MARKET WRAPS
Stocks:
Stocks were up across indexes in Europe, buoyed by expectations that Trump will appoint former Federal Reserve Governor Kevin Warsh as the next Fed chair.
The chair nomination is arguably the most important personnel decision Trump faces for the remainder of his term, and a final selection would bring to an end monthslong deliberations.
"Warsh is considered far less controversial and less overtly dovish than some of the other options that have been circulated ahead of the announcement of Trump's nomination," Saxo Bank said.
Banks rose strongly across Europe , but Commerzbank said dollar gains on reports of Warsh's appointment might be premature.
It said the currency's positive reaction reflected the view that Warsh has previously favored more restrictive monetary policy and could succeed in preserving the Fed's independence.
"The U.S. administration's attacks on the Fed are unlikely to stop just because a Fed chair chosen by Trump is now at the helm--after all, Jerome Powell was originally appointed by Trump too."
In London, oil companies fell as tension between the U.S. and Iran continued to push oil prices higher and point to potential disruptions in major trade routes in the region.
Market Insight
The outlook for emerging markets is positive despite near-term geopolitical uncertainties, according to Barclays.
"Emerging-market flows and assets appear well positioned to benefit from the quest for diversification, further fueled by dollar weakness and the surge in commodity prices."
U.S. Markets:
Stock futures were falling sharply to end another volatile week after disappointing earnings from Microsoft fueled a wider selloff in tech stocks.
Jefferies said, while it wasn't in the AI bubble camp, "We believe that the market will question the return on capital expenditure from the tech companies."
In addition to the Fed chair news, investors will watch for earnings from American Express, Canadian National Railway, Chevron, Exxon Mobil and Verizon Communications.
They will also be keeping an eye on Washington over the weekend as Federal government funding is set to expire Saturday.
Forex:
The euro has an opportunity to play a stronger international role on diversification away from the dollar, but officials seem reluctant to bear the negative side effects, Commerzbank said.
Officials don't want the euro to appreciate significantly, and European Central Bank members Martin Kocher and Francois Villeroy de Galhau recently raised concerns about the euro's strength dragging inflation lower.
The dollar rose following reports that Trump could nominate Warsh as Fed chair.
"This is an interesting pick from the President and may give the market some hope that Fed independence will be preserved by elevating a former Fed insider," XTB said.
CBA said, "While Warsh has recently argued for lower interest rates, markets have welcomed his historical reputation as a policy hawk amid concerns about potential erosion of Fed independence."
Sterling was unlikely to extend recent gains against the dollar much further given the lack of positive U.K. catalysts, Monex Europe said.
Bonds:
Treasury yields rose as investors turn their focus to Trump's likely announcement of Warsh as his choice for the next Fed chair.
TD Securities said Treasurys could steepen if Warsh's nomination eventuates.
If BlackRock's fixed income chief Rick Rieder is nominated, Treasurys would likely flatten, driven by a faster fall of long-end yields than short-end yields.
In either case, however, TD expected the reaction to be short-lived as the new chair would need to convince the rest of the committee.
The Treasury's quarterly refunding announcement will be a key point for investors next week, even as issuance volumes are likely to be unchanged for bonds and notes.
TD Securities said the Treasury could either signal increases later this year or drop the idea altogether , each with meaningful market implications.
Eurozone government bond yields rose , tracking Treasury yields and ahead of key data.
Focus is now shifting to the second wave of eurozone government bond syndication , which usually starts in early February, Commerzbank said.
OATs could outperform amid a gradual decline in the political premium priced in them , while February's relative supply and seasonality were also supportive for France, according to SocGen.
Energy:
Oil prices retreated following a three-day rally but remained on track for significant weekly gains as the possibility of U.S. military action against Iran keeps investors on edge.
"A broad risk-off shift hit equities and metals while the dollar strengthened, prompting profit-taking in crude markets," MUFG said.
Gas
Natural-gas prices rose .
Precious Metals
Gold retreated sharply after surging to fresh record highs, as traders booked profits and the dollar strengthened.
Silver also dropped more than 9%.
Base Metals
Base metals were lower after they resumed trade following a technical glitch in LME's electronic trading platform.
Base metals have been volatile, with moves reflecting tight prices in response to speculative macro risk sentiment rather than metal-specific fundamentals, says Sucden Financial in a note.
