Market Quick Take - UK Autumn Budget in focus - 28 October 2026

Market drivers and catalysts

• Macro: Central banks navigate inflation and growth risks as Middle East diplomacy faces uncertainty
• Equities: US equities climbed on AI strength, European markets advanced despite UK losses, Asian shares rose as Korean chipmakers surged.
• Volatility: Decision day volatility jumped while the broader gauges eased before the policy announcement
• Digital Assets: Tokens and the listed complex firmed while the largest corporate holder paused its buying
• Commodities: Oil rebounds on geopolitical risks, gold weakens ahead of Fed as wheat hits July low
• Fixed Income: Global sovereign bond yields edge higher, but high yield bonds rally.
• Currencies: NZD tumbles as RBNZ forgoes expected hike. JPY and USD firm.

Macro

• FOMC preview: The Federal Reserve is widely expected to leave interest rates unchanged today, following September's 25-basis-point hike. Focus will be on any signals of another increase in December, with CME FedWatch currently pricing an 82.5% probability of higher rates by year-end. Since the September meeting, economic data have pointed to further labour market weakness alongside accelerating inflation, even excluding the energy-driven surge. This leaves the Fed facing an increasingly difficult balancing act between containing inflation and supporting employment.
• Diverging monetary policy outlooks in Australia and New Zealand: Australian inflation accelerated in September, with headline CPI rising to 4.3% year-on-year from 4.0% in August. Housing inflation remained elevated at 5.2%, while transport costs surged 8.7%, partly reflecting higher fuel prices. The figures highlight persistent inflationary pressures, reinforcing expectations that the Reserve Bank of Australia may need to raise interest rates further. Meanwhile, the Reserve Bank of New Zealand surprised markets by keeping its policy rate unchanged at 2.75%, against expectations of a hike. The decision, reached by a narrow 4–3 vote, reflected concerns about global uncertainty.
• Israeli election uncertainty and renewed Middle East diplomacy: Israeli exit polls suggest a tight race between Prime Minister Benjamin Netanyahu and opposition leader Gadi Eisenkot, with both camps projected to secure 51 parliamentary seats, leaving the outcome uncertain. Meanwhile, markets are assessing renewed diplomatic efforts after officials from Saudi Arabia, Pakistan and Turkey met Iranian leaders. Iran's Supreme Leader Mojtaba Khamenei called for an end to the current "neither war nor peace" situation while reiterating Tehran's conditions for ending the conflict, including the lifting of US sanctions and an end to the naval blockade.
• COT reporting to move to twice weekly from December: The CFTC announced on Tuesday plans to double the publication frequency of its widely followed Commitments of Traders (COT) report. Currently released every Friday, the report provides a snapshot of positions held the previous Tuesday across futures and options markets, covering commodities, currencies, equity indices and interest rates. From December, the CFTC plans to publish reports every Wednesday and Friday, providing traders and investors with a more up to date picture of speculative positioning and changes in market sentiment. The increased frequency should help reduce the information lag, particularly during periods of heightened volatility when positions can shift rapidly.

More in our Macro Analysis & Macroeconomic News

Macro calendar highlights (times in GMT)

• 1230 – US Sep. Advance Goods Trade Balance
• 1345 – Canada Bank of Canada Rate Decision
• 1430 – US Weekly DoE Crude Oil and Product Inventories
• 1800 – US FOMC Rate Decision
• 1830 – US Fed Chair Warsh Press Conference

Earnings events

• Wednesday: Alphabet, Microsoft, SK Hynix, GE Vernova, KLA Corp, Amphenol, Airbus, T-Mobile US, ServiceNow, Advantest, UBS, Fortinet, Automatic Data Processing, FedEx
• Thursday: Amazon.com, Eli Lilly, Samsung, Mastercard, Intel, Merck, Caterpillar, Shell, Linde, TotalEnergies, Gilead Sciences, SanDisk, Starbucks, Monster Beverage
• Friday: ExxonMobil, AbbVie, Chevron, AstraZeneca, Tokyo Electron, Kioxia, BP, General Dynamics.

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

Equities

• USA: The S&P 500 rose 0.6%, the Nasdaq 100 gained 1.3%, and the Dow was flat, as technology stocks led Wall Street higher ahead of the Federal Reserve's interest-rate decision. The semiconductor index surged 3.6%, its strongest gain in over a month, while Broadcom advanced 4% after a $63 billion financing deal supported plans to supply AI chips to Anthropic. However, Boeing plunged 10.7%, its worst day in six years, after disappointing earnings and delays to its aircraft production targets, while Coca-Cola slipped 1.6% despite beating earnings estimates and raising its full-year outlook.
• Europe: European equities advanced, with the Stoxx 600 rising 0.5%, the DAX gaining 0.7% and the CAC 40 adding 0.5%, while the FTSE 100 fell 0.8% on disappointing earnings. Technology stocks led the gains, with Dutch chip equipment maker BE Semiconductor Industries surging 11.4% after Applied Materials announced plans to increase its stake. In London, HSBC dropped 5.4% following weaker-than-expected revenue. Mercedes-Benz declined 3.9% after lowering its profit guidance, highlighting continued weakness in China's car market ahead of Thursday's European Central Bank decision.
• Asia: Asian equities advanced on Wednesday, with South Korea's Kospi surging more than 6% and Japan's Nikkei 225 gaining 1.1%, while Hong Kong's Hang Seng and Singapore's Straits Times Index were little changed. Korean chipmakers led the rally after SK Hynix reported record quarterly operating profit of 83.3 trillion won, more than seven times last year's level, driven by strong demand for AI memory chips. SK Hynix climbed more than 10% during the session, while Japanese semiconductor stocks also benefited from renewed AI optimism. Attention now turns to Samsung's earnings and results from Alphabet and Microsoft for further evidence of sustained AI demand.

