaten the economics of refining

Crude oil prices remain elevated, with Brent trading around USD 105 per barrel and WTI outperforming during the week. The Middle East conflict continues to dominate supply conditions, even as crude shipments recover towards pre-war levels. However, recovering exports should not be mistaken for normalisation. Attacks on vessels in and around the Strait of Hormuz, combined with exceptionally high freight and insurance costs, continue to disrupt the economics of moving crude and refined products.

A growing concern is the pressure on refinery profitability. According to the International Energy Agency's October Oil Market Report, elevated crude acquisition and freight costs have severely undermined refining margins in Europe and Asia, despite historically high diesel and other middle-distillate prices.

This creates an apparent contradiction: diesel remains exceptionally expensive, yet producing it is becoming increasingly difficult to do profitably. Refiners cannot simply convert every barrel of crude into diesel. Alongside diesel and jet fuel, they produce gasoline, naphtha and fuel oil, whose margins have deteriorated sharply. Gasoline cracks have turned negative in some markets, while other fuels also trade at discounts to crude.

Consequently, strong diesel cracks are increasingly insufficient to offset weaker returns elsewhere, particularly when crude must be transported over longer distances at extraordinary cost. European and Asian refiners dependent on imported crude are especially exposed, while US operators generally benefit from cheaper domestic feedstocks.

Continued margin deterioration could force some refiners to reduce throughput, deepening the shortage of middle distillates and adding further upward pressure on diesel prices. These risks may end up creating a vicious circle in which high acquisition costs contribute to reduced fuel availability.

The recent US-Russia agreement allowing limited Russian diesel shipments is unlikely to materially change the picture. The quantities discussed remain modest relative to disrupted global product flows, while Russian refining and exports face their own constraints.

Meanwhile, elevated European natural gas prices add to the energy squeeze ahead of winter. With storage less comfortably filled than last year and uncertainty surrounding Middle East LNG supplies, Europe remains vulnerable to cold weather and further disruptions.

The key question in the short term is therefore not simply whether sufficient crude can be produced, but whether it can be transported, refined and delivered at an economically sustainable cost.

European and Asian refinery margins - Source: Bloomberg & Saxo

Gold challenges its downtrend as silver finds tentative support

Precious metals experienced another volatile week, with gold recovering from selling pressure following the stronger-than-expected US inflation report. The subsequent reversal lower in Treasury yields and the dollar provided support, leaving gold little changed on the week.

Despite the correction from last year's record highs, underlying investment demand remains resilient. As highlighted in our recent gold and silver update, rising ETF holdings have contrasted with speculative futures selling, suggesting that longer-term investors continue to absorb supply from more rate-sensitive traders.

Gold is showing tentative signs of breaking its recent downtrend. In our view, a sustained recovery above USD 4,235 would provide further evidence that the corrective phase is ending. Whether this develops into a sustained bullish trend will depend partly on momentum-driven traders, including hedge funds, shifting from net sellers to net buyers. Renewed speculative buying alongside resilient ETF demand could provide the necessary momentum.

The changing relationship between bond yields and equities may also become important. Gold traditionally struggles when real yields and the dollar rise, but declining yields driven by concerns about growth and equity valuations could provide a more supportive backdrop.

Silver has struggled to keep pace, recording a weekly decline of more than 5%. However, encouraging signs are emerging. Following a break above resistance around 72.60, the gold-silver ratio swiftly retraced part of its advance, suggesting investors may be rebuilding exposure at lower prices. If sustained, this could keep the ratio broadly rangebound around 68, as it has been since July.

Silver's industrial exposure leaves it vulnerable to weaker risk sentiment, but its dual role as an industrial and precious metal could become an advantage if lower yields, a softer dollar and renewed investor interest outweigh growth concerns. While an independent uptrend has yet to emerge, recent price action suggests underlying demand remains intact.

Gold retains the stronger technical picture, but silver's ability to attract buying on weakness offers encouragement. A sustained decline in the gold-silver ratio towards 68 would strengthen the case for renewed silver outperformance, particularly alongside improving risk appetite and a broader metals recovery.

Spot Gold - Source: Saxo | Note: Past performance is not a reliable indicator of future performance

Grains: Speculative liquidation adds to harvest pressure

The grain sector has suffered a correction of around 10% since early September, driven by accelerating US harvest pressure, disappointing Chinese buying and increasingly bearish supply estimates. Corn has been particularly hard hit following the USDA's latest World Agricultural Supply and Demand Estimates report, which raised its forecasts for US production and ending stocks.

December corn futures have consequently suffered a top-to-bottom decline of around 15% since early September, retracing 61.8% of the rally from July into early September. This represents an important technical area where traders may begin assessing whether the correction has become overextended.

Positioning has undoubtedly contributed to the weakness. During August, speculative investors accumulated exceptionally large long positions across key grain and soft commodity futures, leaving markets vulnerable to liquidation once prices began reversing. The subsequent selling has therefore reflected not only deteriorating fundamentals but also the unwinding of crowded positions, a combination that can produce sharp and occasionally exaggerated price movements.

The key question now is how much liquidation remains. The latest available CFTC data showed that speculative length in corn remained substantial ahead of the USDA report, suggesting that additional selling may have followed the bearish revisions. The next positioning update will be particularly important in assessing whether the market has moved closer to clearing the excess speculative exposure.

Soybeans have also struggled, with Chinese purchases falling short of earlier expectations. Although renewed buying could provide support, a sustained recovery will likely require stronger evidence of demand alongside signs that speculative selling is becoming exhausted.

For now, bearish fundamentals remain a challenge, but the combination of substantial price corrections, important technical support levels and potentially reduced speculative exposure raises the possibility of a recovery should the flow of negative news begin to ease.

Speculative positions in grains held by managed money accounts - Source: Bloomberg & Saxo

Industrial metals: Iron ore highlights China's persistent demand problems

Industrial metals have struggled to benefit fully from the softer dollar and declining yields, reflecting concerns about global growth and, in particular, the weakness of China's traditional construction-related demand. Copper has shown some resilience, supported by longer-term demand linked to electrification, power grids and data centres. However, elevated exchange-monitored inventories and uncertain near-term demand continue to limit upside momentum.

Iron ore presents an even clearer example of the challenges facing China's industrial economy. Singapore futures slipped below USD 90 per tonne to a two-year low, extending this year's decline to around 15%. The weakness reflects the combination of subdued steel demand and ample global supply, with new production from projects adding to an already well-supplied market. China's prolonged property downturn continues to weigh heavily on construction activity, with crude steel production during the first eight months of the year falling to its lowest level for that period since 2018.

The contrast with copper is notable. While both metals are exposed to Chinese economic activity, copper benefits from structural investment in electrification and energy infrastructure, whereas iron ore remains more directly dependent on construction and traditional steel-intensive growth.

Outlook: Scarcity and slowing growth create an increasingly difficult balance

The commodity market enters the remainder of the year facing two potentially conflicting forces. Persistent energy supply constraints continue to support crude, diesel and natural gas prices, while weaker risk sentiment, uncertainty surrounding economic growth and speculative liquidation weigh on other sectors.

Gold's resilience suggests that defensive investment demand remains intact, while silver's recovery from its weekly lows offers tentative evidence of renewed investor interest. At the same time, iron ore's continued decline highlights concerns about the industrial outlook.

The longer these disruptions persist, the greater the risk that inflationary pressure from energy eventually contributes to weaker demand elsewhere. For commodities, that points towards continued divergence rather than a broad-based advance, with physical scarcity supporting selected markets even as concerns about growth limit the upside in others.

Related articles/content
15 Oct 2026: Gold and silver: When falling yields stop helping stocks 14 Oct 2026: Recovering Middle East exports fail to ease crude and diesel tightness 12 Oct 2026: Diesel shortages Why the global economy has more to fear than rising petrol prices 12 Oct 2026: COT on forex and commodities - Week to 6 October 2026 9 Oct 2026: Commodity weekly Fuel tightness and gold demand support recovery 8 Oct 2026: Gold caught between surging bond yields and rising fiscal concerns Daily podcasts hosted by John J Hardy can be found here

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15 Oct 2026: Gold and silver: When falling yields stop helping stocks
14 Oct 2026: Recovering Middle East exports fail to ease crude and diesel tightness
12 Oct 2026: Diesel shortages Why the global economy has more to fear than rising petrol prices
12 Oct 2026: COT on forex and commodities - Week to 6 October 2026
9 Oct 2026: Commodity weekly Fuel tightness and gold demand support recovery
8 Oct 2026: Gold caught between surging bond yields and rising fiscal concerns

Daily podcasts hosted by John J Hardy can be found here

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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

Ole Hansen

Head of Commodity Strategy

Saxo Bank

Topics: Commodities Copper Mining Gold Silver Theme - Precious metals Energy (Sector) Soybean Natural Gas Gas Oil Gasoline

UK inflation in focus while Meta and Tesla report as AI and chips face big earnings test: 6 questions for markets in the week ahead

Fri, 16 Oct 2026 10:45:00 Z

Your guide to the trading calendar over the week of 19-23 October

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

Two hot inflation prints from the US but the Fed looks minded to hold rates steady this month and a selloff across the chips-memory-AI hardware complex drove bond yields lower off their multi-year peaks. The key tests this week look to be in the earnings space rather than the macro though we are going to stay attuned to events.

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

Is UK inflation rising more than expected?

September’s inflation data will be a crucial piece of the puzzle for markets looking at whether the Bank of England will raise interest rates in November. Recent comments from a number of Monetary Policy Committee members suggests they are starting to fret over the persistence of higher energy prices feeding second order inflation risks.Stronger GDP data suggests the economy is more resilient than the extremely weak labour market indicates.

However, a rate hike is not a certainty. The MPC has been split recently on hike vs hold and increasingly it looks like governor Andrew Bailey is wielding in effect a casting vote. He said there was “subdued” evidence that higher oil and gas prices were creating a broader inflationary problem and that it’s “early days” to see full effect of energy shock on wider inflation. This echoed deputy governor Sarah Breeden, who said businesses are looking to absorb the energy shock and cut costs rather than increase prices for consumers. Bailey’s comments indicate he’s still keeping his options open, which means this CPI number is of material relevance to the November rate decision. In August, CPI rose to 3.1%, up from 2.9% in July, with a monthly increase of 0.5%. The BoE thinks inflation will top 4% in early 2027, a level it worries starts to feed into second order inflation effects.

Will Meta earnings support the bull market after a tough test for the AI trade?

A wobbly week for US stocks as chipmakers and memory stock felt the heat meets the first real earnings season test this week as Meta Platforms reports after the market close on Wednesday, the first of the giant hyperscalers to deliver third quarter results following the drubbing for chip stocks and rising doubts about the story around financing the AI buildout. Meta stock has surged about 35% from its mid-August lows after launching its Muse AI agent, which it followed up with its frontier model Muse Wonder. CEO Mark Zuckerberg also pledged to maintain AI capital spending at scale. Earnings will be dissected for spending commitments but also critical signs of monetisation of AI. Lately that story got a run out with news Meta is teaming up with Apple to enable Muse to be used on its computers.

On the other side of the AI economy are semiconductor firms Texas Instruments and Lam Research, which are also due to report on Wednesday. Lam shares have sold off sharply in the last week on the broader chip rout, down around 14%, while Texas Instruments have held up better and remain +7% over the last month.

Earnings season kicks into gear more broadly, presenting the broader US equity market with a gut check and test of whether the expected 30% earnings growth is realistic, or whether such a high bar is bound to result in disappointment. Netflix, 3M, AT&T, IBM, Ford, Procter & Gamble, American Express and SLB are among the names to watch.

“Where we’re going, we don’t need roads: Is Tesla converting sales into cash flow?

Doc Musk just unveiled a flying sports car with SpaceX rocket thrusters at a launch event for the long-awaited Tesla Roadster. Musk says the car, which might be available from 2028, won’t "move the needle in a major way financially” for his $1.4tn carmaker. What might move the needle is the company’s Q3 earnings update on Wednesday.

Q3 deliveries declined 2%, dented by a decline in US demand after the White House cancelled a $7,500 tax credit for electric vehicles and ended federal emissions trading schemes that boosted Tesla’s bottom line. But tough comps were a factor – Tesla's sales hit a record in Q3 last year as consumers rushed to purchase EVs before the tax credits expiry. US sales may have been down a third as a result of this mismatch, but European sales have recovered strongly, benefitting from a continent-wide rush for EVs amid surging petrol and diesel costs, offsetting the decline in its home market. But hefty competition is gnawing away at profitability, where auto gross margins have declined to 16.3% from 19.2% in Q1.

Of course, Tesla’s valuation is increasingly built on AI and robots, not on core EV sales, meaning investors will be on the lookout for progress on initiatives such as FSD and robotaxis, humanoid robots and AI. And there’s always the mooted SpaceX tie-up to bear in mind.

What do Barclays Q3 results say about UK banks stocks?

Britain’s leading lenders are facing an increase in the bank surcharge tax in the Budget on 28 October because, at least in part, their profitability has improved markedly in recent years. 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.

