Global Market Quick Take: Europe – 6 February 2024 Global Market Quick Take: Europe – 6 February 2024 Global Market Quick Take: Europe – 6 February 2024

Global Market Quick Take: Europe – 6 February 2024

Macro 3 minutes to read
Saxo Strategy Team

Summary:  The biggest two-day jump in US 10-year Treasury yields since June 2011 on continued economic data strength helped curb the US stock market while sending the dollar to its strongest level since November, a combination that saw gold and other metals trade lower. Overnight a rally in Chinese shares accelerated after authorities intensified rescue efforts, defying broader weakness in Asia as hopes ebbed for a swift Federal Reserve pivot toward policy easing. A stance supported by the OECD after saying it’s too soon to say if sharp interest rate increases have contained underlying price pressures. Today’s focus on US bond auction as well as earnings from Eli Lilly, which is turning out to be a key competitor for Novo Nordisk in the obesity drugs space.

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

Equities: Massive rebound in Chinese equity futures with Hang Seng up 3.9% as traders are betting that the growing lists of initiatives by Chinese authorities will change sentiment and that the economy will eventually kick into gear again. Earnings from Caterpillar were better than feared and Palantir lifted sentiment in technology following a beat on both revenue and earnings (after the close) citing growing demand for AI technology. This morning in Europe, BP is beating earnings estimates and announcing more buybacks while Infineon is lowering its guidance on industrial semiconductor weakness and slower growth in electric vehicles. In Japan, Nintendo beat expectations again on Switch sales and lifted marginally its operating income guidance for the fiscal year.

FX: The stronger US ISM services print further added fuel to the recent narrative on a pushback to rate cut expectations, adding to the case for a dollar rally. DXY index traded to highs of 104.60, but some pullback was seen in the Asian session with RBA keeping a hawkish bias and Chinese President Xi getting more active about stopping the rout in financial markets. AUDUSD jumped higher to 0.6520 from sub-0.65 handle as RBA did not remove the “need for further tightening” clearly from the statement.  USDCNH meanwhile was seen slipping to 7.20 from highs of 7.2245 yesterday. Dollar’s pullback however did not help EUR, with EURUSD stuck around 1.0750 and ECB’s inflation expectations will be in focus today. Yen weakness has also been more measured despite rampant USD strength yesterday with USDJPY trading around 148.50 where intervention threat could pick up

Commodities: Crude oil prices registered modest gains on Monday despite a hawkish macro narrative gripping market, as geopolitical angst continued. Oil, however, remains range-bound amid no supply disruptions seen with focus today on EIA’s short-term energy outlook. Gold and silver both traded lower, but underlying demand remains with gold especially not falling to the extent that could be expected given the recent dollar and yield strength. Industrial metals were the worst performers of the day amid continued downbeat China rhetoric, but our weekly COT report highlights a cut in short copper positions. Meanwhile, the most shorted grains market since 2019 awaits Thursday’s monthly supply and demand report.

Fixed income: A strong January ISM report showing a reacceleration of prices paid, plus a speech from Goolsbee and Powell’s Sunday interview, provoked a broad sell-off across US Treasuries and a bear-steepening of the yield curve. The 10-year yields closed the day around 4.165%, up 14.5bos on the day, and Bund and Gilts followed suit, although suffering from lesser losses. The iShares 20+ Year Treasury Bond ETF (TLT), dropped by more than 2% on the day of yesterday. A big supply slate for this week is adding angst to markets with the investment-grade corporate space looking to price up to $30 billion in bonds and the US Treasury selling $54 3-year notes today, and $42bn 10- and 25bn 30-year bonds on Wednesdays and Thursday. Although we expect strong demand at today’s 3-year and tomorrow’s 10-year auctions, demand on Thursday 30-year US Treasury auction remains uncertain as it needs investors to extend their portfolio duration (for more information click here). A poor 10- or 30-year US Treasury auction has the potential to extend the bear-flattening of the yield curve witnessed yesterday.

