MARKET WRAPS
Stocks:
European indexes were mixed in choppy trading Friday ahead of key data releases on U.S. inflation and eurozone growth.
AI looked set to continue disrupting markets as a tumultuous week for global stocks draws to a close.
Attention turns to the CPI data at 1330 GMT for clues on the pace of Federal Reserve interest-rate cuts.
Signs of cooling inflation would revive expectations for rate cuts down the line, even after strong U.S. labor market data this week supported a prolonged hold.
The figures are expected to show price growth slowed to an annual pace of 2.5% last month, from 2.7% previously.
"Data of this ilk would reinforce the idea that the U.S. economy continues to experience gradual disinflation , despite the upside price risks presented by tariffs," Pepperstone said.
Eurozone second-estimate GDP data for the fourth quarter is due at 1000 GMT.
European Central Bank Vice-President Luis de Guindos and Bank of England Chief Economist Huw Pill are due to speak today.
Shares on the Move
European engine-makers shares rose in mid-morning trade, after Safran lifted its 2028 outlook. Safran was up 7.2%, MTU Aero Engines gained 2.3% and Rolls-Royce advanced 2.85%.
Stocks to Watch
Softer-than-expected sales from L'Oreal stem partly from the lack of momentum in China, as well as weak results in Asia's travel retail, J.P.Morgan said. Shares were down 5.7% at the open.
Sanofi's abrupt move to replace CEO Paul Hudson with Merck KGaA's head Belen Garijo only adds to near-term uncertainty for the drugmaker, Citi said.
Berenberg lowered its price target on Mercedes-Benz after the company's fourth-quarter car margin came in materially below consensus.
"2026 remains a transition year, with the combined impact of the premiumization strategy, restructuring benefits and China product/cost repositioning only to be felt from 2027/28."
Siemens Energy shares should have room to grow , Morgan Stanley said. Berenberg said the company's strong order momentum will support earnings growth.
Economic Insight
Variant Perception said U.S. inflation looked set to remain above target but the impulse is negative.
"We still expect the Fed to cut rates at least three times this year ."
U.S. Markets:
Stock futures were little changed, as investors braced for another day of AI jitters.
Concerns over the long-term outlook of tech, financial and logistics companies weighed down the major U.S. indexes Thursday , while investors sought shelter in government bonds.
Forex:
The dollar edged higher as U.S. trade concerns eased and investors await the U.S. inflation data.
The U.S. and Taiwan signed a trade agreement Thursday while Reuters reported the U.S. had shelved key tech restrictions targeting China ahead of an April meeting between the two countries' leaders.
Bonds:
Treasury yields rose in Asia trading hours ahead of the inflation data.
Ten-year Bund yields were expected to close the first quarter little changed from current levels , but were likely to end the year slightly higher, according to Citi's forecasts. The bank sticks with its year-end target of 3% for 10-year Bund yields.
Energy:
Oil prices were headed for weekly losses on expectations of rising global supply and easing fears of imminent disruptions in the Middle East.
The International Energy Agency lowered its forecast for oil-demand growth this year and said supply is set to rebound following January's losses due to the U.S. winter storm.
Meanwhile, comments from Trump that he would prefer to secure a nuclear agreement with Iran and intends to continue negotiations helped ease fears of possible U.S. military involvement.
Gas
The benchmark Dutch TTF fell and is headed for a weekly loss of 9%.
European natural-gas prices have been broadly rangebound in recent days, though concerns over low storage levels are weighing on sentiment.
Metals:
Gold prices rebounded after Thursday's slide.
"Gold recovered part of its recent losses as dip-buyers returned ahead of key U.S. inflation data , rising as much as 1.4% after 3.2% drop in the previous session, its largest one-day fall in a week," MUFG said.
Silver futures also recovered from the previous session's fall.
Iron ore
Prices declined in Asian trading. Both supply and demand were subdued amid a seasonal off-peak period, Nanhua Futures said.
Rare earths
BMI said Prime Minister Sanae Takaichi's electoral victory signals a continuing pivot in Japan toward securing rare-earth supplies outside mainland China .
EMEA HEADLINES
L'Oreal's Shares Drop After Soft End to the Year
Shares in L'Oreal slid after the French cosmetics giant closed last year with weaker-than-expected results amid a complex beauty market landscape.