Barclays puts this thesis to the test with its Q3 results on Thursday. Solid core earnings momentum is expected to continue though investment banking revenues may be weaker and expenses likely higher. RBC cut its price target on the stock to 525p from 550p while reiterating its 'outperform' rating, as it lowered its 2027 adjusted pre-tax profit forecast by two percentage points. Shares had traded as high as 522p in August but the stock has underperformed since amid concerns about its US exposure and investment banking fee income.

Elsewhere on the FTSE, Bunzl, Aberdeen Group, Rentokil, RELX, Segro and LSEG are among the blue chips reporting earnings this week.

How is luxury demand holding?Kering, Prada, Moncler, Hermes earnings

Bag holders: Once held up as a source of strength, luxury has become a weak spot for European markets amid a multi-year downturn in demand for high-end goods. And for 2026 it’s been an additional drag on the French market, where the CAC 40 has declined around 3% versus a 7% rally for the Stoxx 600. Among the stocks reporting this week Hermes is down about 36% this year, while Kering has tumbled around 28% YTD. Both report on Thursday. EssilorLuxottica has declined 43% YTD and reports on Tuesday. Prada (-12% YTD), Salvatore Ferragamo (-10%) and Moncler (-18%) are also on the tape in the coming days. Weakening demand from China continues to be a big source of pain. And if LVMH is much of a bellwether the outlook is not great – it has just reported a 5% organic decline in sales at its fashion and leather goods division.

How is the global economy doing? PMI releases round out the week

The week ends with a dose of macroeconomic data that will detail how much growth is holding up in the face of the energy shock, inflation and rising bond yields. PMI survey data will be the focus, but also some updates on inflation from the US and Japan. Recent PMI data from the US rekindled the bonfire in the bond market, with the S&P services and manufacturing activity surveys hitting 5-year highs,

On Friday watch for Eurozone HCOB manufacturing & services PMIs; Japan CPI inflation for a read on the Bank of Japan; while in the UK we have the GfK consumer confidence, retail sales and the S&P Global manufacturing & services PMIs. In the US look to theS&P Global composite, manufacturing & services PMIs, University of Michigan consumer sentiment and the inflation expectations survey.

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

Comeback day and a giant sucking sound from Tesla.

Fri, 16 Oct 2026 09:35:00 Z

We now have a more important line in the sand.

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

SAP earnings: buying lower or selling higher, and being paid to wait

Fri, 16 Oct 2026 06:55:00 Z

SAP reports on 21 October 2026 after a 57% rise since July. One investor wants to buy lower, another already owns the shares. How can each name a price and be paid to wait?

Before a results release, options cost more than usual. That premium is what the seller of an option is paid for.

SAP is expected to publish its third-quarter 2026 results on Wednesday 21 October 2026 at 22:05, after the Xetra close (Source: SAP investor relations, as of 15 October 2026). Since its last report in July, the share price has risen about 57%, to EUR 201.55 (Source: Saxo, as of 15 October 2026, 16:43 CEST). Past performance is not indicative of future results.

Results days are rarely quiet for SAP. Over the last eight reports, the shares typically moved about 4.4% the next day. The biggest moves went both ways: up 10.6% in April 2025, and down 16.1% in January 2026, when growth in SAP’s cloud business disappointed (Source: Saxo price data; SAP Q4 2025 quarterly statement). Past performance is not indicative of future results. For investors already holding SAP, or considering a position, options can add structure to a view they already have.

SAP weekly and daily, with the 186 and 220 strikes and the 20 November 2026 expiry marked; the shaded area is the platform's projected price range. Illustrative and educational, not predictive. Past performance is not indicative of future results. Source: SaxoTrader, indicative prices, as of 15 October 2026.

What the options market is pricing

Option prices show how big a move the market expects. Adding the price of the at-the-money call to the price of the at-the-money put for the first expiry after the report, and comparing the total with the share price, gives a rough estimate. For SAP, that points to a move of about 7.5% in either direction, almost twice its usual reaction. (We used the US-listed SAP shares, which have an option expiring two days after the report: call USD 8.85 plus put USD 8.05 makes USD 16.90, on a share price of USD 226.28. Source: Saxo, indicative prices, as of 15 October 2026, 16:43 CEST.)

On the Xetra price, that is a range of roughly EUR 186 to EUR 217. Both examples below put their strike at or just beyond the edges of that range.

Part of every SAP option’s price right now is a payment for the uncertainty of the report. Once the numbers are out, that part usually disappears, even if the share price barely moves. Traders call this IV crush. The seller of an option collects that extra payment up front. In return, the seller carries the risk of a big move, like the 16.1% fall in January 2026. Future outcomes are uncertain and may result in losses; options carry a high risk of rapid loss and are not suitable for every investor.

Why the 20 November expiry

The examples use the standard monthly SAP options on Eurex, expiring Friday 20 November 2026: 100 shares per contract, priced in EUR, American-style. A weekly Eurex expiry on 23 October exists, but on 15 October its puts showed no open interest and quotes that did not reflect a results week (Source: Saxo). November has open interest at both strikes, and shares held on Xetra are covered with Eurex options, not US ones. The trade-off is an extra month of ordinary risk, alongside a month of time decay (theta, the small amount an option loses each day, which works for the seller).

For the investor who wants to buy SAP lower: a cash-secured put at 186

Selling a cash-secured put means agreeing to buy 100 shares at the strike if SAP is below it at expiry, in exchange for a premium collected today, with the cash set aside. The view behind it: SAP is worth owning, but not at EUR 201 after a 57% run.

Hypothetical, for education only. Not advice or a trade recommendation.

Example structure (illustrative only - not a trade recommendation)

Sell 1 SAP 20 November 2026 186 put at about 3.87 (bid 3.57, ask 4.18), with SAP at EUR 201.55
Premium received: about EUR 387, against EUR 18,600 of cash set aside
Delta: -0.24, a rough guide to the chance of assignment
Purchase price if assigned: EUR 182.13, about 9.6% below the price at the time
Maximum profit: EUR 387 (hypothetical); maximum loss: EUR 18,213 (hypothetical), if SAP fell to zero
(Source: Saxo, indicative prices, as of 15 October 2026, 16:43 CEST)

Why 186: it sits at the lower edge of the range the options market prices for the report, so a move of the expected size would not take SAP below it. The 16.1% fall in January 2026 would have. If SAP were unchanged the day after the report, we estimate the put could be worth around half of the premium the seller collected, mostly because the payment for the report has gone. For the seller, that drop in price is a gain: buying the put back at that point would keep roughly half the premium, before costs. A big fall in SAP would do the opposite and push the put’s price up (Source: our estimate based on Saxo prices, as of 15 October 2026).

Risk: the EUR 387 is the whole upside, however far SAP rallies. Below EUR 182.13, the loss grows euro for euro, as it would for a shareholder. Options carry a high risk of rapid loss and are not suitable for every investor. Costs apply per contract; see Saxo pricing.

The 186 put in the SaxoTrader trade ticket, with the platform's risk graph, max risk, max profit and break-even. Hypothetical, for education only. Past performance is not indicative of future results; figures are illustrative and not predictive. Source: SaxoTrader, as of 15 October 2026.

For the investor who already holds SAP: a covered call at 220

Selling a covered call means agreeing to sell 100 shares the investor owns at the strike if SAP is above it at expiry, for a premium collected today. The view behind it: after a 57% run, the holder would be content to sell part of the position about 9% higher.

Hypothetical, for education only. Not advice or a trade recommendation.

Example structure (illustrative only - not a trade recommendation)

Own 100 SAP shares; sell 1 SAP 20 November 2026 220 call at about 3.71 (bid 3.38, ask 4.04), with SAP at EUR 201.55
Premium received: about EUR 371, around 1.8% of the EUR 20,155 share value
Delta: 0.27, a rough guide to the chance the shares are called away
Effective sale price if assigned: EUR 223.71, about 11.0% above the price at the time
Maximum profit on the combined position at expiry: about EUR 2,216 (hypothetical), above 220; maximum loss: EUR 19,784 (hypothetical), the share value less the premium, if SAP fell to zero
(Source: Saxo, indicative prices, as of 15 October 2026, 16:43 CEST)

Why 220: it sits above the range the options market prices for the report. Two of the last eight reactions would have carried SAP past it in one session: the 10.6% rise in April 2025 and the 9.3% rise in July 2026.

Risk: the investor retains the full downside risk of holding the shares. The premium received provides a partial offset, but it does not protect against a significant decline in the stock price; a repeat of January’s 16.1% fall would cost about EUR 3,245 on 100 shares, against EUR 371 collected. Upside above EUR 220 is given away until expiry. Options carry a high risk of rapid loss and are not suitable for every investor. Costs apply per contract; see Saxo pricing.

The 220 call in the SaxoTrader trade ticket. The ticket shows the call on its own, which is why it reports unlimited risk: that applies only to a call sold without the shares. Held against 100 SAP shares, a rise above 220 is covered by the shares, and the remaining risk is a fall in the share price. Hypothetical, for education only. Past performance is not indicative of future results; figures are illustrative and not predictive. Source: SaxoTrader, as of 15 October 2026.

And if neither view fits

Both examples assume the investor wants to own SAP at some price. After a 57% rise, a reasonable investor may expect the report to disappoint. In our view the put may not suit that investor: EUR 387 is unlikely to compensate for buying into a falling share. A holder with that view may prefer to trim, or to buy a protective put, which costs money instead of earning it.

The opposite case matters too. A holder who expects another 10% jump gives that jump away with the covered call. Doing nothing is a valid answer too. And these two examples are only a starting point: options offer many other ways to express a view on SAP, from protective puts to spreads that limit both the risk and the reward, each with its own trade-offs.

Before placing the trade, check:

Bid and ask spreads; SAP options on Eurex can be wide, and selling at the bid gives up part of the premium
Open interest at the strike and expiry
The report timing: after the Xetra close on 21 October 2026, so the reaction shows at the open on 22 October
Commission, charged per contract (Source: Saxo listed options commissions)
Whether the cash is genuinely set aside; "cash-secured" is a discipline the investor applies, the platform’s margin requirement may be lower
An exit plan, decided before the report

Assignment risk note: SAP options on Eurex are American-style, so a short option can be assigned before expiry if it moves in the money. Only the seller of an option faces assignment risk.

Final thoughts

The two examples are one idea seen from either side of the holding: the put seller names a lower price to buy at, the call seller a higher price to sell at, and both are paid for the uncertainty the report carries. Either position can be closed before expiry if the view changes.

What neither removes is the size of the move. In our view, selling an option into this report suits only an investor who would be comfortable owning, or still owning, SAP after a day like 29 January 2026. Options carry a high risk of rapid loss and are not suitable for every investor.

Related articles/content
TLT naming your price on long-term bonds and being paid to wait \| 29 Sep 2026 AMD after a ten percent day taking something off the table without selling the shares \| 22 Sep 2026 Finding unusually expensive or cheap options in the Saxo screener \| 18 Sep 2026 Apples record high is a strike price now \| 16 Sep 2026 What IV crush really means in practice reviewed version \| 9 April 2026 Trading earnings with defined \| 31 Mar 2026 -- Front end reprices long end holds - Options Brief - 15 October 2026 Sectors pull apart the index holds - Options Brief - 14 October 2026

Related articles/content

TLT naming your price on long-term bonds and being paid to wait | 29 Sep 2026
AMD after a ten percent day taking something off the table without selling the shares | 22 Sep 2026
Finding unusually expensive or cheap options in the Saxo screener | 18 Sep 2026
Apples record high is a strike price now | 16 Sep 2026

What IV crush really means in practice reviewed version | 9 April 2026
Trading earnings with defined | 31 Mar 2026
--
Front end reprices long end holds - Options Brief - 15 October 2026
Sectors pull apart the index holds - Options Brief - 14 October 2026

More from the author
Koen Hoorelbeke's articles on Saxo Follow and interact with me on X (Twitter) for more intraday content

Koen Hoorelbeke

Investment and Options Strategist

Saxo Bank

Topics: Options Thought Starters Highlighted articles Theme - Crypto and blockchain UKMustRead ESMA Products NOT Mentioned

London Quick Take - 5 Things to Know in Markets Today - 16 Oct

Fri, 16 Oct 2026 06:32:00 Z

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

5 things to know in markets today

1.Dip buyers defend key level for Nasdaq-100

What a weird day...the bulls circled the wagons and kept the campfires burning. They were not prepared to allow the big 'crescendo selloff' to happen, not with rates coming in. The Nasdaq Composite closed up on the day after plunging –1.4% at one point. The Nasdaq-100 closed above its 50-day moving average, over 500pts off its lows of the day. CoreWeave had been obliterated on its debt costs but rallied sharply in the end to finish up 6%. The S&P 500 snapped a three-day losing streak to end 0.3% firmer while the Dow Jones jumped 1%. There was a definite sense of positive rotation rather than broad derisking, and chips held firm in the end after a brutal selloff. The FTSE 100 continued to act as a safe haven with defensives and rate-sensitive sectors benefitting, while the near total absence of anything related to AI meaning there isn’t much to unwind. The blue chips added another 1% to a 5-week high. Shares this morning are off to a bit of a mixed start with stocks in London and Paris backing off a touch while the DAX is pushing up +0.6%. Back on the chips-rebound train, the Kospi rallied 2% but still posted an almost 15% loss for the week.