Macro: US ISM services for January came in hot, adding fuel to the hawkish fire. Headline PMI rose to 53.4 from 50.5 (vs. 52.0 exp). Prices paid surged to 64.0 (prev. 57.4), the highest since February 2023, and could raise some concern about disinflation trends. Employment lifted back into expansionary territory, printing 50.5 (prev. 43.8), while business activity was unchanged at 55.8. The backlog of new orders and supplier deliveries both rose back above 50.0 to 55.0 (prev. 52.8) and 52.4 (prev. 49.5), respectively. Fed speakers remained balanced although Goolsbee (non-voter) said he wouldn’t rule out a March cut. Bowman (voter) said reducing the policy rate too soon could mean more rate hikes are needed in the future, and she also remains willing to raise the policy rate at a future meeting if it is needed. Japan’s wage data for December came in below expectations. Labor cash earnings rose 1% YoY, above 0.7% previous but missing expectations of 1.4%. The focus is still on wage negotiations and the market is increasingly expecting BOJ to exit its negative interest rate policy in April, but we see only modest and gradual tightening. The Reserve Bank of Australia left interest rates unchanged at a 12-year high and signaled further tightening remains possible with the central bank head Bullock saying that taming inflation was taking priority over the desire to provide relief to heavily indebted mortgage holders

Technical analysis highlights: S&P 500 resuming uptrend likely to test 5K but uptrend stretched. Nasdaq 100 minor correction, resuming uptrend. DAX rejected at 17K, needs to close above for upside, Likely correction to 16,500. EURUSD testing 1.0730 key support. USDJPY testing key resistance at 148-80, a close above looking at +150. EURJPY key support at 158.55. GBPUSD broken bearish out of range likely to test 1.25 support. AUDUSD below key strong support at 0.6520. Gold rejected at strong resistance at 2,064, if broken move to 2,121, key support at 2K. 10-year T-yields bouncing from previous low at 3.78, key resistance at 4.20.

Volatility: Monday's session was a blend of volatility and contradiction. The VIX peaked at $14.53, fueled by a robust US ISM services PMI and hawkish Fed remarks, yet closed lower at $13.67 (-0.18 | -1.30%). This juxtaposition against Nvidia's surge and the broader market's restraint under rising yields paints a complex picture. Since mid-December, a gradual VIX uptrend amidst rallying markets and a persistently high SKEW index above 150, during the last few days, suggest growing caution towards outlier risks. Despite this, VIX futures held steady overnight at 13.950 (-0.005 | -0.04%), and S&P 500 and Nasdaq 100 futures edged up, indicating a tentative continuation of the upward trend. Yet, an undercurrent of caution persists, hinting at potentially volatile times ahead as indicators increasingly flash warning signals.

In the news: China Tightens Some Trading Restrictions for Domestic and Offshore Investors (Bloomberg), Spate of job cuts continues unabated at Big Tech, media firms (Reuters), Red Sea tensions risk significantly higher inflation, OECD warns (CNBC), BOE’s Pill Says Rate Cut Possible This Year as ‘Reward’ for Inflation Drop (Bloomberg), The World’s Chip Industry Poised to Bounce Back After Tough 2023 (Bloomberg), Novo Nordisk's parent to buy Catalent for $16.5 bln to boost Wegovy supply (Reuters), McDonald’s revenue misses estimates as Middle East conflict weighs on quarterly sales (CNBC), Estee Lauder to cut jobs on skittish China demand; shares surge 19% (Reuters), Palantir stock jumps 19% as AI demand drives revenue beat (CNBC)

Macro events (all times are GMT): ECB’s 1 and 3 year CPI expectations (Dec) last at 3.2% and 2.2% (0800), Eurozone retail sales (Dec) exp. -1% & -0.8% vs –0.3% & -1.1% prior (0900), EIA’s monthly Short-term energy outlook (1600), API’s weekly crude oil and fuel stock report (2030), US government to sell $54 bn 3-year Notes (1700), Speeches from Fed’s Mester (1600), Kashkari voter (1700) and Collins (1800)

Earnings events: Another busy week ahead on earnings with the list below highlighting the largest companies reporting earnings this week.

  • Today: Toyota Motor, UBS Group, Linde, Amgen, Gilead Sciences, Eli Lilly, BP, Fiserv, KKR, Infineon Technologies, Spotify, Intesa Sanpaolo
  • Wednesday: Equinor, Walt Disney, Alibaba, TotalEnergies, Uber Technologies, CVS Health, Siemens Energy, Vestas Wind Systems, Orsted, Carlsberg, ARM, PayPal
  • Thursday: NTT, Siemens, AstraZeneca, Unilever, Philip Morris, S&P Global, L’Oreal, ConocoPhillips, Adyen, ArcelorMittal, Maersk
  • Friday: Toyota Electron, Hermes International, PepsiCo, Coloplast

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.