European Midday Briefing : Shares Rebound as Bitcoin Recovers Slightly

MARKET WRAPS

Stocks:

Shares in Europe moved higher Tuesday, paring losses from a previous session marked by a cryptocurrency selloff and the broader souring of risk appetite.

Bitcoin was stabilizing after Monday's rout but gains were tentative and sentiment remained bearish .

Investors are awaiting eurozone inflation and unemployment data due out this morning. Also on slate is the OECD's latest global economic outlook.

Meanwhile, White House special envoy Steve Witkoff is expected at peace talks over the Ukraine war in Moscow.

Stocks to Watch

Bayer jumped after the White House backed a bid for a Supreme Court review in its Roundup weed-killer case.

Orsted is showing signs of operational normalization following two complex years with impairments, U.S. stop-work orders and inflationary pressures, Equita said.

Market Insight

The 2026 outlook for emerging markets is attractive, T. Rowe Price said.

They potentially offer improved earnings growth at more attractive valuations and many such economies are home to critical players in the AI infrastructure supply chain .

DBS said the cryptocurrency selloff may suggest major risk-off sentiment going into the new year.

Nonetheless, while the declines could be a point of concern for the U.S. economic outlook, DBS notes that such digital assets "don't make or break the U.S. economy."

U.S. Markets:

Stock futures were little changed early Tuesday, while Bitcoin prices stabilized below $90,000 after Monday's slide.

Earnings from Crowdstrike are due. Michelle Bowman, the Federal Reserve's top banking supervisor, is scheduled to speak.

Forex:

The dollar stayed weak after hitting a two-and-a-half-week low in the previous session on growing expectations of a Fed rate cut , cemented by a worse-than-expected ISM manufacturing report.

Sterling was flat against the euro. Convera said the pound remained heavily undervalued against the euro when measured against the U.K.-German inflation-adjusted real rate differential

Fiscal credibility was yet to be "convincingly re-established" after last week's U.K. budget and political uncertainty remains elevated, Convera added.

Bonds:

The 10-year Treasury yield was slightly higher. The previous day's rise in yields was mostly triggered by the growing likelihood that Trump had picked economic adviser Kevin Hassett as the next Fed chair.

Market gloom overnight on Wall Street somewhat brightened after Japan's 10-year debt auction drew solid demand , but risk recovery could be fragile.

The auction helped stabilize JGBs and other sovereigns, Swissquote noted.

Rising Japan yields and the potential repatriation of billions back to Japan could dim the outlook for risk assets.

Invesco said short-term rates may fall more quickly than long-term ones.

It retains a bias for steeper yield curves, preferring exposure at the very short end of the curve, such as two-year maturities.

Payden & Rygel expects 2026 to remain constructive for fixed income as bonds should benefit from a resilient global economy , moderating inflation and easier monetary conditions.

UniCredit maintains a neutral position on global bonds but keeps its overweight recommendation for emerging market debt.

"Despite lingering volatility, emerging market bonds continue to offer appealing carry and diversification benefits, supported by relatively sound fundamentals and easing inflation in several economies."

Energy:

Brent crude fell slightly in early trading as investors tracked continuing geopolitical tensions in Venezuela and Eastern Europe.

Unraveling of Russian supply chains in Eastern Europe and fears over supply from Venezuela continued to weigh on investors and present a downside risk to prices looking ahead, Citi said.

Julius Baer said recent geopolitical tensions aren't likely to change the long-term outlook for oil prices.

Metals:

Gold and silver fell back slightly in early trading, with silver retreating from record highs Monday driven by U.S. rate-cut expectations and supply tightness.

Julius Baer said silver prices could double for the first time since 1979.

Triggers for the rise include silver's addition to the U.S. critical minerals list and mounting expectations for a U.S. rate cut.

Iron ore

Prices were higher, supported by improving fundamentals . Supply and demand are getting better, Guangfa Futures said, but some analysts remain neutral on the black metal.