The stock was 4.5% lower at 374.10 euros in European morning trading, having fallen as much as 7.1% earlier in the session. Since the start of the year, shares have risen 2%.
Ubisoft Shares Jump on Cash Forecast
Ubisoft Entertainment shares climbed after the "Assassin's Creed" maker said it would have enough cash to service upcoming debt maturities, reassuring investors as it overhauls its operations and gaming portfolio.
Shares in Paris gained more than 10% on Friday, clawing back some of this year's losses, but the stock is still down nearly 30% since January.
Safran Lifts 2028 Outlook On Strong Civil Engines Aftermarket, Defense Demand
Safran increased its 2028 forecast, citing the strong civil engines aftermarket, including maintenance and repairs, and growing defense demand.
The French aerospace-industry supplier on Friday said it now expects adjusted recurring operating income-its preferred measure of profitability-to range between 7 billion euros and 7.5 billion euros ($8.31 billion-$8.91 billion) in 2028.
NatWest Sets Out Performance Targets After Quarterly Beat
NatWest guided for further income growth and profitability this year as it reported fourth-quarter results that beat expectations.
"We start 2026 from a position of strength. That strength gives us the confidence to raise our ambition and accelerate our progress," Chief Executive Paul Thwaite said.
Swiss Inflation Holds Steady
Switzerland's annual rate of inflation was unchanged in the first month of 2026, reinforcing expectations that the Swiss National Bank will keep rates on hold at its next meeting.
Consumer prices were 0.1% higher in January than in the same month of last year, matching the rate of December, Switzerland's statistics office said Friday.
Capgemini Expects AI Demand to Fuel Growth in Year Ahead
Capgemini said it expects artificial intelligence-related demand to fuel growth in 2026, after AI services lifted orders in last year's final quarter.
The French consulting and information-technology company said Friday that it expects revenue growth of 6.5% to 8.5% this year when excluding currency movements, with an operating margin of 13.6% to 13.8%.
Novartis Says Vanrafia Drug Slows Kidney Function Decline
Novartis said its Vanrafia drug slows the decline in kidney function for adults with the progressive autoimmune kidney disease, IgA nephropathy (IgAN).
IgAN causes the small filters in kidneys to become inflamed and excess protein in urine, known as proteinuria.
GLOBAL NEWS
Forget the 'Sell America' Trade. Here Comes 'Hedge America.'
The threat that foreigners could dump U.S. assets-or "Sell America"-has loomed over markets since President Trump returned to office last year and upended the world order.
The slide in the dollar to multiyear lows is the clearest sign that foreigners are nervous about the U.S., where they have invested $36 trillion into stocks and long-term bonds. Foreign purchases of U.S. Treasurys have slowed, and some investors, like European pension funds, have turned to sellers.
BOJ Could Soon Declare Inflation Target Achieved, Hawkish Board Member Says
Bank of Japan policy board member Naoki Tamura floated the possibility that the bank could soon declare that its price target has been achieved, as the nation's inflation is becoming stickier.
"I believe that inflation has recently been shifting into an endogenous and sticky state, as the mechanism the bank is aiming for, in which wages and prices rise moderately in interaction with each other, has been maintained," Tamura said in a speech on Friday.
U.S. Is Sending Its Largest Warship to the Middle East
The Pentagon is sending the Navy's largest and most advanced aircraft carrier to the Middle East, as the U.S. steps up plans for a potential attack on Iran, two U.S. officials said.
The USS Gerald R. Ford carrier strike group is deploying to the region after spending several months in the Caribbean and Mediterranean. It will be joining the aircraft carrier USS Abraham Lincoln and nine other warships already operating in the Middle East.
America's Cattle Crisis: a Shrinking Herd, Soaring Beef Prices, and Little Relief in Sight
It's late morning in Central Texas Hill Country, and a Black Baldy is prodded into a small auditorium of Western hats and dusty ball caps. Her dark coat and stark white face is typical of this cow breed known for easy calving and attentive mothering. "It's going to go as a packer animal," says Tim Niedecken, who works for the Jordan Cattle Auction. He means that the cow will be sold by the pound for slaughter. Perhaps she no longer breeds well. More likely, the high price of beef is too tempting.
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02-13-26 0515ET