2.Fed rate hike bets collapse despite hot inflation data

Supporting the rebound in risk sentiment, Federal Reserve chair Kevin Warsh refrained from signalling a rate hike was likely at the central bank’s late October meeting. Speaking at the IMF summit in Bangkok, Warsh said recent inflation data had not swayed his opinion on the US economy, which saw markets scale back bets for a hike this month. Hotter-than-expected CPI inflation data had driven traders to price in back-to-back rate hikes, after the Fed raised the fed funds rate last month for the first time in three years. But his comments saw traders scale back those bets. Combined with pretty dovish comments from some other FOMC members this week it suggests the Fed is minded to stay on hold until December despite two strong inflation prints this week...odds of a hike now down to 15% from as high as 55%.

3.Inflation remains way too hot

Following the slightly hotter-than-expect CPI number, the PPI print was super hot. US producer prices jumped 1.3% in September and rose 6.3% y/y, the fastest pace in more than four years, primarily driven by a 10.8% jump in energy prices. Excluding food and energy, the core index was 5% higher than a year ago, reaching levels last seen in early 2023. Retail sales were solid but maybe weaker than headline gains suggest as inflation did most of the work. Retail sales rose 0.8% on the month, after a revised 1.3% gain in August and above the 0.3% forecast.

4. Bank stocks get hit by Budget report

Comments from the Chancellor about banks in the last day or so suggested windfall taxes were less likely, which supported the FTSE 100 to rally 1% yesterday. Speaking in Bangkok this week at the IMF he said banks are “hardwired into the economic fabric of this country and our future prospects”. Then, to Bloomberg, he described banks as the “jewel in the crown” of the UK economy. A romantic flourish perhaps but one that I suggested did not shout a hike to the bank surcharge is in the offing.

But today bank stocks got the treatment after a report in the Guardian that the Chancellor is now likely to hike the bank levy. Classic Budget rumours...but worth unpicking a bit.

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 although 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. It could be that the Chancellor takes with one hand and gives with another - hike the levy and loosen capital requirements to encourage lending.

5.Unpicking the AI selloff

Back to the AI drama which remains critical to the direction of equity markets...CoreWeave sits at the heart of the debt financing angst. The stock was near its Situational Awareness lows of just above $60 hit in late July but bounced 6% yesterday after a bruising few days. Gartner predicted 80% of neoclouds will be bust by 2030 at the current pace of spending. Aside from CoreWeave, the list of neoclouds includes Digital Ocean, Hut 8 Nebius, IREN, Cipher Digital and Applied Digital. This story is more about the cost of financing and the economics of data centre leasing, rather than arguing against AI in the round or the whole investment thesis. Through 2030, Gartner says, AI data centre owners would need to generate a cumulative $8.5 trillion in revenue to cover announced capital spending, financing costs, and a 12% return on invested capital (ROIC), but total enterprise and consumer AI revenue is forecast to reach no more than $3.6 trillion. I kind of agree with the bearish thesis on a lot of these stocks but that is not being bearish on AI.

Concerns that enterprise spending won’t justify the buildout hit makers of data centre servers and other backend equipment like Dell, which have benefitted from increased spending on kit by hyperscalers et al. Barclays downgraded Dell, HPE and NetApp, “after a significant run and on enterprise AI timing.”. Analysts at the bank warned that revenue growth for these firms is a bit illusory, noting that “strong enterprise revenues are more of a function of memory costs than a move to enterprise AI at this time.” Dell led the S&P 500 decliners, down about 7%, while HPE also shed 7% and NetApp was –3.4% lower. Coherent, which manufactures components for AI datacentres, was another big faller down 5%.

The memory chip selloff seems way too aggressive if it’s only based on this CXMT China story and oversupply of memory from 2029 on. Of course, it’s also wrapped up in the broader cost-of-capital story but it’s important to note Citi analysts think selloff in memory stocks over global DRAM supply is “overdone” since CXMT is not running the same tech and not about to get ahead of Western counterparts. Nevertheless, Counterpoint Research sees the price of DRAM falling around 23% in 2028 from 2027. Micron, Seagate and Western Digital added to their declines for the week.

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 – Meltdown in AI stocks yields to late recovery - 16 October 2026

Fri, 16 Oct 2026 06:13:00 Z

Market drivers and catalysts

Macro: Producer prices surged on energy while retail sales were flattered by costlier petrol
Equities: Money left the chipmakers and went looking for healthcare, banks and the smaller companies
Volatility: Index volatility unwound the inflation spike while rates volatility pushed the other way
Digital Assets: Listed crypto shares bounced back sharply even as the tokens themselves barely moved
Commodities: Commodities steady as oil supply risks linger and gold attempts a recovery
Fixed Income: US yields dropped sharply Thursday, found lows after release of hot PPI inflation data before rebounding.
Currencies: US dollar modestly weaker , sterling outperforms

Macro

US producer prices jumped 1.3% month on month in September, the largest rise since March 2022 and well above the 0.5% forecast. A 10.8% rise in energy was cited as the largest contributor, with higher transport, trade and food costs alongside. Core producer prices rose 0.7%, while the annual rate climbed to 6.3%, the highest since December 2022.
Retail sales rose 0.8% on the month, after a revised 1.3% gain in August and above the 0.3% forecast. The composition was narrower than the headline: a 6.4% jump at petrol stations, coinciding with higher fuel prices, accounted for most of it, sales excluding fuel rose 0.2%, and the control group used for GDP added just 0.1% after 1.2% in August.
The survey data softened. The Philadelphia Fed manufacturing index fell to 20.9 in October from 37.8, below expectations and the weakest reading since June, with new orders, shipments and employment all slowing while staying positive. Jobless claims rose 1,000 to 199,000 in the week to 10 October, just under forecast, and continuing claims fell to 1,710,000.

More in our Macro Analysis & Macroeconomic News

Macro calendar highlights (times in GMT)

1215 – Canada Sep. Housing Starts
1230 – US Sep. Import and Export Price Indices
1315 – US Sep. Industrial Production

Earnings events

Today: Investor AB, Truist Financial

Next week’s highlights

Monday: Fifth Third Bancorp, Steel Dynamics
Tuesday: GE Aerospace, Netflix, RTX Corporation, ABB Ltd, Intuitive Surgical, Chubb, Capital One, 3M Company, General Motors, Northrop Grumman, United Airlines
Wednesday: Meta, Tesla, Lam Research, Philip Morris, SAP, Thermo Fisher Scientific, Texas Instruments, IBM, Abbott Laboratories, NextEra Energy, AT&T, Iberdrola, Danaher
Thursday: Procter & Gamble, Gilead Sciences, Union Pacific, Western Digital, Valero Energy, Blackstone, Newmont, Lockheed Martin, Spotify, Atlas Copco
Friday: ExxonMobil, American Express, Eni S.p.A, SLB

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

Equities

US. The S&P 500 snapped a three-day losing streak, closing 0.33% higher at 7,744.06, while the Dow outperformed with a 1.08% gain to 52,183.23 and the Nasdaq 100 pared a steep intraday loss to finish at 29,935.59, down 0.05%. In our view breadth was broader than the headline suggests: the equal-weighted S&P rose 1.36% and the Russell 2000 1.38%. The session was characterised by a rotation out of AI and chip names into healthcare, financials and materials. Nvidia fell 1.84%, AMD 1.50% and Tesla 1.29%, with the semiconductor ETF down 1.04%, while healthcare gained 1.86%, financials 1.38% and retail 3.68%. Microsoft was a rare large-cap gainer, up 1.08%. CoreWeave rebounded about 5% after comments from Nvidia's chief executive on its financial health, and BNY Mellon added 3.2% and Marsh McLennan 4.6%, both having reported earnings beats. After the close Interactive Brokers beat, at USD 0.69 against USD 0.67 expected on revenue of USD 1.91 billion, and raised its dividend, though the shares traded about 2% lower.
Europe. European equities were resilient despite the global chip selloff. The Stoxx 600 rose 0.38% to 640.17, led by healthcare, with AstraZeneca up 3.2% and Barry Callebaut 7.7%. The FTSE 100 climbed 1.1% to around 10,840, with banks firmer after comments from the UK Chancellor that were read as making a windfall tax less likely. The CAC 40 added 0.78% to 7,934.70 and the DAX 0.33% to 25,382.62, while the Euro Stoxx 50 slipped 0.36%. Chipmakers were hit hard, ASML down 5.7%, ASM International 8.6% and Infineon 8.0%. Ericsson surged about 11% after beating on sales and profit.
Asia. Asian equities are broadly recovering this morning. The Kospi leads, up 4.11% to 5,782.62, with Samsung Electronics and SK Hynix steadying after Thursday's session, when the index fell as much as 6.5% amid concern over AI spending. The Nikkei 225 is up 1.80% to 65,584.61 and the Hang Seng 1.21% to 24,353.70, with Hang Seng Tech adding 2.16%. The CSI 300 rose 0.75% and Australia's ASX 200 1.11%. Taiwan's Taiex had fallen 3.4% on Thursday, its sixth-largest one-day point decline, with TSMC the main drag.

More in our Equity Trading - Stock Market Analysis & News

Volatility

Hot producer prices were followed by a Treasury rally, and index volatility eased. VIX fell 2.43% to 16.46 and the nine-day measure 4.25% to 13.97, unwinding most of Wednesday's spike, while one-day volatility held at 13.90. VVIX slipped 1.99% to 92.57.
The curve stayed in contango from 13.97 out to 21.77 at one year, and SKEW rose 2.00% to 160.45. Rates volatility went the other way, MOVE up 3.45% to 102.50. SPX options imply 41.65 points, 0.54%, for today's expiry and 100.25 points, 1.29%, into 23 October. The 28 October Fed decision is the next catalyst.

More in our Options Trading - Stock Market Analysis & News

Digital Assets

BITCOIN ~82,089 -0.05% | ETHEREUM ~2,438 -0.06% | IBIT 46.59 +0.76% | ETHA 55.41 +0.95% | AS OF ~06:00 CET

Bitcoin trades near $82,000, unchanged on the week and 35% below the October 2025 high of $126,210. Ether holds below $2,511, with $2,400 the base and $2,600 the reclaim that opens $2,700. A $771m liquidation cluster over 72 hours cleared leverage rather than spot, and large holders rebuilt below $81,000 while retail sold.
Spot Bitcoin ETFs stand at net outflows of $386.3m for October, though IBIT concentration means a single allocator flips the category's daily sign - one session saw $207.7m leave that fund alone. Support runs $81,500, the ETF cost basis, then $80,000. Fear & Greed reads 56, down from 82 in August.

Commodities

BCOM: The Bloomberg Commodity Index trades unchanged on the week but remains 35% higher year-to-date, with pockets of strength in energy and soft commodities offsetting broader losses elsewhere. EU natural gas, sugar and WTI crude are among the top performers, all gaining more than 4%, while losses are led by silver, platinum, gasoline and soybeans.
Oil: Brent is heading for a second consecutive, albeit modest, weekly gain as Middle East supply risks continue to linger amid ongoing attacks on ships in and around the Strait of Hormuz. The IEA has pledged to complete the release of the remaining 100 million barrels under the March agreement in an effort to contain elevated fuel prices, particularly diesel. Brent holds above USD 105 per barrel and is on course to record its narrowest weekly trading range since early July.
Metals: Gold trades higher for a second consecutive day as it attempts to break the downtrend that has prevailed since August. Hotter-than-expected consumer and producer inflation readings have failed to trigger renewed selling, with the rebound instead supported by falling bond yields, a softer dollar and a midweek wobble in equity markets, particularly technology stocks. The price resilience despite inflation surprises suggests that broader risk sentiment and shifting expectations for monetary policy are increasingly influencing investor demand. Key resistance remains around USD 4,235, a level breached during the late-September sell-off and one that gold needs to reclaim to strengthen the case for a more sustained recovery.

More in our Commodity News, Analysis & Commentary

Fixed Income

US treasury yields fell sharply Thursday despite on the strong bid for treasuries despite Wednesday’s hot US September CPI number, finding a low intraday Thursday around the release of a higher than expected PPI (see above). The benchmark 10-year yield bottomed out below 5.04% before rising back above 5.08% by early Friday, still down some 12 basis points from the levels mid-week before the US CPI data release. At the front of the yield curve, the benchmark 2-year yield is steadier near 4.75%, down around five basis points from levels before the inflation releases as odds for an October 28 FOMC rate hike have dropped back to 15%.
US high yield bonds found support Thursday as the Bloomberg index we track of the spread between high yield bonds and US treasuries tightened three basis points to 321 basis points after Wednesday’s six-month high.

Currencies

The US dollar weakened slightly, especially early Friday as USDJPY rolled back below 158.00 after squeezing back above that level late Thursday. EURUSD is steady in the 1.1220 area after finding resistance at the six-day high early Thursday and again early Friday near the 1.1240 area. GBPUSD firmed to the 1.3300 area and posted a two-week high as sterling outperforms the single currency.
Elsewhere, while AUDUSD recovered from its local lows on a turn in risk sentiment and weaker US dollar, AUD underperformed NZD as AUDNZD posted a new 1-month low below 1.2295 on the follow-on reaction to Australia’s weak jobs report Thursday.

