Market Quick Take - 13 February 2025

Market Quick Take – 13 February 2025

Key points

• Equities: CPI-driven selloff; DAX, STOXX 50 hit highs; Heineken +14% on earnings; Alibaba +8.5% on AI news
• Volatility: VIX steady at 15.89; short-term indicators down; PPI, jobless claims in focus
• Digital Assets: Bitcoin -1.83%; Goldman Sachs raises crypto ETF holdings; XRP slumps 9.9%
• Currencies: USD retreats after spike on hot core inflation data yesterday. EURUSD threatening resistance on strong Euro.
• Commodities: Gold recovers quickly from sell-off. Silver threatening key resistance again.
• Fixed Income: US yields jump on hot US January inflation data.
• Macro events: Eurozone Dec. Industrial Production, US Weekly Jobless Claims, US Jan. PPI

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

Macro data and headlines

US President Trump says that Russian leader Putin is ready to negotiate an end to the Ukraine war, with talks to start “immediately”. The US is seen likely to demand that European allies provide protection against Russia along its eastern edges after any peace deal, with enormous EU defence spending needed to build any credible military force.

UK Q4 GDP estimate comes in this morning at +0.1% QoQ and +1.4% YoY, better than the -0.1%/+1.1% expected, respectively.

US January CPI ex Food and Energy rose 0.446%, above the 0.3% forecast, with the annual rate at 3.3% versus 3.1% expected. US headline CPI rose by 0.467% in January, exceeding the 0.3% consensus and accelerating from December's 0.393%. The annual rate increased to 3.0%, surpassing the expected 2.9%. Shelter costs rose 0.4%, contributing significantly to the overall increase. Energy prices climbed 1.1%, with gasoline up 1.8%, while food prices increased 0.4%, driven by a notable rise in egg prices.

Macro calendar highlights (times in GMT)

• 0900 – US Fed voter Goolsbee to speak on Odd Lots podcast
• 1000 – Eurozone Dec. Industrial Production
• 1330 – US Jan. PPI
• 1330 – US Weekly Initial Jobless Claims
• 1530 – US Weekly Natural Gass Storage Change
• 1700 – Norway Norges Bank Governor to speak
• 1800 – US Treasury to auction 30-year T-Bonds

Earnings events

• Today: Nestle, Siemens, Applied Materials, Unilever, Sony Group, Palo Alto Networks, Deere & Company, Moody’s, AirBnB, Coinbase, Twilio, DraftKings, Adyen, Datadog
• Friday: Hermes, Safran, Enbridge, Moderna, Fortis, Rakuten

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

Equities

• US: US stocks fell Wednesday as inflation fears surged following a hotter-than-expected January CPI print. The S&P 500 -0.27%, Dow -0.5% (-225 pts), while the Nasdaq 100 +0.1%. CPI rose 0.5% MoM, pushing the annual rate to 3%, fueling speculation that the Fed may hold rates higher for longer. The 10-year yield jumped 8.8 bps to 4.63%. Energy (-2.7%) led sector declines, while Consumer Discretionary (+0.34%) and Communication (+0.17%) outperformed. Meta (+18 days of gains) remains strong in AI, while Alibaba (+8.5%) surged on AI collaboration with Apple.
• Europe: European equities extended their rally, with DAX (+0.5%) and STOXX 50 (+0.3%) hitting fresh highs. Heineken surged 14.42% on strong Q4 earnings, lifting sentiment in the consumer space. Luxury stocks rebounded, with Kering (+7%), while Santander and BBVA gained over 2%. The Swiss Market Index (+0.16%) held firm despite US inflation concerns. Siemens Energy (+5%) saw strong revenue growth but lower profits, while LVMH and Hermès recovered from initial rate-hike concerns.
• Asia: Asian markets surged, driven by AI enthusiasm and easing geopolitical concerns. Hang Seng Index +2.7%, led by Alibaba (+8.5%), BYD (+10.1%), and KE Holdings (+10.2%). South Korea's KOSPI +0.7% hit a three-month high, with Hyundai Motor (+4%) and Kia (+2.2%) gaining on potential US tariff exemptions. Tech and semiconductor stocks rallied, with Samsung Electronics (+0.5%) and SK Hynix (+2.8%) rising.

Volatility

Markets showed muted volatility despite inflation jitters. VIX closed at 15.89 (-0.81%), reflecting contained market stress. VIX futures (March) at 17.37 (-0.63%) suggest little concern for near-term volatility spikes. Short-term VIX indicators declined, indicating lower risk perception. Traders are eyeing upcoming US PPI and jobless claims data, as well as key earnings from Applied Materials, Deere, and Palo Alto Networks.

Digital Assets

Bitcoin fell 1.83% to $96,066 after CPI inflation data dimmed hopes for imminent Fed rate cuts. Ethereum (-1.5%) and XRP (-9.9%) also retreated. Goldman Sachs significantly increased BTC and ETH ETF holdings in Q4, reinforcing institutional confidence. Meanwhile, Coinbase (+3%), MicroStrategy (+2.3%), and crypto miners (MARA, RIOT) gained, tracking broader market resilience. Trump's comments on a Russia-Ukraine peace deal briefly lifted risk assets but failed to sustain crypto momentum.

Fixed Income

• The US yield curve lifted vertically all along the curve on the hot core US inflation data for January. The market lowered odds of any additional rate cuts at coming meetings and the US 10-year benchmark yield rose as much as high as 4.65% before retreating to trade closer to 4.60% this morning.
• European yields rose in sympathy with their US counterparts and bear watching in coming sessions on US President Trump signalling that Russia’s Putin is ready to negotiate an end to the Ukraine war. The US position is seen likely to include demands that Europe rebuild its military to protect Ukraine, as well as leaving Europe to pay for reconstruction costs.

Commodities

• Gold and silver retreated sharply on the hot US inflation data, with gold posting a low of 2,864 before quickly snapping back higher to trade above 2,900, peaking above 2,920 overnight before pulling back. Silver traded in similar fashion, plunging to below 31.60 before rallying sharply back to 32.40 and thus threatening the key local resistance just above 32.50, which bars the way to the cycle top of 34.90 from last October.
• Crude oil prices dropped all day yesterday, in part on Trump announcing that he will negotiate with Putin to end the war in Ukraine. April WTI trades near local lows at 70.70 and April Brent trades near local lows at 74.60.

Currencies

• JPY crosses rose further on the pop in global yields in the wake of the hot US core inflation data, but the JPY found a low in the Asian session and pushed back slightly as US yields .
• The Euro has rallied broadly, with EURUSD well back above 1.0400 and pushing on two-week highs near 1.0440, while EURCHF has poked at the multi-month highs from January above 0.9515, perhaps on the anticipation of a sizable European fiscal program to invest in upgrading its military across Europe and rebuilding Ukraine.
• The US dollar rallied on the US inflation data, only to retreat again, with USDJPY erasing about half of the reaction to the data, while EURUSD recovered from a sell-off to trade to new local highs as noted above. AUDUSD threatens local 0.6300+ resistance.

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