MARKET WRAPS
Stocks:
European shares declined Wednesday, with the Stoxx 600 index falling further from Tuesday's lower session.
The FTSE 100, supported by financial and mining stocks , was in positive territory approaching midday. The CAC 40 fell , dragged by Dassault Systemes and the DAX was also down.
European defense stocks fell after the Financial Times reported that Ukrainian President Volodymyr Zelensky intends to announce a plan for presidential elections and a referendum on a potential peace deal on February 24.
Despite another heavy day of corporate earnings ahead, investors will be looking out for employment data coming from the U.S. after retail sales figures there were flat in December and added to concerns about a fragile consumer economy.
Analysts in The Wall Street Journal's poll expected 55,000 jobs to have been added in January, a little above 50,000 in the previous month.
There is the possibility that weak employment data could increase the risk of another interest-rate cut from the European Central Bank if the euro gains against the dollar.
The euro rose against the dollar and it would likely need to reach $1.25 to drive a material downward revision in inflation projections and possibly a rate cut, according to ING.
U.S. Markets:
Futures pointed to a mostly higher open after financial stocks came under pressure Tuesday and weighed on the S&P 500 and Nasdaq.
Forex:
The dollar fell against most other currencies as weak U.S. retail sales data bolstered Federal Reserve rate-cut prospects.
"The U.S. consumer spending may be weakening for real this time," Swissquote said. "Massive AI investment will certainly continue to do the heavy lifting, but it won't necessarily create jobs on a net basis. If that's the case, the two-speed growth in the U.S. will require the Federal Reserve's support to feel better."
Following Tuesday's worse-than-expected U.S. retail sales data, "skepticism could prevail in the market" and cause the dollar to fall in the event of weak job figures, Commerzbank said.
Sterling gained against the euro but the currency was at risk of renewed falls against the euro as U.K. political concerns persist and the Bank of England is likely to cut interest rates further, ING said.
"Polymarket continues to show a 70% probability of [U.K. Prime Minister Keir Starmer] resigning by June 30, and concerns about a less centrist Labour successor carry quite a bit of risk for sterling, given the potential fiscal implications."
Bitcoin fell to its lowest level since last Friday's selloff as investor sentiment in cryptocurrencies remained weak.
Bonds:
Treasury yields traded marginally lower ahead of the January employment data.
"We expect the overall picture to continue to point to a tepid development of the U.S. labor market," SEB said.
As the 10-year Treasury yield edged lower, Treasurys are seen as a key portfolio diversifier , currently trading around fair value level. Russell Investments said this makes bonds of other major countries potentially more attractive adding that it sees more opportunities in non-U.S. sovereign bonds, such as U.K. gilts, Australian and Canadian government bonds.
Yields on gilts were steady, remaining stable as political worries faded for now, after they rose sharply recently on concerns about a potential challenge to Prime Minister Keir Starmer.
"The immediate fear of the government falling is likely to simmer down and with it the immediate selling pressure for U.K. gilts," RBC said.
Government bond supply will be significant on Wednesday in Europe, with France's planned 30-year OAT syndication in focus after recent solid performance in French government bonds. Slovakia is also expected to tap markets, as will Germany, Greece, Portugal, Sweden, Norway and Switzerland.
Investors showed strong demand for long-dated Norwegian government bonds following the recent syndicated launch of a new 10-year bond, SEB said.
"Meanwhile, strong NOK performance recently has resulted in foreign profit taking in shorter maturities though overall the market has appeared rather balanced."
Data has shown foreign investor allocations at Treasury auctions rising in recent months, according to TD Securities. Foreign Treasury auction allotments have been rebounding for some time and allotments in both November and December jumped significantly.
"This hints that elevated term premium may be driving additional demand for Treasurys even as risks abound."
Jefferies favors eurozone peripheral government bonds and sees room for the spread between Italian and German 10-year bond yields to narrow further.
"We are happy to keep a long peripheral bonds position as our bias is for both Bund yields and spreads to move lower."
Term premium has helped drive 10-year Treasury yields higher since late 2025, TD Securities added.
"This hints that term premium could remain elevated even as yields decline if growth and Fed expectations slip."
Energy:
Oil prices rose, supported by uncertainty over the direction of U.S.-Iran talks.
"Geopolitical developments continue to dominate price action," ING said.
