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Market Quick Take – 15 May 2025

Market drivers and catalysts

• Equities: Mixed US session; tech outperforms; European luxury stocks decline; UK corporate setbacks; Asian caution
• Volatility: Slightly higher; caution ahead of economic data; VVIX elevated; futures indicate continued caution
• Digital assets: Bitcoin and Ethereum down slightly; institutional dominance continues; retail activity subdued
• Fixed Income: US yields rise, with long yields closing at new multi-month highs
• Currencies: Japanese yen firms as currency could be on US-Japan trade talk radar and despite rise in US yields
• Commodities: Gold slumps as haven demand dries up
• Macro events: US Retail Sales, US Weekly Jobless Claims, US May Empire and Philly Fed manufacturing surveys, US Fed Chair Powell to speak, Mexico Rate Decision

Macro data and headlines

• The FT leads with a story this morning that US authorities are set to announce a cut to the largest US banks' capital requirements, the supplementary leverage ratio. Such a move would allow the banks to leverage their balance sheets more, and many would see this initiative as aimed at the US treasury market to temper any further rise in yields, as banks could hold more US treasuries. Details are few, and one option might also be instead to simply exclude US Treasuries entirely from the bank leverage calculation.
• There is speculation that US officials met with Korean counterparts to discuss weakening the dollar, aligning with earlier rallies by the Taiwan and Hong Kong dollars. Reports suggest the US is pushing for a weaker dollar against Asian currencies in trade deals with major Pacific exporters.
• Trump signed agreements with Qatar’s Emir yesterday that “will generate an economic exchange worth at least USD 1.2 trillion”. This included the largest ever order for Boeing aircraft, some USD 96 billion. Also as Trump is in tour in the Middle East, Saudi Aramco announced USD 90 billion in agreements with US firms.
• Australian employment jumped by 89,000 in April, the biggest increase in 14 months, while the jobless held steady as more people sought work, highlighting the resilience of the labor market at a time where the RBA is expected to cut rates further.

Macro calendar highlights (times in GMT)

0900 – Eurozone Mar. Industrial Production
0800 – IEA's Monthly Oil Market Report
1215 – Canada Apr. Housing Starts
1230 – US May Empire Manufacturing
1230 – US Apr. Retail Sales
1230 – US Apr. PPI
1230 – US Weekly Initial Jobless Claims
1230 – US May Philly Fed Survey
1240 – US Fed Chair Powell to speak
1315 – US Apr. Industrial Production
1400 – US May NAHB Housing Market Index
1430 – US Weekly Natural Gas Storage Change
1900 – Mexico Rate Announcement
0300 – New Zealand Q2 Inflation Expectations

Earnings events

• Today: Walmart, Deutsche Telekom, Allianz, Mitsubishi Financial, Deere, Applied Materials, Take-Two
• Friday: Richemont

Next week:

• Monday: Ryanair
• Tuesday: Home Depot, Palo Alto Networks
• Wednesday: TJX Companies, Lowes, Medtronic, Snowflake, Target
• Thursday: Intuit, Analog Devices, Workday, Autodesk, Copart

