With markets looking for direction on the magnitude of forthcoming cuts by the Fed, US labor data took center stage this week. JOLTS data set the scene with a weakening picture of the labor market, followed by Non-Farm Payrolls, which also missed vs expectations, spurring bets of a 50bps rate cut this month. Markets are sensitive to data and volatility is elevated. The US macro picture had plenty of flow on to various asset classes, more on this week’s key stories below.

The chips are down
Semiconductor shares experienced a sharp selloff lead by Nvidia falling more than 9% on Tuesday, shedding around $279 billion in market value off the firm that has been the focal point of a boom in enthusiasm around the applications of AI. Other chip stocks, including AMD, Intel and Broadcom, also suffered major losses with investors worried about economic indicators and potential recession signals. On Friday Broadcom fell 10% as revenue guidance disappointed leaving share -14% lower on the week.
Nvidia and semiconductors sell-off could continue

Oil tumbles, wiping out year to date gains
Oil continued last week’s downward trajectory, dropping 7.5% on the week, testing the lows of last year. The move comes as the demand outlook weakened while supply was expected to increase as OPEC+ unwinds production cuts and Libyan supply also comes back online. The price found a floor after news OPEC+ may delay production increases. Client activity in oil futures ramped up this week with trading in Brent and WTI contracts up 78% and 52% week on week respectively.
Chinese Economic Woes Drag Down Crude Oil

Volkswagen finds itself in a jam
Volkswagen is considering shutting factories in Germany for the first time in its 87-year history. Lower than expected demand for electric vehicles in Europe has hit the region’s carmakers, including VW, which is also struggling with a shrinking market share in China, its most profitable market. The latest move comes after a savings programme launched last year has fallen short of several billions of euro. Volkswagen shares fell around -3.5% on the week.
For Volkswagen, the bumpy road to electric vehicles starts to hit home

USDJPY makes another step lower
Markets entered risk off mode earlier in the week which saw another opportunity for traders to flock to haven assets, the yen included. Hawkish comments from Ueda added to price pressure as the risk of the carry trade unwinding refreshed reason for yen strength. USDJPY was by far the most Saxo traded FX pair this week with 5 times more trades than the runner up. Yen strength had a heavy impact on Japanese equities with the Nikkei 225 down 5.84% on the week. However, Saxo clients maintain a steady 50:50 balance on long vs short the Japanese index.
JPY: Safe-Haven Appeal on Display, Carry Unwind risk on the Radar

The ECBs latest interest rate decision will be announced next Thursday with expectations for a 25bps cut taking the rate to 4%. The market will also get the latest inflation data in the form of CPIs from China (Mon), Germany (Tues), US (Weds), France (Fri). Earnings highlights include Oracle out Monday evening, Adobe and Lennar Corp after the bell on Thursday.