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

Saxo Bank

Asia Market Quick Take – 16 October, 2026

Fri, 16 Oct 2026 01:00:00 Z

Asia Market Quick Take – 16 October, 2026

Key points:

Macro: US PPI and retails sales hotter than expected
Equities: SP500 snaps 3 day losing streak; TSMC lower post earnings.
FX: USD slumped on bond rally; AUD weakened, Asia FX underperformed
Commodities: Precious metals recover while oil remains elevated
Fixed income: US Treasuries rally; curve bull flattens

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Disclaimer: Past performance does not indicate future performance.

Macro:

US producer prices jumped 1.3% month-on-month in September 2026, the biggest rise since March 2022 and well above the 0.5% forecast, driven by a 10.8% surge in energy and higher transport, trade, and food costs. Core PPI rose 0.7%, while annual PPI climbed 6.3%, the highest since December 2022.
US retail sales rose 0.8% month-on-month in September 2026, after a revised 1.3% gain in August and above the 0.3% forecast, largely driven by a 6.4% jump at gasoline stations on higher prices. Excluding gas, sales were up 0.2%. Control-group sales used for GDP rose 0.1%, after 1.2% in August.
Stronger Canadian manufacturing data boosted bets on a Bank of Canada rate hike. Manufacturing sales rose 1.5% in August 2026 to C$79.9 billion, beating the 1.1% forecast, but the economy showed signs of cooling as employment fell by 68,300 versus expectations for a 7,000 gain, amid ongoing US–Canada trade uncertainty.
US jobless claims rose by 1,000 to 199,000 in the week ending October 10, 2026, just below the 200,000 forecast. Continuing claims fell by 4,000 to 1,710,000, near recent lows, underscoring a still-strong labor market. Federal employee initial claims rose by 68 to 463.
The Philadelphia Fed Manufacturing Index fell to 20.9 in October 2026 from 37.8, below expectations and the weakest growth since June. New orders, shipments, and employment all slowed but stayed positive, while prices paid and received continued to indicate rising prices. Firms remained optimistic, though most future indicators softened.

Equities:

US: S&P 500 snapped a three-day losing streak on Thursday, closing up 0.3% at 7,744. The Dow Jones Industrial Average outperformed, rising 1.1%, while the Nasdaq 100 pared a steep intraday loss of 1.8% to close roughly flat. The session was characterised by a rotation out of AI and chip names — Nvidia fell ~2%, Tesla -1.6% — into healthcare, financials and materials. Coreweave rebounded after 9.5% drop to close 5% higher after Jensen Huang says financial health is improving. BNY Mellon (+3.2%) and Marsh McLennan (+4.6%) were notable gainers on earnings beats. TSMC closed 1.8% lower despite Q3 results coming in better than expected with net profit growing 68.7% yoy and operating margin 58.7%, above estimates.
EU: European equities showed resilience on Thursday despite the global chip rout. The Stoxx 600 rose 0.4% to 640.16, led by healthcare; AstraZeneca gained 3.2% and Barry Callebaut surged 7.7%. The FTSE 100 climbed 1.1% to 10,840, boosted by banks after UK Chancellor comments suggested the sector may avoid a windfall tax. The CAC 40 rose 0.8% to 7,934.70, and the DAX gained 0.3% to 25,382. The Euro Stoxx 50 underperformed, falling 0.4% to 6,168. European chip stocks were hit hard — ASML fell 5.7%, ASM International -8.6%, and Infineon -8.0% — as Anthropic's results added to AI slowdown fears. Ericsson surged ~11% after beating sales and profit estimates.
Asia: Asian equities are broadly recovering this morning, tracking Thursday's Wall Street rebound. The MSCI Asia Pacific Index is up ~0.6%, led by South Korea. The Kospi is up 1.6% to 5,644 as chip stocks Samsung Electronics and SK Hynix edge higher after Thursday's brutal session, when the Kospi had plunged as much as 6.5% on AI spending fears. The Nikkei 225 closed Thursday's session at 64,426, with the Topix up ~1.5% this morning. The Hang Seng closed Thursday at 24,063, with China's Shanghai Composite falling 1.6% and the ChiNext dropping 2.9% on Thursday amid the tech selloff. The STI fell 0.4% to 5,403.50 on Thursday as the chip rout weighed on Singapore. Taiwan's Taiex dropped 3.4% on Thursday — its sixth-largest one-day point decline — dragged by TSMC, whose ADRs slipped 1.8% despite a better-than-expected Q4 revenue outlook of up to $54.3bn. Australia's ASX 200 is up ~1% this morning at 8,805.

FX:

USD had its weakest day in over a month on Thursday, with the Bloomberg Dollar Spot Index down 0.3% as AI-related worries sparked a bond rally and drove 10‑year Treasury yields to 5.05%.
NOK edged out the CHF to register the best performance among 14 major currencies, gaining 0.41% against the USD.
AUDUSD fell as much as 1.1% intraday to 0.6894 — its lowest since July 2 — before settling at 0.6921. The selloff was driven by weaker-than-expected Australian jobs data, which prompted traders to trim RBA rate hike expectations, compounded by the broader tech stock rout.
USDJPY edged down to 158.00, though the yen was actually the worst performer among 14 major currencies as of the Asian session, before recovering ground later in the day.
USDCNH edged up as the dollar fell broadly. The PBOC set Thursday's fixing at 6.7253 per dollar, slightly weaker than Wednesday's 6.7249.
Emerging Markets Taiwan dollar & South Korean won: Underperformed sharply as the semiconductor stock selloff spilled into Asian FX markets — TWD fell as much as 0.8%, KRW as much as 1%.

Commodities:

Spot gold is trading at $4,154/oz, down ~0.4% on the day, consolidating after slumping on Wednesday when the hot September CPI print reignited Fed rate hike bets. The precious metal remains sensitive to the trajectory of real yields, which fell ~10bps on Thursday as the AI-driven equity selloff sparked a flight to Treasuries.
Oil was set for a second weekly advance as Middle East supply risks outweighed a fresh release of emergency reserves; Brent near $106 (up ~1% w/w) and WTI around $97, amid heightened uncertainty over Persian Gulf flows after US Central Command said the sunk ship was hit by an Iranian projectile.
LME 3-month copper is at $14,347/ton, flat on the day, after falling for a third consecutive session on Wednesday as the hot US inflation print spurred bets on more aggressive Fed tightening. Europe's top copper producer Aurubis has flagged tight market conditions, reportedly offering a record premium of $347/ton for 2027 supply contracts.

Fixed income:

Treasuries staged a significant rally as the AI-driven equity selloff triggered a flight-to-quality bid. The 10-year yield fell as much as 15bps intraday to a three-week low of ~5.04%, while the 30-year fell ~13bps. The move was amplified by a large block trade in Ultra-long bond futures ($720k/DV01) and CTA short-covering flows. Yields settled: 2-year at 4.77%, 10-year at 5.09%, and 30-year at 5.42%.
Investors liquidated two Treasury option bets targeting higher yields at a combined loss of nearly $18 million. The trades — initiated on Tuesday as CPI hedges — were unwound as Treasuries surged immediately after the equity selloff deepened, underscoring the speed of the rates reversal.
The rally extended to European government bonds, with the 10-year Bund yield hitting an intraday low of 3.35%, its lowest in more than five weeks, as risk aversion outweighed the prior day's inflation shock. Falling oil prices also supported the move lower in yields across the eurozone.

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.

APAC Research

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Front end reprices, long end holds - Options Brief - 15 October 2026

Thu, 15 Oct 2026 11:30:00 Z

One-day volatility rose a third while the one-year measure barely moved, and five of six markets have already spent the range priced for the whole week. The question is which end of the curve has it wrong.

One-day volatility rose a third, the one-year measure one percent.

MARKET REGIME: TRANSITIONING | VIX 16.87 | TERM STRUCTURE: CONTANGO | SKEW: ELEVATED (157.30) | FRONT-MONTH VIX FUTURES: 17.68

Key findings

The repricing happened at the front and almost nowhere else. VIX1D rose 31.62% to 14.11 while the one-year measure added 1.29% to 21.94.
Far downside protection has not been dearer in our records. SKEW closed at 157.30, above all 60 previous sessions in the store.
The week’s priced range is already spent. Five of six markets have travelled more than 100% of it with one session left; the Nasdaq 100 fund 180%.
Widest earnings premium against own history: Novartis at 1.4x, Meta at 0.5x.

Headline driver

September consumer prices reaccelerated. Headline inflation rose to 3.7% from 3.4%, above the 3.6% expected, energy-led, with core at 2.6%. Pricing for a 28 October Federal Reserve increase spiked above 50% intraday, then eased below 30% to finish lower than the day before.

Two markets read it differently. Equities sold the print and kept selling, the S&P 500 taking its worst session since late July, ending its longest run without a one percent decline in over six years. Overnight Korea’s Kospi fell 8.02% and trading was halted. Treasuries took it back in full: the 2-year yield rose as much as 16 basis points and the 10-year 12 before both reversed, ending at a three-week low.

In our view that disagreement, not the print, is what the measures below are pricing. Options carry a high risk of rapid loss and are not suitable for every investor.

Market snapshot

Levels are as of the 06:00 CET snapshot on 15 October 2026. US and European figures are the Wednesday 14 October close; Asian figures are Thursday’s session.

US (Wednesday 14 October close): S&P 500 7,718.94, down 1.11%. Nasdaq 100 29,950.82, down 2.02%. Dow 51,626.17, down 0.09%. Russell 2000 down 1.93%, over 10% below its August peak. The equal-weighted S&P fell 0.59%, a third of the headline index, so the weight sat in the large names. Semiconductors fell 3.98%, software 3.00%, technology 2.98%; healthcare rose 2.53%.
Europe (Wednesday 14 October close): Stoxx Europe 600 up 0.43% to 637.76, Euro Stoxx 50 up 0.38%, DAX up 0.15% and the Swiss market 1.45% higher. Europe sat it out.
Asia (Thursday session): Kospi down 8.02% to 5,527.12 with trading halted, Nikkei 225 down 5.13%, Hang Seng 1.47% and its technology sub-index 2.94%, CSI 300 2.00%.
Commodities and rates: Brent eased to 104.29 and WTI to 94.09. Gold futures are 1.45% higher at 4,167.3, recovering most of Wednesday’s post-print fall; the gold fund closed 1.49% lower and silver’s 6.11%. Treasury yields spiked then fully reversed: the 10-year sits at 5.098%, 9.6 basis points below Wednesday’s close and a three-week low, the 2-year at 4.711% and the 30-year 5.450%.
Market regime: Transitioning. VIX 16.87, 20-day realised volatility 10.04%, stable, the index within 0.15% of its 50-day average.

Past performance is not indicative of future results. Source: Saxo, Bloomberg, CBOE.

Volatility surface

The cash curve against the previous session, over each tenor’s 60-session range, with the one-session change across every measure on the board. Source: Saxo, Bloomberg, CBOE.

The curve rotated around its back end. VIX1D rose 3.39 points to 14.11 and the nine-day measure 2.60 to 14.59, the 30-day 1.60 to 16.87, the three-month 0.83, the six-month 0.57 and the one-year 0.28. A board that moves by a third at one day and one percent at one year has repriced a window, not a view. In proportion though: both front tenors are still below spot, so the front is catching up rather than inverting.

Ratios. VIX3M/VIX fell to 1.11 from 1.18, flatter but still contango. VXN/VIX eased to 1.35 from 1.38: the Nasdaq premium narrowed even though the Nasdaq fell twice as far as the index, because broad index volatility caught up rather than because technology calmed.

VIX futures. The 21 October option expiry gives a parity forward of 17.68, consistent to 0.05 across the five nearest strikes, a premium to spot of 0.81 points. The feed’s continuous series reads 18.55 and does not reconcile against its stored prior, so it has rolled and no comparison is drawn from it.

Rates. The bond volatility measure eased 2.01% to 99.07, the one part of the board that fell on an inflation day. A yield move that round-trips inside a session leaves the forward price of volatility lower, which is what it did.

Single-name volatility

Saxo’s one-year implied-volatility ranks, read at Wednesday’s close across 187 US names, show the quiet tail emptying rather than the top extending.

The move was in the floor, not the ceiling. The median rank rose to 44.6 from 42.7 on exactly the same 187 names, so the comparison needs no caveat. Underneath it, names below rank 20 fell from 19.3% to 12.8% of the set while names above 70 grew from 11.8% to 13.9%. A session that lifts the bottom third is a broad repricing.
Europe did not participate. Across 337 euro-zone names, also an identical set, the median rank was 47.0 against 47.4, and the share below rank 20 rose slightly. The single-name readings match what the cash indices did on each side of the Atlantic.
The semiconductor move was mostly not semiconductor-specific. Rank rose 7.1 points for the broad market fund, 7.1 for the semiconductor fund and 7.4 for its peer, all in line. Only Nvidia stands apart at 16.5 points, and part of that is its front expiry rolling from 14 to 16 October rather than demand.

Past performance is not indicative of future results. Source: Saxo.

Options flow sentiment

Based on end-of-day 14 October - yesterday’s positioning, not today’s price action.

Single-name flow leaned to calls on headline premium, but the largest lines were calendar rolls, straddle legs and deep in-the-money rolls whose net cash was close to zero.
Sector and ETF flow was horizon extension: protection rolled further out at similar moneyness, with near-dated premium sold rather than bought.

