Global Market Quick Take: Europe – October 4 2023 Global Market Quick Take: Europe – October 4 2023 Global Market Quick Take: Europe – October 4 2023

Global Market Quick Take: Europe – October 4 2023

Macro 3 minutes to read
Saxo Strategy Team

Summary:  Bond yields are hammering higher across the board impacting all markets sending equities lower, Brent crude lower and the USD higher. The market is basically making a big repricing of longer ended bond yields in response to recent economic data but also potentially questions over the US fiscal situation.

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

Equities: S&P 500 futures broke below the established trading range trading around the 4,240 level with the 200-day moving average likely to be tested down at the 4,227 level. Equities are right now dictated by the bond market and how high yields will go be the move exhausts itself. As we wrote in yesterday’s equity note the weakest link in equities on higher bond yields is green transformation stocks.

FX: The big move in US long bond yields is relentlessly pushing the USD Index higher trading around the 107.18 level this morning the highest since November 2022. EURUSD is also declining again this morning trading at the 1.0460 level with no major support levels down to 1.0400.

Commodities: Oil stabilised yesterday after some selling earlier in the week, but Brent crude is back below $91/barrel as higher bond yields are expected to slow the economy and thus demand for oil.  Gold continues to slide lower this morning trading around the 1,818 level falling for eight straight sessions in the most brutal selloff over the past year.

Fixed income: US Treasuries continue to tumble as the 3-month SOFR rate shows the Federal Reserve will not cut rates below 4.25% in the foreseeable future. The selloff continued despite US Treasury Secretary Janet Yellen trying to comfort markets saying that the higher-for-longer scenario is not a given. Selling pressures pushed ultra-long maturities to test critical levels on both sides of the Atlantic with 20-year US Treasury yields breaking above 5% a level not seen in 10- nor 30-year maturities since 2007. This morning, 30-year US Treasury yields are also rising to test 5%. In England, 30-year Gilt yields broke above 5%, a level not seen since 2002. In Europe, 10-year German real yields rose to 0.64%, doubling in merely ten days and reaching a level not seen since 2011, pushing 10-year Bund nominal yields to 3%. We believe that yields will continue to soar and that the yield curve will steepen further as 10-year US Treasury yields rise to 5%. In the meantime, financing conditions will tighten further putting pressure of risk. We therefore remain cautious, and favour low duration, high-grade bonds.

Volatility: The VIX Index still remains below the structural level (around 22) for when the market switch from being positive to negative in terms of expected returns.

Macro: The big macro data point yesterday was the August JOLTS Job Openings at 9610K vs est. 8815K underpinning the narrative of ‘higher for longer’. Having said that it is important to acknowledge that this time series is very volatile on m/m figures and that the smoothed 6-month average is still pointing down (pressures in US labour market slowly easing).

In the news: Big moves in the long end of the US yield curve reverberate through financial markets (Bloomberg). Kevin McCarthy was ousted yesterday as Speaker of the US House of Representatives as a first in US history (FT).

Technical analysis: US and EU stocks Bearish trend: S&P500 support at 4,169. Nasdaq 100 support at 14,254. DAX likely support at 14,933. EURUSD downtrend close to exhaustion, minor support at 1,0438. GBPUSD downtrend, support at 1.20. USDJPY uptrend intact but stretched, resistance at 152. Brent Crude oil correction likely down to 88.10. US 10-year yields towards 5%.

Macro events: US Sep ADP Employment Change (1215 GMT) est. 150K vs prior 177K. US Sep ISM Services Index (1400 GMT) est. 53.5 vs prior 54.5.

Earnings events: Tesco reports FY24 1H results (ending 31 August) before the European equity market opens with analysts expecting revenue growth of 5% y/y and no change in operating profits.

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 Rules of Engagement and (v) Notices applying to 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.

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 Capital 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.