Global Market Quick Take: Europe – 22 May 2024 Global Market Quick Take: Europe – 22 May 2024 Global Market Quick Take: Europe – 22 May 2024

Global Market Quick Take: Europe – 22 May 2024

Macro 3 minutes to read
Saxo Strategy Team

Key points:

  • Equities: Mixed sentiment ahead of key earnings releases from Nvidia and PDD
  • Currencies: Sterling rises on CPI miss
  • Commodities: Metal rallies show signs of cooling
  • Fixed Income: UK inflation data beats expectations, causing upheaval in sovereign bond markets
  • Economic data: US Home Sales & FOMC minutes

The Saxo Quick Take is a short, distilled opinion on financial markets with references to key news and events.

Equities: Mixed session in Asia with Japanese equities down 0.8% and Hong Kong equities up 0.3% after a sharp drop yesterday. US and European equity futures are flat this morning ahead of two important earnings releases from Nvidia (aft-mkt) and PDD (bef-mkt). Analysts expect Nvidia to deliver revenue growth of 243% YoY and EPS growth of 546% YoY and with the recent strong outlook from TSMC expectations are set high going into this earnings releases. PDD, which is the parent company of the successful e-commerce platform Temu, is expected to report Q1 earnings before the US market opens with analysts expecting revenue growth of 104% YoY. Fed speeches from Collins, Mester, and Waller all painted a picture the Fed needs more good inflation data points before it can begin cutting the policy rate forcing the market to reprice less certainty of two rate cuts this year by December. The upside surprise to UK core inflation this morning is also raising the stakes that the ECB is maybe premature in its eager to cut in June.

FX: The Bloomberg Dollar Index trades a tad softer on the day but still up on the week with gains seen against all its major peers, except GBP which trades higher after UK CPI fell by less than expected, thereby raising doubts about the timing of the first UK rate cut. The Fed speeches from Collins, Mester, and Waller yesterday have all added to less certainty of two rate cuts by the market and added to the momentum in USDJPY which trading around the 156.40 level this morning looking to test the high levels from earlier this month.

Commodities: Wheat prices hit 10-month high on concerns that adverse weather in Ukraine and not least Russia, the world’s top exporter, will lead to further downgrades of harvest, already down to 83.5m tons from above 90m tons a few weeks ago. The strong rally across metals show signs of cooling amid fears of overbought market conditions combined with continued weak copper fundamentals, especially in China where inventories remain high. Silver meanwhile has settled into a 31 to 32.50 range with gold edging lower, despite a sixth daily increase in ETF holdings, after Fed’s Waller said more data softness was needed to justify rate cuts while China’s gold imports slumped 30% m/m in April to the lowest of the years. Crude oil trades lower for a third day amid softness in the physical market and after the API reported increases in crude and gasoline stocks.

Fixed income: The European morning begins with news that UK headline inflation has decreased significantly, though not as much as economists had forecasted. UK headline inflation dropped to 2.3% year-on-year in April from 3.2% in March, but it remains above the consensus estimate of 2.1%. The progress in Core and Services CPI is even less impressive, with Core CPI falling to 3.9% and Services CPI to 5.9%, casting doubt on the possibility of an early rate cut by the Bank of England with bond futures estimating 39bps rate cuts by the end of the year versus 55bps yesterday. UK inflation data have caused turmoil in the European sovereign bond markets, with yields soaring across the curves. Italian and Portuguese sovereign bonds are notably underperforming compared to their peers. Across the Atlantic, Atlanta Fed's Bostic remarked yesterday that the neutral interest rate might rise above the current 2.6% indicated by the dot plot. In contrast, Waller described the latest CPI report as "reassuring," leading to a sharp decline in yields across the yield curve. Consequently, bond futures are now pricing in a potential 40 basis point rate cut by the end of the year, starting in November. Today, market attention shifts to the 20-year note auction and the release of the FOMC minutes. Looking ahead, focus will also be on the upcoming UK inflation data due on Wednesday, expected to decrease to 2.1% annually from 3.2%, largely due to lower energy bills. We continue to favor the front end of the yield curve while maintaining a cautious stance on duration.

Volatility: The VIX closed at $11.86 (-0.29 | -2.39%), marking its lowest close since November 27, 2019. The VVIX also saw a decline, finishing at 77.62 (-1.83 | -2.30%), while the SKEW, an indicator of the probability of outlier events, rose to 149.52 (+4.98 | +3.45%), suggesting an increasing likelihood of such events. With the VIX at such low levels, options volume in VIX contracts has surged, with daily volumes exceeding 1 million contracts. Today, we may observe some volatility due to the release of the FOMC Meeting Minutes and Nvidia's highly anticipated earnings report, which could significantly impact the AI sector and the broader markets. VIX futures remained stable overnight at 13.40 (+0.01 | +0.08%). Meanwhile, S&P 500 and Nasdaq 100 futures are trading at 5346.00 (+0.75 | +0.01%) and 18813.25 (+14.00 | +0.08%) respectively. Yesterday's top 10 traded stock options, in order: Tesla, Apple, Nvidia, Amazon, Microsoft, AMC Entertainment, GameStop, Advanced Micro Devices, Warner Bros. Discovery, and Palo Alto Networks.