Worth stating plainly: the flow does not evidence the front-end shock the screen shows. Desks lengthened horizon and sold the front on the session the front repriced. Treat it as neutral.

Where the week's range sits

The range the option market priced for this week around Friday 9 October’s close, with the nearest listed strike at each bound and the Wednesday 14 October close as the marker. Figures are at-the-money straddles read from the Saxo chain at Friday’s close and centred on put-call parity. Illustrative only, not a trade recommendation. Source: Saxo, Bloomberg, CBOE.

Three sessions in, five of the six rows sit outside the range priced for the whole week. The Nasdaq 100 fund has travelled 180% of its 12.42-point range, energy 156%, the VIX 134%, the S&P 500 112% and gold 106%. Only bitcoin’s fund is still inside, at 20%.

Tuesday’s edition described a market whose parts were moving against each other while the index stood still. One session later the index has gone with them. A week whose budget is spent by Wednesday leaves Friday’s expiry pricing a range the market has already shown it can cover in an afternoon.

Options carry a high risk of rapid loss and are not suitable for every investor. Costs and charges apply and vary by account and venue; check the rates applicable to you before entering any position.

Today's catalysts

September producer prices, retail sales and weekly jobless claims at 14:30 CET, the session’s event and the next read on whether the inflation reacceleration is broad or energy-led.
TSMC reports before the US open, the first large semiconductor result since the selloff began, with Charles Schwab, Interactive Brokers and Prologis alongside it.
Also today: the delayed US crude inventory report, after an industry estimate showed a draw of 11.1 million barrels.
Fed speakers at 16:00 and 22:30 CET, ahead of the 28 October decision that intraday pricing briefly put above 50% for an increase before settling below 30%.

Earnings scorecard

Option-implied expected move for each report day against the average move after the last eight reports, with implied-volatility rank and last close, as of 15 October 2026. Illustrative only, not a trade recommendation. Source: Saxo, Bloomberg, CBOE.

Two of seven exceeded what was priced. Citigroup fell 5.6% against 3.4% and Bank of America 4.8% against 2.9%, both 1.6x. Goldman Sachs, JPMorgan, Wells Fargo, ASML and Morgan Stanley all moved inside.
The widest premiums against own history are in European healthcare and banking. Novartis prices 3.0% against a 2.1% average, 1.4x, and UBS 3.7% against 3.1% at 1.2x. At the other end Roche prices 0.4% against 2.6% and Meta 3.7% against 7.4%.
Rank and event premium answer different questions. TSMC reports this morning with an implied-volatility rank of 8, near the bottom of its year, pricing 3.6%, exactly its eight-report average. Netflix carries a rank of 75 and prices 8.3% against a 7.1% average. Rank measures the level against the name’s own past; the expected move, what one day costs.
Next up: Netflix on 20 October, SAP and Tesla on 21, Nestle and Roche on 22.

Options carry a high risk of rapid loss and are not suitable for every investor. Costs and charges apply and vary by account and venue; check the rates applicable to you before entering any position.

What the market is pricing

Session implied range: today’s expiry prices 47.65 index points, or 0.62%, centred on a parity forward of 7,717.25. Yesterday’s was 39.7 points, or 0.51%.
Event implied range: Friday’s expiry prices 65.05 points, or 0.84%. A session earlier it priced 65.3 points with one more session to run, where decay alone leaves about 53.3. Roughly 11.7 points went in beyond what the clock explains, so implied volatility rose through the print rather than bleeding out after it.
Tail risk signal: SKEW at 157.30 is the highest in our stored series, above all 60 previous sessions: far downside protection got dearer on a day the 30-day measure added only 1.60 points.
Correlation read: three-month implied correlation rose 9.31% to 12.80, near the top of its three-month range, still low outright, while dispersion was flat at 36.60. Correlation up with dispersion flat is a common shock, not a rotation.

In our view the open question is which end of the curve is wrong. The front has paid for one number; the back has barely moved, and SKEW says the protection bought is far out of the money. Today’s producer price data is the next test.

Related articles/content
Sectors pull apart the index holds - Options Brief - 14 October 2026 Seoul broke the index did not - Options Brief - 13 October 2026 The middle got cheaper the edge did not - Options Brief - 12 October 2026 -- Market Quick Take - Risk sentiment crumbling US treasuries a safe haven - 15 October 2026 Market Quick Take - Chip stocks steady in Asia before US inflation - 14 October 2026

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Koen Hoorelbeke

Investment and Options Strategist

Saxo Bank

That was ugly, but are we just getting started?

Thu, 15 Oct 2026 11:15:00 Z

Treasuries passed the CPI test.

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

Autumn Budget 2026: Four things we think we know and one we definitely don’t

Thu, 15 Oct 2026 11:01:00 Z

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

The usual pre-Budget rumour mill is in full swing – though perhaps not to the extent it was a year ago when then-Chancellor Rachel Reeves was floating the idea of raising income tax. A lot is unknown – here's 4 things we think we do know so far, and one that seems more unsure than previously.

No extra borrowing

Consistent with my belief that the Chancellor does not want to spook gilt markets at a time of stress across the sovereign fixed income space, the lobby briefing is there will be no additional borrowing in this Budget. This is also consistent with the Chancellor sticking to his self-imposed fiscal rules, which means debt falling as a share of GDP by the end of the parliament in 2029/30.

However, I think the Chancellor is avoiding taking important decisions at the Budget to enable this event to pass off relatively calmly. One, he can follow his predecessor in backloading spending cuts that he has no intention of making and tax hikes to the end of the assessment period, balancing the books with a sleight of hand. The IFS points out that “pencilling in implicit cuts that he has no intention of delivering would make the Budget a work of fiction”. Two, publication of a review of the welfare system is being delayed until after the Budget due to cost concerns. Three, the decision on accepting a timeline to reach spending 3% of GDP is expected to be delayed until next year’s Budget. All this to avoid painful decisions being taken now. Moreover, Burnham’s flagship national care service and pension triple lock reform are all for the next manifesto.

Kicking big decisions down the road is not unique to the Burnham government. However, I think in this case the political backdrop and Burnham’s own agenda mean doing so today is less about political expediency and clinging to credibility than it is about laying the pathway to an early election next year to deliver the mandate Burnham seeks to carry out more radical reforms.

CGT: No equalisation with income tax

There will not be large increases to capital tax gains, with the Chancellor reportedly not considering equalising CGT with income tax as he has been urged to by some cabinet colleagues.

Rachel Reeves hiked CGT rates from 10% and 20% for basic and higher rate taxpayers respectively to 18% and 24%. The annual exempt allowance has also fallen sharply in recent years from £12,300 as recently as 2022/23 to £3,000 today for individuals, and £1,500 for most trusts.

However, a more modest rise in CGT is still a viable option, which would have implications for investors and property. However, various economic modelling suggests raising CGT can lower the overall tax take. The last data we have from the government* indicates the increase to CGT rates since April 2026 leads to a net loss to the Treasury in most years. Notably this shows that that a 10-percentage point increase on the higher rate of CGT reduces revenue collected by £3.6bn by 2028/29. I looked more into CGT here.

Mansion tax: No cut to £1.5mn

Reports suggest Healey has ruled out cutting the ‘mansion tax’ threshold from £2mn to £1.5mn. The levy, first announced by Rachel Reeves last year, will begin in April 2028 and will require homeowners to pay anything from £2,500 a year up to £7,500 for the most expensive properties valued at over £5mn.

Online retailer tax

A crackdown on mainly foreign online sellers is expected to raise around £1bn by making marketplaces like Amazon and eBay responsible for collecting VAT upfront. It’s expected this will used to offset plans to raise the threshold for business rates to exclude around 140,000 small high street shops from business rate, which is expected to cost about £900mn.

And one we still don’t know: banks

There’s been a heap of speculation about raising tax on banks. They've become super profitable and politically they are easy targets, a point I made earlier in this Budget cycle. However, Healey has been sounding less grabby. Speaking in Bangkok this week at the IMF he said banks are “hardwired into the economic fabric of this country and our future prospects”. Then, to Bloomberg, he described banks as the “jewel in the crown” of the UK economy. A romantic flourish perhaps but one that doesn’t shout a hike to the bank surcharge is in the offing.

Updated, Friday 16 Oct: But today bank stocks got the treatment after a report in the Guardian that the Chancellor is now likely to hike the bank levy. Classic Budget rumours...

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

Gold and silver: When falling yields stop helping stocks

Thu, 15 Oct 2026 08:30:00 Z

Key Points:

Treasury yields reverse sharply: A hotter-than-expected US inflation report initially sent yields soaring before a dramatic reversal pushed them below pre-CPI levels.
Tech stocks flash a warning: Their failure to recover as yields declined raises questions about stretched valuations and the sustainability of the equity rally, although two days of weakness do not establish a trend.
Gold finds support despite macro headwinds: Falling real yields and resilient investment demand help gold recover from its post-CPI sell-off, but the technical outlook remains fragile.
Silver continues to underperform: Weakness across industrial metals and a breakout in the gold-silver ratio above 72.60 raise the risk of further underperformance against gold.

A dramatic reversal in Treasuries raises new questions

Wednesday's market gyrations following a hotter-than-expected US inflation report highlighted a potentially important shift in investor sentiment, with implications extending well beyond the bond market. While gold recovered from its initial sell-off as Treasury yields reversed sharply lower, technology stocks failed to respond positively to the decline in borrowing costs. Meanwhile, silver continued to struggle as the risk-off tone spread to industrial metals, driving renewed relative strength in gold.

The September US consumer price index showed headline inflation accelerating to 3.7% from 3.4%, while core inflation rose to 2.6% from 2.4%. The initial market response was predictable. Treasury yields surged as investors reassessed the outlook for Federal Reserve policy, with the two-year yield briefly rising 16 basis points and the ten-year yield jumping 12 basis points. Gold came under immediate pressure, while equities, particularly technology shares, struggled.

What followed was considerably more interesting. As risk sentiment deteriorated, investors rushed back into Treasuries, triggering a dramatic reversal that erased the initial yield spike and pushed yields below their pre-CPI levels. The dollar also lost momentum, with the Bloomberg Dollar Index reversing 0.7% from its post-CPI peak, providing additional support for gold. So far in Thursday's session, the two-year Treasury yield has fallen further to around 4.73%, while the ten-year yield has traded below 5.09%, a three-week low.

The reversal was likely amplified by short covering following a prolonged period of selling in Treasuries, which had left positioning increasingly stretched. However, the accompanying weakness in technology stocks raises a broader question: Are investors becoming more concerned about the sustainability of the equity rally than the immediate outlook for inflation and interest rates?

When lower yields no longer support equities

For much of the recent equity rally, falling bond yields have provided support for growth stocks, particularly technology companies whose elevated valuations depend heavily on expectations of future earnings. Lower yields reduce the discount rate applied to those earnings, making long-duration equities more attractive.

Wednesday's reaction challenged that relationship. Technology stocks failed to recover despite the sharp decline in Treasury yields, suggesting investors may increasingly be questioning earnings expectations, stretched valuations and the enormous capital expenditure commitments supporting the artificial intelligence investment boom.

The distinction between companies generating substantial cash flow and those relying on increasingly expensive financing to fund ambitious expansion plans may become more important. With AI-related investments having contributed significantly to the equity rally, any reassessment of expected returns could have wider implications for risk appetite.

However, one swallow does not make a summer. Two days of weakness in technology stocks, however uncomfortable, do not necessarily signal the beginning of a deeper correction. Profit-taking, stretched positioning and technical adjustments can all produce sharp but temporary setbacks. Nevertheless, the failure of equities to find support from falling yields is a warning signal worth monitoring.

Importantly, falling yields are not always positive for risk assets. When they reflect easing inflation pressures, they can support valuations. When they reflect concerns about growth, earnings or financial stability, the message becomes considerably less reassuring.

Gold caught between macro headwinds and defensive demand

For gold, this changing market dynamic presents both opportunities and challenges. The metal initially suffered as yields and the dollar surged following the CPI release, briefly falling towards its recent low at USD 4,066. However, the subsequent Treasury rally helped bullion recover most of those losses, leaving prices trading around USD 4,150 at the time of writing on Thursday, 15 October.

The recovery highlights the competing forces currently shaping gold's outlook. Short-term macro traders remain highly sensitive to movements in Treasury yields, the dollar and expectations for Federal Reserve policy. While US ten-year real yields have tumbled to 2.72% from just below 3% earlier in the week, they remain elevated by historical standards. Combined with the lingering possibility of renewed monetary tightening, this suggests that gold's macroeconomic headwinds have eased but not disappeared.

At the same time, longer-term investors continue to seek gold exposure as protection against fiscal uncertainty, geopolitical instability and potential turbulence in financial markets. This distinction helps explain why investment demand, particularly through exchange-traded funds, has remained resilient despite the recent correction and elevated yields. Since gold's recent peak on 25 August, bullion-backed ETF holdings have risen by 2.3 million ounces, while speculators have net sold 4.1 million ounces in the futures market.

The technical picture, however, remains challenging. Gold has traded within a downward-sloping channel since August and currently sits below its 21-, 50- and 200-day moving averages, highlighting deteriorating momentum following the sharp correction from earlier highs.

