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Market Quick Take – 6 May 2025

Market drivers and catalysts

• Equities: US breaks winning streak; DAX climbs; tariff worries linger; Fed meeting eyed
• Volatility: VIX and short-term volatility elevated; cautious sentiment ahead of Fed
• Digital assets: Bitcoin slightly lower; Strategy boosts BTC holdings; VanEck files BNB ETF; Solana patches security flaw
• Fixed Income: A quiet market after the recent sharp backup in US Treasury yields.
• Currencies: USDCNH sell-off fails to find fresh momentum, USD choppy ahead of FOMC meeting tomorrow.
• Commodities: China reopening drives fresh gold demand; Crude recoup Monday’s losses
• Macro events: US & Canada Mar. Trade Balance, US Treasury to auction 10-year notes

Macro data and headlines

• China’s Caixin services PMI fell to 50.7, the lowest in seven months, as US tariff impact bites.
• Trump announced he would impose 100% tariffs targeting the non-US film industry, impacting companies such as Netflix, Disney, and Amazon.
• US rejected Japan's request for full exemption from 'reciprocal' tariffs but may lower the 14% Japan-specific tariff. US officials told Japan's negotiator that only a cut in the 14% tariff, suspended until early July, is negotiable. The US may extend the suspension or reduce the tariff based on negotiation progress, according to sources.
• The US ISM Services PMI rose to 51.6 in April 2025 from 50.8 in March, surpassing expectations of 50.6. New orders and inventories increased, while business activity stayed in expansion (53.7 vs 55.9). Employment contracted less sharply (49 vs 46.2). Supplier delivery slowed (51.3 vs 50.6), and price pressures hit their highest since February 2023 (65.1 vs 60.9).
• S&P Global Canada Services PMI increased slightly to 41.5 in April from 41.2, marking a fifth consecutive contraction. New business and output fell near five-year lows due to uncertainty over US tariffs and the upcoming election. Firms faced job losses for the fourth month amid excess capacity.

Macro calendar highlights (times in GMT)

0715-0800 – Eurozone Final April Services and Composite April PMI
0830 – UK Final April Services and Composite PMI
1230 – US Mar. Trade Balance
1230 – Canada International Merchandise Trade Balance
1545 – Trump to meet Mark Carney
1700 – US Treasury to auction 10-year notes
2245 – New Zealand Q1 Unemployment Rate / Employment Change / Wages

Earnings events

• Today: AMD, Ferrari, Arista Networks, Duke Energy, Intesa Sanpaolo, Brookfield Asset Management, Transdigm Group, Constellation Energy, Zoetis, Marriott
• Wednesday: Novo Nordisk, Uber, Disney, Applovin, Unicredit, Doordash, Fortinet
• Thursday: Toyota, Shopify, Mercado Libre, ConocoPhillips, Nintendo, McKesson, Enel, Rheinmetall, Siemens Energy
• Friday: Enbridge

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

Equities

• US: US equities closed lower Monday, ending a nine-day winning streak as investors navigated strong economic data, tariff tensions, and uncertainty ahead of the Fed meeting. The S&P 500 fell 0.64%, Nasdaq declined 0.74%, and the Dow was down 0.24%. Trade concerns heightened as Trump proposed a 100% levy on foreign films, dampening market sentiment. Palantir dropped 9% post-market despite beating revenue forecasts. Berkshire Hathaway declined 5% following Warren Buffett's announced 2026 departure. Meanwhile, futures remain cautious ahead of key Fed updates expected to provide rate outlook clarity.
• Europe: European stocks ended mixed on Monday. Germany’s DAX rose 1.12%, marking a ninth straight gain and a new high since mid-March, boosted by Rheinmetall (+3.4%) amid expectations of higher defense spending under Germany's new conservative coalition. The CAC 40 in France dropped 0.55%, led lower by Kering (-4.4%) and Teleperformance (-2.8%). Swiss stocks declined slightly, impacted by unexpectedly flat April inflation data, while the FTSE 100 was closed due to a UK bank holiday.
• UK: UK markets were closed on Monday due to the May bank holiday. FTSE 100 futures indicate a positive opening on Tuesday, up 0.22%, buoyed by Shell’s potential acquisition interest in BP and ongoing cybersecurity concerns prompting government warnings to businesses.
• Asia: Asian stocks advanced on Tuesday, driven by optimism about potential US-China trade progress. China's CSI 300 rose 0.9% after returning from holidays, fueled by robust retail and travel data and positive signals on trade talks. Hong Kong's Hang Seng gained 0.5%. Markets in Japan and South Korea remained closed, resulting in thin regional trading volumes. Investor attention now shifts to China's upcoming economic data releases and the US Fed meeting outcomes later this week.

Volatility

The VIX rose 4.23% to 23.64, reflecting increased market caution ahead of the Fed’s interest rate decision. Short-term volatility indicators also climbed, with VIX9D rising 7.12%, suggesting heightened market anxiety. Options volume was low, with Tesla and Nvidia leading subdued activity. VIX futures remain elevated, indicating expectations of continued volatility amid trade tensions and pivotal economic events this week, particularly Wednesday's Fed announcement.

Digital Assets

Cryptocurrency markets edged lower, with Bitcoin down 0.4% at $94,369 and Ethereum losing 1.1% to $1,800. Strategy (formerly Microstrategy) expanded its Bitcoin holdings by 6,556 BTC, now holding a total of 555,450 BTC. VanEck filed for the first US BNB ETF, while Tether revealed an AI platform integrated with Bitcoin and USDT transactions. Solana resolved a major security vulnerability without any known exploit, easing investor concerns.

Fixed Income

• US treasury yields nudged slightly higher yesterday, with the 2-year benchmark about one basis point higher at 3.83%, while the 10-year benchmark rose three basis points to close at 4.34% The US Treasury will auction 10-year treasury notes later today at 1700 GMT.
• US High yield credit spreads tightened marginally yesterday, with the Bloomberg High Yield spread to US treasuries we track a single basis point tighter at 351 basis points, the narrowest spread in over a month, but far from the lows of the year below 260 basis points.

Commodities

• Crude trades higher for a second day, fully recouping Monday’s slump, with focus now turning from an already priced-in OPEC8+ production hike towards demand, which again depends on the global trade war and especially the ability to find solutions. However, with the Saudis signalling willingness to add more barrels, the upside will be paved with obstacles.
• Gold’s solid rebound from last week’s USD 3,200 low extended overnight, with prices reaching USD 3,287 on demand from China, the world’s biggest bullion buyer, following holidays. While the US dollar trades softer to support, Monday's near 3% surge continues to underpin gold's status as a safe haven.
• Silver has struggled to keep up with gold's renewed rally, leaving the XAUXAG ratio above 100, recently widening in response to central bank and Chinese investor demand for gold and weakening industrial demand for silver, especially driven by slowing solar production in China.

Currencies

• Less volatility across FX yesterday as the USDCNH sell-off failed to add any momentum after Friday’s large drop, while EURUSD meandered around the 1.1300 level and USDJPY choppy around 144.00 as bears are less aggressive after the backup in US 10-year treasury yields since Friday’s US jobs report. Still, USDJPY is well off the 145.92 high from Friday. Traders are eyeing guidance from tomorrow’s FOMC meeting as well as news on US trade deals for further inspiration.
• The AUDUSD upside breakout attempt failed to find fresh momentum, but has not yet dipped back into the range below 0.6440, likely needing fresh inspiration from both a strengthening of the Chinese renminbi and of course a weaker US dollar to challenge the next areas of resistance higher, starting with 0.6500-0.6550.

For a global look at markets – go to Inspiration.