Positioning flows were likely to remain a dominant driver as Friday marks the end of the week and the month--when investors tend to aggressively flatten risk, it added.
"We would not be surprised to see further sharp, intraday swings as books are adjusted into the close."
Copper pulled back amid broader risk-off sentiment and a firmer U.S. dollar after breaking a new record in the previous session.
"While longer-term macro conditions remain supportive, several near-term micro drivers do not justify higher prices at this stage, increasing the risk of sharp pullbacks given the speculative nature of the latest surge, " Saxo Bank said.
EMEA HEADLINES
AstraZeneca Strikes Multibillion-Dollar Obesity Deal With China's CSPC
AstraZeneca said it entered into a collaboration and licensing agreement with China's CSPC Pharmaceuticals to gain rights outside of China to a portfolio of experimental obesity and diabetes drugs, in a deal potentially valued at billions of dollars.
The U.K. pharmaceutical giant said Friday that CSPC would receive an upfront payment of $1.2 billion and be eligible to receive development and regulatory milestones of up to $3.5 billion plus further payments linked to commercialization and sales targets. CSPC separately said the potential sales milestone payments could be valued at up to $13.8 billion.
Adidas Shares Gain After Buyback Plan, Revenue Rise
Shares in Adidas jumped after the German sportswear maker released preliminary fourth-quarter figures and announced a 1 billion-euro ($1.2 billion) share buyback.
The company late Thursday said the buyback-set to launch in February-reflected positive brand momentum and cash-flow generation, robust fundamentals and management's confidence in Adidas's future development.
Swatch Posts 2025 Revenue Decline Despite Second-Half Sales Recovery
Swatch Group posted a revenue decline for 2025 despite a sales recovery in the second half of the year.
The Swiss watchmaker on Friday posted 2025 net sales of 6.28 billion Swiss francs ($8.22 billion), down 1.3% at constant currencies from the prior year.
France's Economy Slowed Pace in 2025, Spain Continues to Outperform
The French economy last year grew at its weakest pace since 2020, hampered by the effect of U.S. tariffs that buffeted European economies, though Spain's run of beating forecasts endured.
France's gross domestic product rose 0.9% in 2025, down from 1.1% in 2024 and 1.6% in 2023, the country's statistics agency Insee said Friday. Meanwhile, Spain's economy grew 2.8%, one of the fastest rates among large developed nations globally, albeit marking a slowdown from the 3.5% of 2024.
GLOBAL NEWS
Taiwan's Economy Grew at Fastest Pace in 15 Years
Taiwan's economy expanded at the fastest pace since 2010 last year as it cashed in on the artificial-intelligence boom.
Gross domestic product rose 8.63% in 2025, accelerating from 5.27% in 2024 and beating economists' expectations for a more than 7% increase.
Trump Threatens to Ground Canadian Aircraft and Apply Tariffs to Imports
President Trump threatened to decertify Canadian aircraft and apply tariffs on imports in retaliation for what he described as the country's refusal to certify U.S.-made Gulfstream jets.
In a Thursday Truth Social post, Trump targeted to ground Bombardier Global jets as well as "all Aircraft made in Canada." He wrote that Canada needed to approve Gulfstream's G500, G600, G700 and G800 models. Without the approval, he said the U.S. could apply a 50% tariff on imports of Canadian aircraft.
Cuba Is Losing a Key Oil Supplier as U.S. Presses Mexico to Pull Back
MEXICO CITY-Mexican exports of oil to Cuba have slowed to a trickle as President Trump amps up the pressure on President Claudia Sheinbaum's leftist government to stop its support for the island's Communist regime.
Trump on Thursday issued an executive order declaring a national emergency that he said allowed him to impose new tariffs on any country that exports oil to Cuba. Mexico is one of a handful of nations that have in the past provided Cuba with oil over the years, a longstanding gesture of solidarity with the Caribbean island.
Panama High Court Gives Trump a Win Over Canal by Ousting Hong Kong Port Operator
The Supreme Court of Panama has annulled a contract for a Hong Kong company to operate two ports at either end of the Panama Canal, handing President Trump a victory for his security ambitions in the Western Hemisphere and denting China's influence in the region.
(MORE TO FOLLOW) Dow Jones Newswires
01-30-26 0516ET
