Global Market Quick Take: Europe – October 6 2023 Global Market Quick Take: Europe – October 6 2023 Global Market Quick Take: Europe – October 6 2023

Global Market Quick Take: Europe – October 6 2023

Macro 3 minutes to read
Saxo Strategy Team

Summary:  All eyes on today’s US payrolls report and whether an expected slowdown in hiring may give a respite to markets under pressure from surging bond yields and the strong dollar. Recession worries and a slump in energy prices this week potentially also easing pressure on the FOMC to raise interest rates again. Asian shares trades higher overnight while US and Europe equity futures show no clear direction ahead of the report which together with next week’s inflation number will likely show the short-term direction of bond yields and the market in general.

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

Equities: S&P 500 futures failed to rebound above the 4,300 level and are trading slightly lower this morning at around the 4,284 level. Today’s key event is naturally the US September Nonfarm Payrolls report and especially after the much weaker than estimated ADP employment change figure on Wednesday suggesting the US labour market is cooling.

FX: The dollar trades softer as Treasury yields retreated further ahead of the US jobs report due today. Against a basket of major currencies, the greenback remains up on the week with heavy losses in MXN, AUD and CAD. AUDUSD also pushed higher, but unable to break above 0.6380 for now. Oil price declines put pressure on CAD and NOK, sending NZDCAD and NZDNOK surging as noted in yesterday’s FX note. EURUSD attempting a push above 1.0550 while USDJPY has bounced from the 21-day MA for a second day, last at 148.37.

Commodities: Crude oil is heading for its worst weekly loss since March with the sector taking a hit from a stronger dollar and a surge in bond yields. High prices killing demand also in focus as refinery margins for diesel and gasoline has slumped by more than one-quarter this week. In WTI, a long/short ratio above 15 has left the longs with a very narrow exit door through which they are now scrambling to squeeze through, thereby exacerbating the slump. Gold and silver look oversold ahead of Friday’s US jobs report, with recession worries lifting 2024 rate cut expectations.

Fixed income: US Treasuries remained stable above 4.7% yesterday despite comments from Federal Reserve member Daly suggesting that the Fed might be done with rate hikes already as the rise in long-term yields tightens the economy further. Dropping oil prices and a weak non-farm payroll report today could add to the rally, but Treasuries are headed towards an intense week of T-bills and coupon supply which could push again long-term yields higher. We expect yields to continue to soar with 10-year US Treasury yields peaking around 5%-5.25%. In the meantime, financing conditions will tighten further putting risky assets under pressure. We therefore remain cautious, and favour low duration, high-grade bonds.

Volatility: The VIX Index was unchanged yesterday reflecting no substantial changes in implied volatility in US equities. While volatility remains below average in equities, volatility is picking up in both bond and currency markets.

Macro: Fed’s Daly (2024 voter) showed increasing confidence in the lack of need for further hikes, citing the recent backup higher in yields (tightening financial conditions) removing the need to do more on hikes. Initial jobless claims data rose marginally to 207k from 205k in the week ending September 30th, beneath the expectations of 210k. Focus now shifts to September NFP report due today.

In the news: Amazon Used Secret ‘Project Nessie’ Algorithm to Raise Prices (WSJ), UK to examine Amazon and Microsoft's cloud dominance (Reuters).

Technical analysis: S&P 500 downtrend support at 4,212 and 4,100. DAX support at 14,933 if below next support at 14,458. EURUSD likely correction to 1.0620. GBPUSD likely correction to 1.2275, strong support at 1.20. USDJPY likely correction, key support at 147.30. Gold strong support at 1,800. WTI Crude oil correction, support at 81.35. US 10-year yields expect correction down to 4.56%

Macro events: US Non-Farm Payrolls (Sep) exp. 170k vs 187k prior, Average Hourly Earnings exp. 4.3% YoY vs 4.3% prior, Unemployment rate exp. 3.7% vs 3.8% prior. (1230 GMT)

Earnings events: No important earnings releases today.

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.