A break above USD 4,175 could signal the beginning of a consolidation phase, while a sustained move above USD 4,235, a level breached during the late-September sell-off, would be needed to improve sentiment among the mentioned short-term momentum traders. Conversely, a break below USD 4,066 would raise the risk of a deeper decline towards USD 4,000, where longer-term trendline support is emerging.

For now, gold remains caught between macro-driven selling and strategic investment demand, with the latter potentially becoming more influential should equity-market confidence deteriorate further.

Silver struggles as gold's monetary appeal dominates

Silver, meanwhile, struggled for traction, partly reflecting broader weakness across industrial metals, with copper heading for a third consecutive daily decline, partly driven by easing concerns over a strike-related supply disruption in Chile. Unlike gold, silver combines monetary and industrial characteristics, leaving it more exposed to concerns about economic growth and industrial demand.

This divergence is currently visible in the gold-silver ratio, which has broken above key resistance around 72.60, now turned support, potentially signalling further silver underperformance. For silver to regain momentum, it may require more than falling Treasury yields. Stabilising equity markets, improving industrial sentiment and renewed physical demand could all be needed to support a more sustainable recovery.

A changing market narrative?

The coming sessions may help determine whether Wednesday's dramatic reversal was primarily a positioning-driven event or an early indication of changing investor priorities.

If yields continue to decline while equities remain under pressure, gold could increasingly benefit from defensive demand, while silver struggles with its industrial exposure. Conversely, a stabilisation in risk sentiment alongside lower yields would likely provide a more supportive environment for both metals, potentially allowing silver to recover some lost ground.

The key distinction is whether falling yields reflect improving inflation prospects or deteriorating confidence in growth and corporate earnings. For gold, a shift towards the latter could gradually move the market's focus away from interest-rate headwinds and towards its role as a portfolio diversifier.

That would not necessarily prevent further short-term volatility or liquidation-driven setbacks. However, it could strengthen gold's relative appeal, particularly against silver, at a time when confidence in the broader equity rally is being tested.

Spot gold keeps finding support below USD 4,100 but overall remains stuck in a downtrend - Source: Saxo | Note: Past performance is not indicative of future results

The gold-silver ratio has broken higher signalling relative gold strength - Source: Saxo

Sharp reversal lower in US real yields eases pressure on gold - Source: Bloomberg and Saxo

Recent divergence between ETF investor demand and speculator selling - Source: Bloomberg and Saxo

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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

Ole Hansen

Head of Commodity Strategy

Saxo Bank

Topics: Commodities Mining Gold Silver Theme - Precious metals Nasdaq

The FX Trader: The USD and risk sentiment - a bit different now?

Thu, 15 Oct 2026 08:20:00 Z

Old correlations are getting scrambled here.

Wild reaction to US CPI data – a USD top in place?
The US dollar and US treasury yields saw a wild reaction to the hot US CPI numbers, which were 0.1% higher than expected for the core month-on-month and year-on-year readings at +0.3% and 2.6%, respectively. The headline rose 0.1% more than expected to 3.7% YoY vs. 3.4% in August. The USD and treasury yields bolted higher on the data, with the benchmark 2-year US treasury yield up over 15 basis points at one point before the move was entirely erased, especially at the long end where the move was not only reversed, but saw the 10-year benchmark treasury yield, for example, crushed to a lower close on the day and lower still overnight, hitting below 5.10% for the first time in over a month. The US dollar likewise reversed, if with a bit less amplitude in relative terms, especially in USDJPY (more on that below). The reversal is particularly powerful as it unfolded at a new cycle high for the US dollar, though its magnitude is still rather modest relative to the massive rise in the currency over the last several weeks.

Takeaway: Yesterday’s action so far looks like a key reversal for the US dollar, given that we have the most important data point (the CPI) delivering a supportive print, but then the greenback and US yields reversing heavily after the initial reaction. Looking forward, further weak risk sentiment globally may not be supportive for the big dollar – because weaker risk sentiment would inevitably center on the massive portfolio flows linked to US AI stocks – a further mark-down there means a potential exodus and potential exodus from USD-denominated stocks, but it also could mean a far weaker US economy and therefore a massive reversal in Fed policy projections eventually.

Chart focus: EURUSD
EURUSD slipped all the way to 1.1113 after the hot US CPI release yesterday before rallying back as high as 1.1240. It’s a classic one-day reversal, made all the more emphatic by occurring over a key macro event risk that should theoretically have supported the US dollar. Interestingly, it also came within four pips of testing that 50% correction support point and the 200-week moving average. From here, the focus higher could center on the prior range low of 1.1325 and then into the 38.2% Fib retracement near 1.1340, but the bar is quite high for a full reversal, which would require something like the 1.1500 area to come into play and it is far too soon to bring that kind of level into the picture.

Source: Saxo

JPY – what does it take to get more support for the yen?
The JPY behaved directionally as one would expect over and after the US CPI data if we use US treasury yields as our coincident indicator, but we wonder why the JPY couldn’t post an even better performance, given the huge swing in US long yields in particular. Lower risk sentiment and safe haven seeking in bonds was supposed to be the mix most supportive of a stronger JPY comeback, but the move has so far underwhelmed. We need to give the market more time to adjust to a head-spinning move like yesterday’s, but either JPY is mispriced on the weak side here or we need to go back to the drawing board on market drivers.

AUD – weak risk sentiment and weak jobs report.

The Australian dollar was in for a drubbing overnight on the combination of weak global risk sentiment, which also saw pro-cyclical metals prices under pressure, and weak Australia September employment data, with the Unemployment Rate revised up for August to a new post-pandemic high of 4.7% and staying at that level for September (despite a 0.2% drop in the participation rate), while the employment change number for the month was -39k. But there is more going on in the background in Australia as well, as consumer confidence and household finances are feeling the pinch from higher interest rates more quickly than in many other countries as most Australians finance their mortgages on floating rates. Home prices are falling and volumes are falling. Arguably, the recent AUD strength already looked over-stretched relative to interest rate differentials in a cross like AUDNZD and the reversal overnight could mean we have a top in place for the AUD for some time here in many crosses.

Looking ahead

We have US Retail Sales and US PPI for September up today, but hard to imagine that these are directly responsible for fresh drama. It was yesterday’s CPI that set things in motion and now it is about whether global risk sentiment can find its feet here or we are in for a bigger mark-down in risk assets, one that, as we argue above, could prove surprisingly non-supportive for the US dollar. The JPY, EUR and CHF might benefit the most, provided European sovereign yield spreads stay quiet. On that last point, lower yields might throw France a helping hand for now.

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.

A big jolt lower for the AUD (note the hefty negative shift in the 2-day momentum), while we can also see there is a lot more needed to reverse the USD bull run. As well, the positive JPY shift after yesterday’s and today’s global bond market rally is underwhelming at best – but let’s give it another couple of days. Also, after the EURUSD reversal and the EUR putting up a fight in other crosses yesterday, wondering if other G10 currencies might pick up the race to the bottom.

Table: NEW FX Board Trend Scoreboard for individual pairs.

EURSEK has flipped into a negative trend according to our trend definition, but the prior rally there has been so large that a bigger move lower is needed to register a more profound reversal. In other individual pairs, will be watching for whether the EURAUD negative trend is set for a reversal and whether this latest USDJPY “uptrend” status reverses, though that pair has been impossible for both bulls and bears in recent months.

John J. Hardy

Global Head of Macro Strategy

Saxo Bank

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

Market Quick Take - Risk sentiment crumbling. US treasuries a safe haven? - 15 October 2026

Thu, 15 Oct 2026 06:25:00 Z

Market drivers and catalysts

Macro: Risk sentiment suffers as US inflation reaccelerates, triggering wild swings in Treasuries
Equities: A chipmaker rout spread from Wall Street into Korea and Japan overnight
Volatility: Short-dated index volatility repriced sharply higher while the longest tenors barely moved
Digital Assets: Mining shares bore the brunt, with higher rates meeting heavy debt loads
Commodities: Oil steadies despite demand concerns; gold rebounds as silver struggles
Fixed Income: US Treasuries see wild session, selling off on hot US CPI data before strong demand entirely reverses move and sends yields sharply lower.
Currencies: US dollar tracks US treasury yields as rally to new cycle high on CPI later erased

Macro

US inflation reaccelerated in September. Headline CPI rose to 3.7% year on year from 3.4%, above the 3.6% forecast, with the monthly print at 0.6%. Energy did most of the work: gasoline rose 34.2% year on year and 9.1% on the month, and fuel oil 74.2%. Shelter climbed to 3.2% while food eased to 2.5%. Core inflation increased to 2.6%, with monthly core steady at 0.3%.
Pricing for a Federal Reserve hike at the 28 October FOMC fell slightly by the end of the day Wednesday after the wild pump and dump in US treasury yields on the September US CPI release. Implied odds briefly spiked above 50% intraday before easing back below 30%, a slight drop from the prior day. San Francisco Fed president Mary Daly said further increases were likely needed but that there was no urgency to decide this month.
German wholesale prices rose 8.7% year on year in September, up from 6.8% and the fastest since February 2023, with mineral oil products up 48.8% and metals 24.9%; the monthly gain of 1.9% beat a 0.7% forecast. Japan's core machine orders rose 5.2% on the month in August, reversing July's decline. Australia shed 39,300 jobs in September against an expected 20,000 gain, and unemployment held at 4.7%, the highest since October 2021.
Middle East supply risk may remain live. A container ship sank in the Strait of Hormuz after being hit by unidentified projectiles, alongside Houthi strikes on Saudi Arabia that included a reported hit on Saudi Aramco's headquarters. Russia accused Ukraine of striking two refineries, among them the 400,000 barrel a day Ryazan plant..

More in our Macro Analysis & Macroeconomic News

Macro calendar highlights (times in GMT)

1230 – US Sep. PPI
1230 – US Sep. Retail Sales
1230 – US Weekly Initial Jobless Claims

Fed speakers: Goolsbee (1400), and Hammack (2030)

Earnings events

Thursday: TSMC, Charles Schwab, Interactive Brokers, Prologis

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

Equities

US: Wednesday brought the worst session since late July. The S&P 500 fell 1.11% to 7,718.94, ending its longest run without a 1% decline in more than six years, the Nasdaq 100 dropped 2.02% to 29,950.82, the Dow was little changed at 51,626.17 and the Russell 2000 fell 1.93% into correction territory, more than 10% below its August peak. The Philadelphia Semiconductor Index sank 4.5%, with AMD down 5.73%, Nvidia 3.16% lower and CoreWeave off more than 15%, concern over its AI debt load cited. Bank of America fell 4.8%, weaker trading revenue and a USD 1.2 billion regulatory fine cited, and Morgan Stanley fell 2.75% despite a record IPO haul at its wealth arm. BlackRock beat, with assets under management at USD 15.49 trillion. Healthcare was the one firm sector, its ETF up 2.53%.
Europe: European equities bucked the global move on Wednesday. The Stoxx Europe 600 rose 0.43% to 637.76, its highest close since 29 September, and the Euro Stoxx 50 added 0.38% to 6,190.38. The DAX edged 0.15% higher to 25,298.61, Rheinmetall up 3.1%, while the FTSE 100 advanced 0.7%, with AstraZeneca and Barratt Redrow among the leaders. The Swiss SMI climbed 1.45%, its largest daily gain since July, with Roche and Lonza leading. Rotation into defensive healthcare and food and beverage names coincided with the US inflation print. ASML raised its full-year sales outlook, though the initial gain faded.
Asia: The chipmaker selloff deepened sharply this morning. The Kospi has fallen 8.02% to 5,527.12, a fourth consecutive decline, with Samsung Electronics and SK Hynix each down more than 10%, doubts over the AI trade cited. The Nikkei 225 is 5.13% lower at 64,267.09 after finishing Wednesday near 67,744, and the Hang Seng is down 1.47% at 23,955.59, its technology sub-index 2.94% weaker. The CSI 300 fell 2.00%. HSBC cut its end-2026 targets for the mainland indices by 9% to 15%, tighter global liquidity cited. The Singapore desk had the Kospi 5.7% lower around 03:00 CET.

More in our Equity Trading - Stock Market Analysis & News

Volatility

Spot VIX rose 10.48% to 16.87 on the hot US inflation print, with the front of the curve moving hardest - VIX1D up 31.62% to 14.11 and VIX9D up 21.68% to 14.59, both still below spot. The cash curve holds clean contango from VIX1D at 14.11 out to VIX1Y at 21.94. Demand concentrated in the wings rather than at the money: SKEW sits at 157.30 and VVIX gained 10.62% to 94.45.
Rate volatility moved the other way, MOVE 2.01% lower at 99.07, leaving equity and Treasury options markets priced for different readings of the same CPI. SPXW implies 47.65 points for today's expiry, 0.62%, and 65.05 points into Friday, with producer prices at 14:30 CET.