Macro: UK inflation fell less than expected last month, fueling doubt about when the Bank of England can start cutting interest rates. The April CPI rose 2.3% from a year ago in April, down from 3.2% the previous month, but above an expected 2.1%. Services inflation, which the BOE is watching carefully for signs of domestic pressures, remained little changed at 5.9% versus 5.4% expected. The Reserve Bank of New Zealand kept rates unchanged at 5.5% for a seventh straight meeting, but the NZD jumped, and government bond yields rose after the bank  signaled  that interest rate cuts may start later in 2025 than previous expected. Fed Govenor Christopher Waller said that developed nations are finally getting a grip on inflation while saying that the recent US CPI report was “a reassuring signal”, and he went onto say that continued softening in the coming months would allow the Fed to consider lowering interest rates at the end of 2024.

In the news: US on track to establish domestic rare earths supply chain for defence, official says (Reuters), New Covid FLiRT variants spark concerns of a summer spike (CNBC), China has finally unveiled its property rescue plan. Will it be enough? (FT)

Macro events: US Existing home sales (Apr) exp 4.23m vs 4.19m (14:00), EIA’s Weekly Crude and Fuel Stock report (14:30), FOMC minutes from May 1 meeting (18:00)

Earnings events: This week’s big earnings event is Nvidia reporting FY25 Q1 (ending 30 April) earnings today with analysts expecting revenue at $24.7bn up 243% YoY and 11.8% QoQ as demand remains extremely high for GPUs used in generative AI modelling and applications. The key is the outlook and with the recent positive outlook from TSMC the bar is set high for Nvidia. PDD, the parent company of Temu, is also an important earnings release to watch reporting Q1 earnings before the US market opens with analysts expecting revenue growth of 104% YoY.

  • Today: Analog Devices, TJX, Nvidia, Synopsys, Snowflake, Kuaishou Technology, PDD, Target, SSE
  • Thursday: Meituan, Xiaomi, Toronto-Dominion Bank, Medtronic, Ross Stores, Intuit, Workday, NetEase, National Grid
  • Friday: Autodesk, Dollar Tree

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


The Saxo Group entities each provide execution-only service, and access to analysis permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Inspiration Disclaimer and (v) Notices applying to Trade Inspiration, Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular, no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Trading in financial instruments carries risk, and may not be suitable for you. Past performance is not indicative of future performance. Please read our disclaimers:
Notification on Non-Independent Investment Research (
Full disclaimer (

None of the information contained here constitutes an offer to purchase or sell a financial instrument, or to make any investments. Saxo Markets does not take into account your personal investment objectives or financial situation and makes no representation and assumes no liability as to the accuracy or completeness of the information nor for any loss arising from any investment made in reliance of this presentation. Any opinions made are subject to change and may be personal to the author. These may not necessarily reflect the opinion of Saxo Markets or its affiliates.

Saxo Markets
88 Market Street
CapitaSpring #31-01
Singapore 048948

Contact Saxo

Select region


Saxo Capital Markets Pte Ltd ('Saxo Markets') is a company authorised and regulated by the Monetary Authority of Singapore (MAS) [Co. Reg. No.: 200601141M ] and is a wholly owned subsidiary of Saxo Bank A/S, headquartered in Denmark. Please refer to our General Business Terms & Risk Warning to consider whether acquiring or continuing to hold financial products is suitable for you, prior to opening an account and investing in a financial product.

Trading in financial instruments carries various risks, and is not suitable for all investors. Please seek expert advice, and always ensure that you fully understand these risks before trading. Trading in leveraged products such as Margin FX products may result in your losses exceeding your initial deposits. Saxo Markets does not provide financial advice, any information available on this website is ‘general’ in nature and for informational purposes only. Saxo Markets does not take into account an individual’s needs, objectives or financial situation.

The Saxo trading platform has received numerous awards and recognition. For details of these awards and information on awards visit

The information or the products and services referred to on this website may be accessed worldwide, however is only intended for distribution to and use by recipients located in countries where such use does not constitute a violation of applicable legislation or regulations. Products and Services offered on this website are not intended for residents of the United States, Malaysia and Japan. Please click here to view our full disclaimer.

This advertisement has not been reviewed by the Monetary Authority of Singapore.

Apple and the Apple logo are trademarks of Apple Inc, registered in the US and other countries and regions. App Store is a service mark of Apple Inc. Google Play and the Google Play logo are trademarks of Google LLC.