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

Equities

• US: US equities were mixed Wednesday as investors weighed shifting trade policies and tech momentum. The S&P 500 +0.10% erased yearly losses, the Dow -0.21% fell slightly, while the Nasdaq +0.72% rallied led by chipmakers. Nvidia +4.2% rose on AI chip exports to Saudi Arabia, while AMD +4.7% gained on a $6B share buyback. Super Micro Computer surged +17% on AI optimism. UnitedHealth -8% dropped after a Japan central bank investigation. Sector performance varied, with tech and communication services outperforming and healthcare lagging amid tariff and policy uncertainties.
• Europe: European equities paused recent gains on Wednesday, with the STOXX 600 -0.24% and STOXX 50 -0.24% lower amid profit-taking and tariff concerns. Luxury stocks fell sharply (LVMH -2.2%, L'Oreal -3.3%), while banks such as Santander +1.7% and UniCredit +1.4% showed resilience. The UK's FTSE 100 -0.21% slipped on corporate setbacks including Imperial Brands -7.3% and Experian -2.9%, although Burberry surged +17% on positive restructuring news. Inflation in Germany and Spain continued easing slightly, adding a cautious tone ahead of key data releases.
• UK: The UK's FTSE 100 -0.21% declined, driven lower by corporate disappointments. Imperial Brands plunged -7.3% after a sudden CEO exit, and Experian -2.9% fell on weak guidance. AstraZeneca -1.6% also contributed negatively, outweighing strength from Burberry +17% after strong earnings. Investors await GDP data for policy direction cues amid mixed economic signals.
• Asia: Asian equities ended their rally Thursday, with investor caution returning ahead of Alibaba earnings and cooling US-China trade optimism. Japan's Nikkei -0.97% and Hong Kong's Hang Seng -0.73% retreated, while Australia's ASX 200 +0.21% edged up on robust employment data. Tech stocks faced profit-taking, despite recent AI-driven optimism. Tencent rose modestly after strong earnings but broader sentiment was cautious awaiting further trade developments and economic indicators.

Volatility

Volatility edged higher Wednesday with the VIX +2.2% closing at 18.62, as investor caution returned despite equity resilience. The volatility of volatility (VVIX) rose notably (+6.08%) to 97.16, reflecting uncertainty around trade policies and upcoming economic data. Futures markets indicate continued cautious sentiment, with modest increases in volatility (VIX futures +1%) highlighting investor anticipation ahead of retail sales, PPI, Philadelphia Fed Manufacturing Index, and Fed Chair Powell's speech.

Digital Assets

Crypto markets saw mixed performance, with Bitcoin (BTC) -1.08% trading around $102,393 and Ethereum (ETH) -1.42% at $2,573. Solana (SOL) -1.75% weakened despite recent bullish signals, while Shiba Inu (SHIB) faces critical resistance. Crypto-related stocks also struggled, although Coinbase +2.53% outperformed. Institutional flows continue dominating, overshadowing tepid retail investor activity, reflected by low Google search volumes for Bitcoin despite prices near highs.

Fixed Income

• US treasury yields rose all along the curve on Wednesday, with the 10-year treasury benchmark closing above the key 4.50% level for the first time since February, while the 2-year rose above 4.00%. There was little reaction so far to the news that US regulators may either cut commercial banks capital requirements or even exclude US treasuries from bank leverage calculations (the lead story above).

Commodities

• Gold's correction from last month's record high continues at pace after the US–China truce lowered haven demand. Weighing on prices are signs that Chinese buyers, a key source of demand in recent months, have stepped away—leaving prices exposed at a time when speculators in the West have been net sellers for weeks. While the technical picture looks soft below USD 3,200, with USD 3,000 the next major level of support, watch out for renewed dollar weakness to help stabilise prices. Silver’s two-day slump has taken it close to support at USD 31.64, ahead of the 200 DMA at USD 31.27.

• Crude prices fell for a second day as the tariffs pause relief rally faded after Iran showed willingness to strike a nuclear deal in exchange for sanctions relief, potentially adding to OPEC+ supply in the coming months. In addition, the EIA reported the biggest jump in US stockpiles since March. Today, the IEA will release its monthly oil market report.

Currencies

• The Japanese yen firmed sharply yesterday, likely in part due to a sharp move higher in the Korean won on rumors that US trade negotiators were pressing the country to allow its currency to strengthen. Despite the quite firm US dollar elsewhere, USDJPY tumbled from above 147.50 to below 146.00 before finding support, and JPY crosses nosedived, with GBPJPY near 194.00 this morning after posting highs since early January above 196.00 early this week.
• AUD found some support on a strong surge in payrolls in its April jobs report, although the unemployment rate remained steady at 4.1%. AUDUSD is midrange near 0.6435, but AUDNZD has rallied back above 1.0900, posting new local highs overnight.
• All eyes today on the US Retail Sales report for USD implications.

For a global look at markets – go to Inspiration.