Market Quick Take – 29 October 2025

Market drivers and catalysts

• Equities: Records in the US while Europe was flat, Asia mixed with Japan higher on chip strength while Hong Kong slipped ahead of China PMI.
• Volatility: Fed decision in focus, VIX up
• Digital Assets: Bitcoin steady near $113k, ETH above $4k, strong ETF inflows (IBIT, ETHA), altcoins mixed ahead of Fed and Trump–Xi meeting
• Currencies: USD largely neutral to slightly firmer, with Sterling weakness and AUD strength after hot AU inflation figures in focus.
• Commodities: Gold and silver bounce from consolidation lows yesterday.
• Fixed Income: US treasuries locked in tight range ahead of FOMC
• Macro events: Bank of Canada Decision, US FOMC decision

Macro headlines

• Trump and Xi will discuss halving 20% fentanyl-related tariffs on Chinese goods. The U.S. will roll back tariffs if China curbs chemical exports used to make fentanyl. The final agreement depends on their meeting and future negotiations, with expected reductions in port fees on each other's ships.
• Australia Sep. CPI out at 3.5% YoY vs. 3.1% expected and 3.0% in Aug., while the “Trimmed Mean” measure rose 2.8% vs. 2.6% in Aug. For the Q3 CPI figures, headline CPI rose 1.3% QoQ and 3.2% YoY vs. 1.1%/3.2% expected, respectively, while the Trimmed Mean Q3 measure rose 1.0% QoQ and 3.0% YoY vs. 0.8%/2.7% expected, respectively.
• US ADP Payrolls Changes will now be reported weekly, starting yesterday. In the four weeks ending October 11, 2025, US private businesses added an average of 14,250 jobs weekly, indicating a monthly growth of about 57,000 jobs, this versus September's reported 32,000 of job losses.
• The August S&P Cotality 20-City House Price Index rose 1.6% year-on-year, the smallest annual increase since July 2023 but above the expected 1.3%. Home price growth continues to lag behind the 3% inflation rate, reflecting a decrease in homeowners' real wealth. New York led with a 6.1% rise, followed by Chicago and Cleveland, while Tampa saw a 3.3% decline. The month-on-month index rose +0.19% versus an expected fall of -0.1%.
• In September 2025, Eurozone consumer inflation expectations fell to 2.7%, while three-year and five-year forecasts held at 2.5% and 2.2%, respectively. Income growth expectations were 1.1%, with economic growth at -1.2%. Unemployment held steady at 10.7%, indicating labor market stability. Home prices were expected to rise 3.5% in the next year.
• Trump mentioned considering Scott Bessent for Federal Reserve chair during a Japan visit, despite the Treasury Secretary leading the search and ruling himself out. He praised the Secretary's market-calming skills during his second term's first year.

Macro calendar highlights (times in GMT)

US Government data are impacted by shutdowns and are likely to be delayed

0930 – UK Sep. Mortgage Approvals
1345 – Canada Bank of Canada Rate Decision
1430 – US Weekly DoE Crude Oil and Product Inventories
1800 – US FOMC Rate Decision / Monetary Policy Statement
1830 – US Fed Chair Powell Press Conference
Tonight (sometime between about 0230-0400) – Bank of Japan policy decision/statement

Earnings events

• Today: Microsoft, Alphabet, Meta, Caterpillar, ServiceNow, Airbus, Boeing, KLA, MercadoLibre, Banco Santander, UBS Group, Automatic Data Processing, Starbucks
• Thu: Apple, Amazon.com, Eli Lilly, Mastercard, Samsung, Merck, Shell
• Fri: ExxonMobil, Abbvie, Chevron, Linde