Natural Gas
Natural gas prices rose and Commerzbank said as inventories across the European Union risked falling below 20% of capacity by the end of winter if depletion rates remained at current levels.
Metals:
Gold prices rose in early trading as the latest U.S. economic data bolstered the case for further interest-rate cuts this year.
"While some policymakers have signaled patience on rates, expectations of potential easing remain a supportive factor for gold," MUFG said.
Copper
Copper prices rose in early trading but spot demand remained under pressure from softer Chinese buying and elevated prices, while inventories across Asia continue to build.
"Near-term trading is likely to remain subdued until after the Lunar New Year, with price direction hinging on the pace of post-holiday restocking in China. Broader macro sentiment and expectations for Fed easing will also be key drivers for metals in the weeks ahead," ING said.
EMEA HEADLINES
Ahold Delhaize Shares Jump After Growth in U.S. Online Sales
Shares in grocery retailer Ahold Delhaize jumped after the Dutch multinational's sales and operating profit rose in the fourth quarter, boosted by online sales in the U.S. despite political uncertainty.
Ahold Delhaize shares gained 7.6% to 37.4 euros in morning European trading.
Heineken Plans Thousands of Job Cuts to Weather Beer-Market Headwinds
Heineken aims to slash thousands of jobs to reduce costs as it grapples with weak beer-market trends.
As part of a plan to save hundreds of millions of euros a year, the Dutch brewer said Wednesday that it would cut between 5,000 and 6,000 roles over the next two years, or up to 7% of its current workforce.
Siemens Energy Books Record Order Backlog, Driven by AI Data-Center Boom
Siemens Energy said increasing demand from data centers is driving earnings growth, and helped the German maker of energy equipment notch up its highest-ever order backlog.
Grid and power-generation equipment manufacturers are benefiting from the rise of artificial intelligence and the need to power the data centers the technology relies upon.
TotalEnergies Slashes Buyback as Weaker Prices Weigh
TotalEnergies cut its quarterly buyback to $750 million of shares as earnings fell on weaker oil prices.
The French energy major said Wednesday that the uncertain price environment means its buyback will be lower than the $1.5 billion shares it bought over the prior quarter.
Vance Acknowledges Armenian Genocide, Then Deletes Post, Igniting Outrage
Vice President JD Vance posted on X acknowledging the Armenian genocide, and then deleted the post, upsetting Armenian diaspora communities in the U.S. and casting a shadow over his historic trip as the first sitting vice president to visit the country.
Vance on Tuesday waded into a fraught issue with an X post about his attendance at a wreath-laying ceremony at the Armenian Genocide Memorial in Yerevan, the nation's capital. It said Vance was doing so "to honor the victims of the 1915 Armenian Genocide."
Netanyahu Flies to D.C. to Keep Israel From Being Outflanked on Iran
TEL AVIV-Israeli Prime Minister Benjamin Netanyahu is making an urgent trip to Washington, as concern grows in Israel that the U.S. and Iran could agree to a nuclear deal that falls short of its requirements for ending the threat from Tehran.
The Israeli leader had weighed a trip to visit President Trump next week amid tensions with Iran and challenges with Trump's Gaza peace plan. But with U.S.-Iran talks that began last week in Oman set to continue, Israel has grown concerned the U.S. could compromise on points it considers crucial, and Netanyahu decided to leave for Washington on Tuesday.
GLOBAL NEWS
China's Consumer Inflation Eases, Producer Prices Stay in Decline
China's consumer inflation eased at the start of 2026 after reaching a near three-year high in December, as food prices declined.
The consumer-price index rose 0.2% in January from a year earlier, slowing from December's 0.8% gain, the National Bureau of Statistics said Wednesday. Economists polled by The Wall Street Journal had forecast a 0.4% increase.
Volatility Is Out, Stability Is In for Treasuries. What It Means for Stocks and Economy.
The U.S. debt market has been awfully steady lately. It's a blessing for the economy and stocks.
The 10-year Treasury note-a key debt issued by the U.S. government-has seen its yield move up or down only as much as 0.39 percentage points over the past six months. It's the narrowest trading range since October 2018, according to Dow Jones Market data team.
Treasury Allows U.S. Companies to Provide Supplies to Venezuela for Oil Production
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02-11-26 0509ET