More in our Options Trading - Stock Market Analysis & News

Digital Assets

BITCOIN ~80,833 -0.95% | ETHEREUM ~2,356 -2.62% | IBIT 46.24 -1.89% | ETHA 54.89 -3.16% | AS OF ~06:00 CET

Bitcoin trades near $81,560, down 2% and roughly 35% below its October 2025 peak, with ether the weaker leg at $2,372 after a 5.27% decline. The inflation print forced $220 million of liquidations across the session against perpetual open interest of $67.7 billion and turnover at 19.2 times spot, though implied volatility eased, DVOL 0.95% lower at 38.75.
Listed names carried more of the move: Cipher fell 12.35% and IREN 12.18% on borrowing costs for debt-funded buildouts, Coinbase 4.90% and Strategy 5.87%. Strategy bought 250 bitcoin at an average $86,194 in the week to 11 October while directing $192.4 million to STRC preferred repurchases. The $85,000 zone has rejected price three times; $81,000 marks the structural cost basis, with $77,200 below it.

Commodities

Oil: Brent trades around USD 105 after falling on Wednesday as concerns over Middle East supply disruptions eased and the IEA raised its forecast for the decline in global oil demand this year to 2.6 million barrels per day, while lowering expectations for next year's rebound. Following several days of Houthi attacks, it remains unclear whether Saudi Arabian oil infrastructure and supply flows have suffered any meaningful setbacks. Meanwhile, the refined product market remains tight and could tighten further after Ukraine told the FT it plans to resume strikes on Russian oil refineries. Ahead of today's delayed EIA inventory report, API data showed an 11-million-barrel draw in US crude stocks, which, if confirmed, would be the largest since June 2025.
Gold trades around USD 4,135, having recovered most of Wednesday's sharp post-CPI losses that briefly pushed prices towards, but not below, the recent low at USD 4,066. The volatile session was driven by sharp swings in US Treasury yields, initially surging on stronger-than-expected inflation before reversing abruptly as traders covered increasingly stretched short Treasury positions amid a sell-off in technology stocks. Key resistance remains around USD 4,235, a level breached during the late-September sell-off.
Silver, meanwhile, continues to struggle for traction, partly weighed down by broader weakness across industrial metals, with copper heading for a third consecutive daily decline. The gold-silver ratio has broken above key resistance around 72.60, now turned support, signalling renewed relative weakness in silver and raising the risk of further underperformance against gold.

More in our Commodity News, Analysis & Commentary

Fixed Income

US treasury yields swung wildly on the release of the hot US September CPI data, first spiking higher and with the yield curve flattening as the benchmark 2-year yield rose as much as 16 basis points before getting crushed lower as weak risk sentiment across the board saw a strong bid in the treasury market, sending yields back to unchanged on the day and then lower still early Thursday. The benchmark 2-year yield is near 4.73%, down five basis points from Wednesday’s starting point. At the longer end of the yield curve, the 10-year treasury yield rose 12 basis points after the US CPI data but then fully erased that moved and then some early Thursday, trading below 5.11%, down more than ten basis points from where it opened the prior day and suddenly at a three-week low.
Japan’s yields dropped heavily Thursday, inspired by the drop in US treasury yields. While the front end of the yield curve was relatively anchored near 1.91% by late trading in Tokyo on Thursday, only down two basis points, longer-dated JGBs saw strong demand, with the benchmark 10-year JGB yield, for example, pushing nearly eight basis points lower to below 2.93%, the lowest in over a month.

Currencies

The US dollar spiked higher to new cycle highs on the release of the hot US CPI numbers, but that moved was fully reversed late Wednesday and into early trading Thursday as EURUSD, for example, bottomed out at 1.1113 Wednesday before rising as high as 1.1240 in Asian trading hours Thursday and then settling back toward 1.1215.
Weak Australian employment data and weak global risk sentiment saw the AUD trading sharply weaker Thursday, testing the lows of the week in AUDUSD despite a weak USD near 0.6950, while AUDNZD tumbled back below 1.2400 from a peak of 1.2494 before the data.
The Japanese yen strengthened versus the US dollar late Wednesday and early Thursday, but was well off its broader intraday highs from early Thursday that were likely inspired by fresh verbal warnings from Finance Minister Katayama, who said she is prepared to take action in the FX market if needed. After USDJPY hit a local intraday high Wednesday on the hot US CPI numbers near 158.90, oit dropped back to as low as 157.60 early Thursday before bounding back toward 157.95. EURJPY bottomed out early Thursday at 176.51 before rising back above 177.00.

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

Saxo Bank

London Quick Take - 5 Things to Know in Markets Today - 15 Oct

Thu, 15 Oct 2026 06:11:00 Z

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

5 things to know in markets today

1.Rout in chip stocks deepens

A rout in tech stocks led by chipmakers deepened Thursday as worries about the AI buildout, bubbly valuations, lower-than-expected earnings growth at leading US frontier labs, Chinese competition, inflation and rates sent investors running for the covers. The super-AI-exposed Kospi tumbled 7.5% to a 6-month low, triggering circuit breakers at one stage with bellwether chip names SK Hynix down –11% and Samsung Electronics –9.5% lower. Tokyo fell nearly 5% with SoftBank down -9%.

This has clearly been building for days and days but Anthropic didn't help, adding to fears about the return on investment from the AI buildout after telling investors Q3 revenue had risen almost 50% to $16.8bn and that it was profitable for a second straight quarter. However, the pace was slower than earlier this year, when revenues doubled between Q1 and Q2, and below some investors’ expectations. Anthropic’s numbers come less than a week after rival lab OpenAI told investors it had hit its $50bn annualised revenue target at the end of September, below the $68bn figure that had been widely reported last month. The missing $18bn did for chip stocks and AI favourites at the time and they’ve not really had a chance to find their footing since.

In a sign of the broad deleveraging, even bumper earnings from TSMC – the world’s largest contract chipmaker – failed to staunch the bloodletting. The Taiwan company posted a sixth consecutive quarter of record earnings, up 68.7% from last year and revenues rising 41%.

2.Tech pulls down Wall Street, NDX below 50-day moving average support

The slide in Asia followed a soft session on Wall Street, with Nasdaq Composite down 1.9% and the Philadelphia Semiconductor Index down for a sixth straight session with Micron –4%, Broadcom & Nvidia both –3% and AMD almost –6%. The Nasdaq-100 fell 2% and touched its 50-day moving average support at 29,862, which just held but futures are trading down this morning. Highest-beta AI stocks were hit especially hard, with CoreWeave –15% and BBG reporting credit default swaps on the firm pricing over 50% chance of default in next five years, just a day after it was talking about tapping insurers’ vast pools of capital to fund AI investment. Nebius –10%, Oracle –9%, Dell –11%. Healthcare and Consumer Defensives rallied along with Energy – almost half the stocks in the S&P 500 rose yesterday, so there is some hurting in long-short trades.

3.FTSE holds up as tech split hits Europe

Broad derisking across the tech space has hit European stock indices this morning, with the DAX off by half a percent and AEX in Amsterdam –1% on ASML weakness. But the tech-less FTSE 100 rose about +0.3%, pretty insulated and benefiting from more rate sensitive sectors picking up the baton. Mining shares are taking a battering though with a slump in iron ore prices overnight in China and copper trading down almost 2% this morning. Antofagasta led the decline down almost 7%, with Anglo American, Rio Tinto and Glencore following suit, down 3-5% in early trade. Polar Capital sank –5% on chips selling off with huge concentration in this space in the fund, while Scottish Mortgage was down about half that much with less direct exposure to some of the memory names in play. Defensives, property and software names rose.

4. Bonds are back in vogue

The selloff across semiconductor stocks has sent bond yields lower, which if it sticks could ultimately support risk sentiment and support valuations. This is two-fold; one a flight to relative safety with the risk-free rate generating 5%, and two, because a breakdown in the AI capex narrative and pullback in spend will shrink the supply of debt, the huge increase of which has been a powerful driver of bond yields moving out to multi-year highs.

Hotter-than-expected inflation data from the US had spiked bond yields before they fell off significantly. The10yr was up about 12bps above 5.3% and 2yr +16bps to 4.93% on the CPI before getting crushed lower as weak risk sentiment across the board saw a strong bid in the Treasury market, sending yields back to unchanged on the day and then lower still early Thursday. The benchmark 2-year yield is near 4.73%, down ~6bps, while the 10yr yield erased all its post-CPI jump and then some more by Thursday, down ~9bps to 5.095% and suddenly at a three-week low.

The CPI print creates a problem for the Fed since it's above where it would ideally like it to be if it is to go slowly. September CPI inflation crossed the Waller Line as the core month-over-month reading hit +0.33% (ie above the +0.2% where it's coming down quick enough on annual basis), for an annual +2.6%. Headline CPI rose +3.7% year-over-year against +3.6% expected as the MoM hit +0.6%. The 3-month annualised rate rose to 3.4% from 2% in August. Meanwhile, German wholesale prices rose 8.7% year on year in September, up from 6.8% and the fastest since February 2023. US producer price inflation data is up today.

5.Good ol' Blighty surprises

Good ol' Blighty: The UK economy expanded by +0.1% in August, ahead of expectations for a contraction but slower than the +0.4% growth in July. Growth estimates for June rose as well as the official data underscores the apparent resilience of Britain’s economy in the face of global headwinds wherever you look for them, defying the energy and inflation shocks that have rattled bond markets. And it’s being done with a contracting labour market, which suggests productivity is improving. Whilst I would caution that labour market weakness remains the single biggest concern for the Bank of England, the underlying strength in the economy makes it more likely the MPC votes to hike rates by 25bps next month.

Sterling trades firmer this morning after the release. GBPUSD tested the 25 June lows at 1.3136 yesterday as the dollar caught a strong tailwind from the jump in Treasury yields post-CPI. But as the risk tone changed and Treasury yields turned course lower the weakness started to creep into USD, lifting sterling and the euro – which traded close to a 200-week moving average yesterday at 1.110 before rallying back above 1.12 this morning.

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

Investor Q&A: AI selloff, hot CPI and what can investors do?

Thu, 15 Oct 2026 04:30:00 Z

Key points:

Good news is no longer enough. Strong AI demand remains intact, but valuations, financing costs and returns on investment are becoming more important.
AI credit risks are in focus. CoreWeave's bond selloff highlights concerns about debt-funded infrastructure expansion, although not all AI companies face the same risks.
Markets are caught between inflation and growth fears. December Fed tightening remains in market expectations, but slowing growth is becoming an increasingly important consideration.
Earnings and portfolio balance matter. Investors may want to focus on cash flows, capital discipline and diversification rather than abandoning structural growth opportunities.

1. AI companies keep delivering good news. Why are stocks still falling?

The AI industry has delivered some extraordinary numbers over recent weeks.

Micron: Fiscal fourth-quarter revenue surged to $54.2 billion, from $11.3 billion a year earlier, reflecting exceptional memory demand.
TSMC: September revenue rose 54.6% year-on-year, confirming continued strength in semiconductor demand.
Samsung: Preliminary third-quarter operating profit increased nearly ninefold from a year earlier, although it fell short of elevated expectations.
ASML: Raised its annual sales guidance, with customers planning equipment orders extending towards 2029 and 2030.
Anthropic: Reported third-quarter revenue of $16.8 billion, up approximately 45% from the previous quarter.
Oracle: Cloud infrastructure revenue increased 121% year-on-year, reflecting accelerating AI computing demand.

These are hardly signs of a collapsing AI industry. Yet technology stocks have struggled to sustain their rally.

The problem is not that demand has disappeared. Investors are increasingly questioning how much future growth is already priced into valuations, how expansion is being financed and when these investments will generate sufficient returns.

This is playing out as we anticipated in our Q4 outlook, “Raise the Bar,” where we highlighted the cost of capital as an increasingly important driver of the AI trade.

For much of the rally, accelerating AI investment was enough to lift almost everything exposed to the theme. Now markets are becoming more demanding about profitability, financing and capital discipline.

2. What is happening with CoreWeave, and why are its bonds under pressure?

CoreWeave has become one of the clearest warning signals in the AI financing market.

Yields on some of the specialist AI cloud provider's bonds have climbed towards 15%, indicating that investors are demanding significantly greater compensation for credit risk.

The concern is that AI infrastructure requires enormous upfront investment in GPUs, data centres, networking and power systems, while the revenues needed to justify these investments may take years to materialise.

CoreWeave has relied heavily on debt to fund rapid expansion, leaving it exposed to higher financing costs and refinancing risks.

The underlying challenges include:

High borrowing costs: New funding becomes more expensive, potentially reducing the returns on infrastructure investments.
GPU depreciation: Rapid technological advances could reduce the economic value of existing equipment supporting loans.
Customer concentration: Dependence on a few major AI customers creates risks if spending or contract terms change.
Cash-flow timing: Infrastructure costs are incurred upfront, while contracted revenues arrive over several years.

CoreWeave has pushed back against concerns about its financial position. CEO Mike Intrator argues that markets misunderstand its business model, highlighting its substantial contracted revenue backlog of approximately $104 billion.

Long-term customer commitments provide meaningful visibility, and elevated bond yields do not necessarily indicate an imminent default.

Nevertheless, the repricing of CoreWeave's debt suggests that investors are becoming less willing to finance AI infrastructure growth at any cost.

3. Could similar financing risks emerge elsewhere in the AI trade?

Yes, although it is important to distinguish between companies facing genuine financing pressures and those whose main vulnerability is elevated valuations.

Several areas of the AI ecosystem deserve closer attention.