More in our Equity Trading - Stock Market Analysis & News

Volatility

VIX 17.52 | VIX FUTURES: 19.000 (Nov) | TERM STRUCTURE: CONTANGO | SKEW: ELEVATED (149.22) | MARKET REGIME: TRANSITIONING | AS OF ~06:00 CET

• Traders spent Tuesday buying protection for Wednesday's session and selling everything after it. The VIX eased to 17.52, while VIX1D rose almost a fifth to 12.53, enough to price a move of about 0.8% for the Fed session alone. Beyond today the curve lost premium across the board. Nine-day, Nasdaq and small-cap vol each fell 5% or more, and contango held out to the one-year gauge.
• The midterm hump in November futures has flattened, with November and December now almost level, as the Fed, Thursday's GDP and PCE, megacap earnings and the 3 November vote merge into one block of event risk. SKEW eased and MOVE dropped below 100, so rates vol confirmed the calmer tone.

More in our Options Trading - Stock Market Analysis & News

Digital Assets

BITCOIN ~81,010 +0.29% | ETHEREUM ~2,358 +0.50% | IBIT 45.70 +1.06% | ETHA 53.03 +1.32% | AS OF ~06:00 CET

• Crypto equities outran the tokens on Tuesday, led by the miners as Anthropic's IPO filing revived the AI-compute trade. Cipher Mining gained almost 10%, with IREN and Riot close to 8%. Investors are pricing their data-centre capacity more than their bitcoin exposure. Circle, Strategy and Coinbase rose between 1% and 2%, while XRP and Solana edged higher overnight.
• Strategy ended a five-week buying run and instead spent USD 204.9m buying back its STRC preferred below par. That comes ahead of today's shareholder vote on daily dividends and Thursday's results. Fund flows split by asset: bitcoin ETFs took in USD 110.3m, all of it through IBIT, while ether funds shed USD 88.6m.

Commodities

• Oil: Crude trades higher amid reports of renewed US warnings of military strikes that could derail tentative diplomatic efforts that calmed the market on Tuesday. With uncertainty surrounding the Israeli election and the US midterms just days away, the risk of renewed escalation remains elevated. Ultimately, both Washington and Tehran need to agree on the way forward and that road remains elusive for now, and until credible signs of de-escalation emerge, the market is likely to remain highly sensitive to geopolitical headlines, with a substantial risk premium embedded in prices. Focus on EIA's weekly report, Israeli election, and FOMC.
• Gold trades lower after an Asia rebound to USD 4070 ran out stem with rising yields and a firmer dollar ahead of today's FOMC meeting weighing on prices. Having rebounded from key technical support around USD 3,970, the tug of war between short-term momentum sellers and longer-term accumulators continues, with bulls taking some comfort from the latest recovery and the market's ability to defend this important level. Resistance levels to watch: USD 4070 and 4230.
• Wheat: Futures extended their decline on Tuesday, with the December contract trading near a 3½-month low amid currency-related pressure and a fading Black Sea risk premium. The latest weakness followed reports that Moscow is considering proposals to secure grain shipments through the region, raising hopes of improved export flows and reduced disruption risks. December futures have fallen to around USD 6.11 per bushel, the lowest since July and down 23% from the multi-year high reached only last month.

More in our Commodity News, Analysis & Commentary

Fixed Income

• US Treasury yields rose Tuesday and early Wednesday ahead of the FOMC meeting. Bloomberg discussed an analysis of US Treasury and State Department data that noted a significant decrease in foreign purchases of US debt by nations traditionally allied with the US. Japan, for example, bought 99% less treasuries in the first eight months of this year relative to 2025. The benchmark US 2-year treasury yield rose overnight into early Wednesday in Europe, trading up 1.6 basis points from the Tuesday close at 4.75% as the market is pricing very low odds that the Fed will hike today. The 10-year benchmark treasury yield poked back above 5.00% overnight, rising almost three basis points to just above 5.02%.
• US high yield corporate bonds rallied on broad strength in risk sentiment Tuesday, with the Bloomberg index of the spread between US high yield bonds and US treasuries tightening fifteen basis point to 313 basis points.

Currencies

• The US dollar firmed further Tuesday and early Wednesday against the major European currencies, with the JPY a bit firmer in Wednesday’s Asian hours. EURUSD tested its recent 17-month low at 1.1113, while GBPUSD also dipped to a eight-day low well below 1.3300. USDJPY was steady just below 158.00 early Wednesday after rising Tuesday from 157.50, while EURJPY was heavy near recent cycle lows, trading around 175.50.
• The RBNZ surprised market expectations by not hiking the official cash rate, it cited concerns about the darkening global outlook and the rise in bond yields possibly triggering a downturn. The decision came even as the bank raised the near-term inflation forecast. The decision shocked NZD lower, sending AUDNZD from the 1.2370 area before the meeting to as high as 1.2600 at one point before it fell back to 1.2525, still a new 13-year high. NZDUSD plunged about -1.2% to near 0.5610 after trading 0.5680 before the meeting.
• EURGBP trades near17-month lows ahead of today’s Autumn Budget announcement from UK Chancellor Healey.

More on currencies in our dedicated section: Forex Trading News & Analysis