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

Equities

• USA: The S&P 500 rose 0.2%, the Dow added 0.3% and the Nasdaq 100 gained 0.7%, all at record closes. AI leadership did the lifting as Microsoft climbed 2.0% on a landmark, reworked OpenAI partnership, while Nvidia jumped 5.0% amid accelerating AI infrastructure bets. UPS rallied 8% on robust earnings and guidance, and Amazon added 1.0% after confirming 14,000 corporate job cuts to fund AI initiatives. Focus now turns to an expected 25bp Fed cut and megacap earnings.
• Europe: The Euro Stoxx 50 slipped 0.1% and the Stoxx 600 fell 0.2% after Monday’s records. Sector tone was defensive as pharma weighed: Novartis fell 4.2% on a soft print. Banks diverged—HSBC rose 4.6% on a stronger 2025 income outlook while BNP Paribas dropped 3.4% after a profit miss. Nokia surged 22.9% after Nvidia unveiled a USD 1bn equity stake and strategic partnership, lifting network and chip sentiment across the tape. Rate paths and the trade backdrop remain in focus.
• Asia: Tone was mixed: Japan’s Nikkei 225 jumped 2.2% to a fresh high above 51,000, while Hong Kong’s Hang Seng slipped 0.3% to 26,346. In Japan, chip names led as Advantest soared 20.3% after hiking its profit outlook; in Hong Kong, growth/consumer names eased with Xiaomi down 2.3%. Policy signals stayed supportive as Beijing streamlined foreign-investor rules to attract long-term capital and the PBoC reiterated a supportive stance ahead of China’s October PMI.

Volatility

• Volatility ticked up ahead of the Fed decision tonight, with the VIX climbing to 16.4 and short-term gauges like VIX1D up more than 38% as traders brace for Powell’s tone on rates. While a 25-bp cut is expected, investors want clarity on whether this marks a turning point or a pause in easing. Markets remain calm but alert, with equity gains fading into the announcement window. Options pricing for today’s SPX expiry implies a ±36-point (≈0.5%) expected move, showing restrained nerves. The skew is flat to slightly call-tilted for today—suggesting limited downside fear—but reverts to a mild put-premium toward Friday, hinting at renewed weekend caution and event hedging.

Digital Assets

• Crypto trades steady but cautious into the Fed. Bitcoin sits near $113k and Ethereum above $4k, both holding gains from earlier in the week. ETF flows remain a bright spot: US spot Bitcoin ETFs saw about $200m in net inflows, led by BlackRock’s IBIT (~$60m), while Ethereum ETFs drew ~$246m, including $76m into ETHA. Institutional appetite is steady, even as traders wait for the policy signal and the upcoming Trump–Xi meeting in Seoul.
• Broader altcoins mirror the risk tone—XRP up nearly 1%, Solana modestly higher, while crypto-equities like COIN, MSTR, and MARA ease after a strong run. Momentum likely hinges on how dovish the Fed sounds and whether global risk appetite stays intact.

Fixed Income

• US treasury yields were little changed ahead of today’s FOMC meeting, with the benchmark 2-year treasury remaining just below 3.50%, while the benchmark 10-year yield likewise near unchanged on the day at 3.98% this morning.
• Japanese government bond yields are steady within tight ranges ahead of a Bank of Japan meeting on Thursday that may provide clues on December BoJ meeting rate hike odds.

Commodities

• Gold and silver bounced after posting new local lows on this consolidation run yesterday. Silver trades 47.50 this morning in Europe after a low overnight of 46.86 and a low during the correction of 45.56 yesterday. Gold trades at 3,965 after yesterday’s correction low of 3887.
• US soybean futures trade near the highs of the year in anticipation of significant soybean purchases. Reuters reports that China has bought three cargoes of US soybeans ahead of the Trump-Xi meeting tomorrow.
• Crude oil futures traded steady after a three-day decline, as traders concluded that last week’s sanctions-driven surge was largely short covering rather than a shift in fundamentals. Ample supply remains a key focus and may continue to weigh on prices in the short term. Brent trades back below USD 65, while WTI is just holding above USD 60.

Currencies

• The US dollar was sideways to slightly firmer, as EURUSD backed off slightly after a mild rally yesterday, trading 1.1630 today in early European hours, while USDJPY pulled back above 152.00 and nearly to 152.50 after an overnight low of 151.54.
• Sterling traded sharply lower yesterday on a UK Office for Budget Responsibility report indicating weaker productivity growth than anticipated, which means an additional GBP 20 billion gap in the budget that Reeves may try to fill with tax and other measures that could crimp growth next year. EURGBP pulled above the former range since early 2023, breaking above 0.8760 and trading near 0.8785 this morning in Europe.
• AUD jumped on the strong AU inflation figures out overnight with AUDUSD just above 0.600 this morning in Europe and AUDNZD rallied further and back above 1.1400 after starting the week near 1.1300.

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