EMEA HEADLINES

Bayer Shares Jump After White House Backs Supreme Court Review in Roundup Case

Bayer shares rose after the company said it welcomed the U.S. Solicitor General's support for a Supreme Court review of a case that could curtail longrunning litigation regarding its Roundup weed-killer.

Shares in Bayer were up by as much as 14% in early European trading after the White House backed its bid for a review by the Court.

LVMH Appoints Pietro Beccari as Chair, CEO of Fashion Group

Luxury conglomerate LVMH said it has named Pietro Beccari as chair and chief executive of the fashion group.

LVMH's fashion group division includes brands like Celine, Givenchy, Kenzo, Loewe, Marc Jacobs, Patou, Pucci and Rossimoda.

BP Pulls Out of Hydrogen Project in Northern England

BP walked away from plans for a hydrogen hub in northern England, paving the way for a rival project to build a data center at a former steelworks site.

The U.K. energy group pulled its application for permission to develop the project-called H2Teesside-on Monday, citing a plan to bring forward a data center that resulted in a conflict over the same land.

U.S., U.K. Strike Deal on Higher Drug Prices

LONDON-Britain will spend more on new medicines in exchange for avoiding tariffs on U.K. pharmaceutical exports to the U.S., the first major success in President Trump's drive to get other countries to pay more for medicines that he says are unfairly subsidized by American consumers.

The U.K. government will raise the net price it pays for new patented medicines by 25% and revamp a tax program to ease the burden on drug companies, according to a statement Monday by the U.S. Trade Representative.

GLOBAL NEWS

Bitcoin Prices Fall in Sharpest Decline Since March Headline

The cryptocurrency slump is deepening to start the month.

Bitcoin was down about 7% in afternoon trading, poised for its largest daily decrease since March. The decline hurt shares of crypto-focused companies including Coinbase, Robinhood and Strategy. Broader U.S. indexes moved lower, while bond yields rose.

Superlong Japanese Government Bond Yields Keep Climbing as Rate Hike Bets Firm

Superlong Japanese government bond yields climbed further on Tuesday as market bets on an interest-rate increase intensified, stoking concerns that it could damp appetite for U.S. and other government debt by Japanese investors.

The 30-year Japanese bond yield rose 2 basis points to 3.410% during the session, representing a record high for the note. The 20-year yield also rose 1.5 basis points earlier to 2.905%, its highest level since June 1999.

Chinese Rare-Earth Dealers Find Ways to Dodge Beijing's Export Restrictions

Chinese rare-earth magnet companies are finding workarounds to their government's onerous export restrictions, as they seek to keep sales flowing to Western buyers without falling afoul of Chinese authorities.

The companies are tweaking magnet formulas to avoid using certain restricted rare-earth elements and devising other strategies to get powerful magnets out of the country, like embedding them in motors, according to employees of several large Chinese magnet companies and Western firms that buy from them.

Why Kevin Hassett Is Winning the Fed Chair Race Before It Has Ended

Officially, the search for a new Federal Reserve chair is still under way. A handful of finalists are scheduled to sit down for interviews beginning this week with Vice President JD Vance and senior White House staff.

Unofficially, the process seems to be all but over, with President Trump appearing to favor longtime adviser Kevin Hassett. If Hassett does end up the nominee, it will be because he met Trump's two key criteria: loyalty, and credibility with the markets.

Trump's Push to End the Ukraine War Is Sowing Fresh Fear About NATO's Future

BERLIN-This week will bring a split screen that will reinforce growing doubts in Europe about the American commitment to the alliance that has served as the bedrock of Western unity since the end of World War II.

On one side, White House special envoy Steve Witkoff will be in Moscow for the latest round of peace talks with the Kremlin over the Ukraine war. Witkoff, who has yet to visit Ukraine, is making his sixth trip to Moscow this year.

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This article is a text version of a Wall Street Journal newsletter published earlier today.

(END) Dow Jones Newswires

12-02-25 0516ET