Saxo Market Compass - 9 February 2026 Summary
Market Overview
February began with significant volatility across various asset classes, but by the end of the week, markets found a degree of stability. The week was characterized by sharp swings in equity sentiment, driven by AI-related sell-offs and subsequent rebounds. Volatility remained elevated but orderly, while commodities experienced extreme price movements influenced by liquidity rather than fundamentals. Currency and interest rate markets reflected a reassessment of central bank policies rather than a clear macroeconomic shift.
Equities
US Market
The US equity market experienced a week of volatility but ultimately stabilized. Early weakness in technology stocks, particularly in semiconductors due to concerns over AI monetization and capital expenditures, was followed by a strong rebound. Earnings discipline emerged as a key filter for market performance, with notable dispersion in earnings results. Amazon's stock declined after announcing increased infrastructure spending, while healthcare stocks showed resilience.
European and Asian Markets
European markets remained rangebound, with significant stock-level movements. Germany and the Netherlands saw rebounds in industrials and technology, while UK equities faced mixed results due to a dovish Bank of England decision. In Asia, Japan's market outperformed following a decisive election outcome, while China and Hong Kong remained cautious amid global risk sensitivity.
Volatility
Volatility was a defining feature of the week, with the VIX index fluctuating but remaining within a controlled range. Short-dated volatility indicated a persistent demand for protection, reflecting a market environment where timing risk is crucial.
Market Sentiment
Options market activity suggested that investors are maintaining exposure while preparing for increased price swings. This behavior indicates a preference for resilience over outright conviction, with a focus on risk management becoming central to market participation.
Digital Assets
Digital assets attempted to stabilize after recent drawdowns, with Bitcoin and Ethereum prices reflecting macro risk sentiment. ETF flows indicated a cautious tone, with notable outflows from Bitcoin ETFs and selective selling in Ethereum-linked products.
Fixed Income
US Treasury yields fell sharply in response to weaker labor data, while European yields remained steady. The bond market regained relevance as a stabilizing portfolio component.
Commodities
Commodity markets experienced dramatic price movements driven by liquidity rather than fundamentals. Precious metals saw significant volatility, while oil prices eased due to reduced supply risks from US-Iran talks.
Currencies
Currency markets reflected shifting expectations around central bank policies, with the British pound weakening after a dovish Bank of England decision. The Japanese yen strengthened following a recent election, while the US dollar's performance was uneven.
Key Takeaways
- US equity markets showed internal rotation, particularly in technology.
- Volatility remained elevated but managed, with active use of short-dated protection.
- Options flows indicated a focus on risk management.
- Bonds regained their defensive role in portfolios.
- Commodity markets were influenced by liquidity-driven price action.
Looking Ahead
The upcoming week features critical macroeconomic data releases, including the US employment report and CPI inflation print, which will shape expectations for Federal Reserve policy. Earnings reports from major companies will also be pivotal in determining market direction.
Conclusion
While markets ended the week on a firmer note, investor confidence remains conditional. The balance between stabilization and renewed volatility will be tested as key economic indicators and earnings reports are released.