Market Quick Take – 28 May 2025

Market drivers and catalysts

• Equities: Trump delays tariffs; global stocks rally; tech and defense lead
• Volatility: VIX declines strongly; focus shifts to NVDA earnings, macro data
• Digital assets: BTC stable near highs; IBIT ETF inflows; crypto stocks surge
• Fixed Income: Weak 40-year JGB auction demand overnight despite reduced auction size
• Currencies: USD rebound continues. NZD firms on more hawkish than expected RBNZ
• Commodities: Gold drifts lower. Another false dawn for uranium?
• Macro events: Germany May Unemployment, US FOMC minutes, US 5-year Treasury auction

Macro data and headlines

• New Zealand’s Reserve Bank cut its Official Cash Rate by 25 basis points to 3.25% as universally expected, though the market was somewhat surprised by a dissenting hawkish vote and notes that not cutting rates at the meeting was discussed. See more under currencies below.
• Australia’s April CPI rose 2.4% YoY vs. 2.3% expected and 2.4% in March, while the core, Trimmed Mean measure rose 2.8% YoY vs. 2.7% in March.
• The EU aims to 'fast track' trade talks with the US amid tariff disputes. An EU Commission spokesman stated that a call between President von der Leyen and President Trump has renewed momentum for negotiations, with both agreeing to expedite talks and maintain close contact.
• Germany has given Ukraine the green light to strike deep in Russian territory after Russian missile and drone attack in Kyiv kills 12.

Macro calendar highlights (times in GMT)

0755 – Germany May Unemployment Change/Rate
0800 – ECB Apr. 1-year and 3-year CPI expectations survey
1400 – US May Richmond Fed Manufacturing Index
1700 – US Treasury to auction USD 70 billion of 5-year notes
1800 – US FOMC Minutes
2110 – New Zealand RBNZ Governor before parliament committee

Earnings events

• Today: Nvidia, Salesforce, Synopsys, Veeva Systems, Agilent, HP
• Thursday: Dell, Marvell Technology, Zscaler, Netapp
• Friday: Costco

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

Equities

• US: US stocks surged on Tuesday, with the S&P 500 +2.05%, Dow +1.78%, and Nasdaq +2.47%, as President Trump delayed the 50% EU tariff to July 9, sparking a risk rally. Tech and consumer discretionary led, with Nvidia up 3% ahead of earnings and Tesla surging 6.5% on Musk’s refocus announcement. Treasury yields fell sharply, supporting credit-sensitive stocks. Durable goods orders fell more than expected, but consumer confidence rebounded strongly. After the bell, Okta dropped 12% post-guidance. Markets await FOMC minutes and NVDA earnings for fresh direction.
• Europe: European equities extended gains, supported by the US-EU tariff pause and improving sentiment surveys. DAX +0.83% at 24,226.5, led by consumer confidence gains and €110bn German investment plans. Defense names rallied (Rheinmetall, Airbus) after US sanctions talk on Russia. CAC 40 finished flat, holding prior gains, with luxury weak but defense strong. Swiss SMI was little changed (+0.06%) as ABB gained on spin-off rumors. Eurozone economic sentiment firmed, but growth prospects remain muted.
• UK: The FTSE 100 +0.79%, lifted by defense (BAE +3.1%) and luxury (Burberry +5.3%), as US trade optimism and sector upgrades outweighed domestic inflation worries. Elementis jumped 11% on a business sale. IMF nudged UK growth forecasts higher, but BRC data showed the sharpest food inflation in a year. UK equities outperformed as they caught up after Monday’s holiday.
• Asia: Asian equities tracked Wall St. gains, with tech stocks leading ahead of Nvidia results. Nikkei rose 0.6%, KOSPI +1.1% on chipmaker strength. Hong Kong’s HSI rebounded 0.4% as China industrial profits improved, but lagged on PDD’s post-earnings drop. Xiaomi outperformed on strong Q1 results. Regional sentiment was capped by deflation and weak Chinese consumption.

Volatility

Volatility continued to recede: VIX closed at 18.96 (–7.8%), as stocks rallied and risk appetite returned. VIX1D and VIX9D plunged 39.5% and 13.2% respectively. Futures were calm, but all eyes are on NVDA’s after-hours earnings and upcoming macro events (FOMC minutes, US GDP, PCE) for the next volatility catalysts.

Digital Assets

Bitcoin steadied near $109,000, up slightly amid policy support at the Bitcoin 2025 conference, with fresh US legislative endorsements. IBIT ETF gained 1.1%, hitting a high at $62.50, as institutional inflows extended a record streak—over $500m in daily net buys, pushing AUM above $72bn. Major crypto stocks rallied: MARA +11.6%, RIOT +6.9%. Altcoins mixed, with ETH at $2,631 (–1.1%) and SOL –1.5%. Large Coinbase BTC outflows hint at continued institutional accumulation.

Fixed Income

• US treasury yields at the long end of the curve eased lower yesterday, with the 10-year treasury benchmark yield trading as low as 4.43% before rebounding overnight, while the 30-year benchmark closed below 5.00%. An auction of USD 69 billion of US 2-year treasury notes saw strong demand. Today the US Treasury will auction USD 70 billion of 5-year notes.
• Japan’s auction of 40-year Japanese Government bonds saw weak demand and JGB yields at the long end of the JGB Yield curve bounced back after the prior day’s steep fall in yields on news that indicated Japan’s Ministry of Finance was polling market participants on auction sizes to understand the demand picture. Indeed, the 40-year auction was for JPY 500 billion in bonds after years of auctioning JPY 700 billion in its auction of this maturity. The 10-year JGB yield also rebounded sharply, trading some 6 basis points higher than yesterday’s close at 1.53% in late Tokyo hours.
• Strong risk sentiment saw strong demand for US high yield corporate bonds yesterday, with the Bloomberg measure we track of high yield credit spread to US treasuries tightening some 14 basis points to 316 basis points.

Commodities

• Gold continues to trade lower as the US dollar strengthens trade talk optimism and after failing to break higher through technical resistance earlier in the week. Silver, meanwhile, trades lower but at a slower pace than gold, allowing the XAUXAG ratio to slip towards 99.
• Crude trades firmer, supported by a broad risk-on mood, but overall remains stuck close to midrange with another bumper OPEC+ production increase priced in for July, leaving prices somewhat exposed to an upside surprise should the 31 May meeting not yield a 400,000 b/d increase. Trump, meanwhile, said he’s considering new sanctions against Russia after drone attacks on Ukraine in recent days.
• Uranium and nuclear-themed ETFs trade sharply higher this week after Trump signed an executive order to overhaul and improve the US nuclear industry. While this is good news for the sector and undoubtedly over time will increase demand for uranium, it's worth noting that it may still take years before new reactors and with that demand for uranium are up and running, potentially raising the risk of a market running ahead of itself once again.

Currencies

• The US dollar continued to strengthen as US treasury yields eased lower yesterday and an auction of US 2-year Treasury notes saw solid demand. USDJPY rose as high as 144.77 before falling back and EURUSD nearly touched 1.1300.
• The New Zealand dollar strengthened overnight on the RBNZ rate decision, which brought the expected 25 basis point cut to take the rate to 3.25%, but the market was surprised that there was a hawkish dissenter looking for no cut and the meeting minutes showed that not cutting the rate was discussed. AUDNZD traded below 1.0800 for the first time in over three weeks as the NZ 2-year rate rose some 10 basis points.

For a global look at markets – go to Inspiration.