Area	Examples	What to watch
Neoclouds	CoreWeave, Nebius	Borrowing costs, GPU depreciation, customer concentration
Data-centre developers	Applied Digital	Construction financing, delayed cash generation
Crypto-to-AI infrastructure	IREN, Core Scientific	Large expansion commitments, project execution
Established cloud providers	Oracle, IBM	Capex intensity, free cash flow, investment returns
AI infrastructure suppliers	Semiconductors, memory, optics, networking	Valuations and dependence on sustained AI spending

These are not equivalent credit risks.

Large technology companies generally have stronger balance sheets, more diversified revenues and greater ability to fund investment internally. Some smaller infrastructure providers also have meaningful cash balances and committed financing.

However, the AI ecosystem is increasingly interconnected. Infrastructure providers depend on financing and large customer contracts, while equipment suppliers depend on their customers continuing to expand capacity.

If higher borrowing costs eventually force some infrastructure providers to moderate spending, the consequences could extend across the supply chain.

There is insufficient evidence of a systemic AI credit crisis. But the financing model behind the infrastructure boom is facing greater scrutiny.

Investors should increasingly distinguish between strong demand, sustainable financing and attractive valuations. They are not necessarily the same thing.

4. Why are Treasury yields and the dollar retreating despite hot US inflation?

September US inflation came in hotter than expected, with headline CPI accelerating to 3.7% year-on-year and core inflation reaching 2.6%.

The initial reaction was predictable: Treasury yields and the dollar rose as investors increased expectations of another Fed rate hike.

But the subsequent retreat in Treasury yields, accompanied by episodes of dollar weakness and strength in the yen and Swiss franc, reflects a competing concern.

Markets are beginning to worry that the Fed may need to tighten policy just as the US economy is losing momentum.

Three forces help explain the shift:

Growth fears are competing with inflation concerns. Higher borrowing costs could weaken consumption, employment and business investment.
Treasuries are regaining safe-haven appeal. Equity weakness is encouraging demand for government bonds, pushing yields lower despite inflation risks.
Currency markets are becoming more sensitive to growth expectations. Lower Treasury yields can weigh on the dollar, while the yen and Swiss franc benefit from defensive flows.

This is a potentially important change in market behaviour.

Earlier in the selloff, higher bond yields were themselves a source of pressure on equities. Now, periods of falling yields alongside weaker stocks suggest investors are also becoming concerned about growth.

However, a sustained Treasury rally is not guaranteed. Sticky inflation, fiscal risks and heavy government borrowing could keep longer-term yields elevated.

The market is caught between two risks: inflation that keeps the Fed restrictive and slowing growth that makes further tightening more dangerous.

5. Will the Fed raise interest rates again in October or December?

Markets continue to anticipate another Fed rate hike in December, but the outlook is becoming increasingly dependent on incoming growth data.

The latest inflation report reinforces the case for keeping monetary policy restrictive. However, signs of slowing growth could complicate the decision, particularly if employment and consumer spending begin to weaken.

Three scenarios matter:

Scenario	Possible Fed response	Market implications
Inflation remains sticky, growth resilient	December hike remains on track, with further tightening possible	Pressure on valuations, long-duration bonds and leveraged companies
Inflation moderates, growth slows gradually	Fed could delay further tightening	Potential relief for equities and bonds
Growth deteriorates sharply while inflation remains sticky	Difficult trade-off between inflation and employment	Greater volatility, with recession fears dominating

For now, rate cuts are not part of the market's near-term expectations. The debate is increasingly about the timing and extent of further tightening, rather than when easing might begin.

The key data to monitor will be employment, consumer spending, business investment and whether inflation pressures continue to broaden.

A weaker growth outlook could reduce expectations for future rate hikes, but that would not automatically be positive for equities if corporate earnings were also coming under pressure.

6. What are US bank earnings telling us about the economy?

The first major US bank results suggest that the economy remains resilient, although higher rates and bond-market volatility are creating pressure in parts of the financial system.

Three themes stand out:

Equity trading remains strong. Goldman Sachs reported a 72% year-on-year increase in equities trading revenue, while JPMorgan and Morgan Stanley posted gains of 49% and 41%, respectively.
Fixed-income trading has been weaker. Revenue from fixed-income, currencies and commodities declined at several major banks, reflecting challenging conditions in bond markets.
Higher rates are a double-edged sword. Lending income has benefited some banks, but higher funding costs, bond-portfolio losses and potentially weaker loan demand could become greater challenges.

Consumer spending and lending activity have remained reasonably resilient, suggesting the economy is not yet showing broad recessionary conditions.

However, strong trading revenues may be difficult to sustain indefinitely, while higher interest rates could eventually weigh on credit demand and asset quality.

The takeaway for the broader earnings season is that headline earnings resilience may conceal growing differences in underlying business performance.

Investors should look closely at revenue quality, margins, funding costs and forward guidance rather than simply whether companies beat earnings expectations.

7. What should investors expect from Q3 Big Tech earnings?

This could be one of the most important earnings seasons for the AI trade.

Recent results from semiconductor manufacturers suggest underlying AI demand remains strong. The challenge is whether major technology companies can demonstrate that this investment is translating into sustainable profits and cash flows.

Five areas deserve particular attention:

1. Cloud growth and AI monetisation

Microsoft, Alphabet and Amazon will provide important evidence of enterprise AI adoption and demand for cloud computing.

Strong cloud growth would reinforce the structural demand story. But investors will also want to understand how quickly AI services are contributing to revenues and margins.

2. Capital expenditure guidance

Higher spending commitments may support semiconductor and equipment suppliers, but could create renewed concerns about investment returns.

Markets may become particularly sensitive to another round of substantial capex increases without clearer evidence of financial payback.

3. Free cash flow and margins

Depreciation, energy costs and infrastructure spending could offset some of the benefits of strong AI revenue growth.

The distinction between companies funding expansion through operating cash flow and those increasingly dependent on external financing will remain important.

4. AI adoption beyond infrastructure

Investors will look for evidence that AI is generating revenues or productivity benefits across software, advertising, digital services and enterprise applications.

This could support a broadening of the AI opportunity beyond chips and data centres.

5. Guidance and capital discipline

With expectations elevated, guidance may matter more than headline earnings beats.

Companies demonstrating improving utilisation, pricing power and disciplined investment could receive a more favourable market response than those simply announcing larger spending plans.

The most supportive outcome would be strong AI demand accompanied by improving cash flows and clearer returns on investment.

Conversely, excellent revenue results alongside sharply higher spending commitments could leave investors disappointed.

Magnificent Seven earnings calendar — Q3 2026

Company	Earnings date	What to watch
Tesla (TSLA)	21 Oct	EV margins after stronger deliveries; robotaxi and Optimus progress; AI investment versus free cash flow
Meta (META)	21 Oct	AI advertising monetisation; Muse adoption; 2027 capex outlook and returns on infrastructure spending
Microsoft (MSFT)	28 Oct	Azure AI growth and capacity constraints; Copilot monetisation; capex versus free cash flow
Alphabet (GOOGL)	28 Oct	Google Cloud growth and margins; AI impact on Search; TPU investment and 2027 capex guidance
Amazon (AMZN)	29 Oct (est)	AWS AI growth; infrastructure spending; retail margins and free cash flow
Apple (AAPL)	2 Nov	iPhone 18 demand; China sales; services margins; Apple Intelligence monetisation with relatively low capex
Nvidia (NVDA)	18 Nov (est)	Blackwell/Rubin demand; hyperscaler and neocloud orders; gross margins; export restrictions and customer financing risks

8. Could the AI selloff spread to the broader equity market?

This is becoming an important risk given how concentrated the US equity rally has been.

A relatively small group of technology companies now accounts for a substantial share of major US and global equity indices. That means weakness in AI-related stocks can drag down broader markets even when earnings elsewhere remain resilient.

There are three potential spillover channels:

Index concentration: Declines in technology heavyweights can have an outsized impact on the S&P 500 and global equity benchmarks.
Portfolio de-risking: Investors facing losses in crowded technology positions may reduce exposure elsewhere, creating selling pressure even in fundamentally sound companies.
Economic spillovers: If higher financing costs eventually slow AI infrastructure investment, the effects could spread to semiconductor suppliers, industrial equipment manufacturers, power infrastructure and construction.

However, an AI correction does not necessarily have to become a broader equity bear market.

If corporate earnings remain resilient and economic growth holds up, investors could rotate towards other sectors, including healthcare, selected financials, industrials and businesses with more reasonable valuations.

The key distinction is between contagion and rotation. A market where AI stocks correct while other sectors gain leadership may ultimately be healthier than one where the entire market remains dependent on a handful of companies.

What investors should watch is whether market breadth improves as technology weakens, or whether selling pressure begins spreading across sectors.

9. Can government bonds still protect portfolios when stocks fall?

For much of the recent inflation-driven selloff, equities and bonds have struggled together. Rising yields have weighed on technology valuations while pushing bond prices lower, reducing the diversification benefits of traditional stock-and-bond portfolios.

However, the latest market moves suggest that relationship may be changing.

Despite hotter US inflation, Treasury yields have retreated as equities weakened, with investors increasingly concerned about slowing growth and the risk of excessive Fed tightening.

This raises the possibility that government bonds could regain some of their traditional safe-haven role.

The distinction depends on what is driving the selloff:

Inflation shock: If inflation remains elevated and markets price in further tightening, both equities and longer-duration bonds could fall.
Growth shock: If economic activity weakens sharply, high-quality government bonds could benefit from safe-haven demand and lower expected interest rates.
Stagflation: If inflation stays high while growth deteriorates, bonds may offer less reliable protection, particularly at longer maturities.

The return of a negative stock-bond correlation would be helpful for diversified portfolios, but it cannot be taken for granted.

For investors, this argues for a more measured approach to duration rather than assuming that long-term government bonds will always offset equity losses.

10. Can US equities continue rising, or has the rally run its course?

We remain constructive on equities over the medium term, but the hurdle for further gains has increased.

Several supports remain in place:

Corporate earnings are still relatively resilient.
AI continues to drive strong demand across technology and infrastructure.
Broader earnings growth beyond the largest technology companies could support a more diversified rally.

However, elevated valuations, persistent inflation, higher financing costs and concerns about economic growth leave less room for disappointment.

Three possible outcomes are worth considering.

Scenario	Potential equity-market outcome
Inflation moderates and growth holds up	Equities recover, with potential for broader market participation
Inflation stays sticky while growth slows modestly	Greater volatility and differentiation between companies
Growth deteriorates sharply or credit stress spreads	Earnings downgrades and potentially deeper equity corrections

A correction does not necessarily signal the end of the bull market.

But the next phase may depend less on further valuation expansion and more on earnings delivery, financial resilience and broader participation across sectors.

Investors should also be mindful of concentration risk. Holding US equity ETFs, global index funds and individual technology shares can create substantial overlapping exposure to the same large AI companies.

The opportunity in equities has not disappeared, but the margin for error has narrowed.

11. What can investors consider doing with their portfolios now?

The current environment does not necessarily call for abandoning equities or AI. But with inflation and growth risks competing, portfolios may benefit from greater balance.

Four areas deserve consideration.

Bonds: Rebuilding protection against growth risks

High-quality government bonds could benefit from safe-haven demand if economic growth weakens.

Short-duration bonds offer income with relatively lower interest-rate sensitivity, while selective intermediate-duration exposure could provide greater protection if yields decline during a growth slowdown.

However, persistent inflation, fiscal concerns and heavy Treasury issuance could limit gains, particularly in longer maturities.

Quality equities: Stay exposed to AI, but look beyond the buildout

The next phase of AI may reward financial strength and monetisation over aggressive capital spending.

Different business models offer exposure to AI without necessarily carrying the same infrastructure financing requirements:

Asset-light platforms: Apple's device and services ecosystem represents a relatively less capital-intensive approach to AI, although valuation remains a consideration.
China technology: Platforms such as Tencent offer exposure to AI adoption through existing digital businesses, while cost-efficient models provide a different growth narrative.
Enterprise software and cybersecurity: AI adoption could support automation, productivity and digital security demand.
AI productivity beneficiaries: Financial services, healthcare and industrial businesses may benefit from efficiency gains without undertaking the same scale of infrastructure investment.

Healthy balance sheets, sustainable cash flows and reasonable valuations remain important across these areas.

Real assets: Inflation protection and structural demand

Gold may provide diversification against geopolitical and fiscal uncertainty, while copper, selected industrial metals and energy infrastructure have structural support from electrification, data centres and rising power demand.

However, these exposures carry different risks. Gold can face pressure from higher real yields, while industrial commodities remain vulnerable to a slowdown in economic growth.

Defensives with structural growth: Healthcare stands out

Healthcare combines relatively resilient demand with longer-term structural drivers such as ageing populations, medical innovation and growing healthcare needs.

It also provides diversification away from crowded AI infrastructure trades, although regulatory, drug-pricing and company-specific risks remain relevant.

The objective is not to predict a single market outcome, but to avoid having the entire portfolio depend on it.

Charu Chanana

Chief Investment Strategist

Saxo

Topics: Equities Artificial Intelligence Theme - Artificial intelligence Amazon NVIDIA Corporation Macro Central Banks Employment GDP Indices Corporate Bonds Government Bonds Bonds High yield bonds UKMustRead UK Portfolio Ideas