MARKET WRAPS
Stocks:
European stocks largely rose after as positive corporate updates helped sentiment.
The DAX was the one blight on the European picture, falling as SAP tumbled after earnings .
Oil prices rose to their highest level since late September, gold passed the $5,500 level, and the dollar fell, driven by concerns that the U.S. could carry out military action against Iran.
Trump ramped up pressure on Iran to negotiate a deal on its nuclear program, warning that a massive armada of U.S. warships was moving quickly towards the country.
Iran's foreign minister said the country's armed forces were ready to respond to any military action.
Investors were also digesting the Federal Reserve's Wednesday statement, in which it updated previous wording of moderate economic growth to solid, and deleted commentary that downside risks to employment have increased.
Commerzbank said this suggested the central bank wouldn't rush into rate cuts, as monetary policy was no longer restrictive.
"Powell may end his term as chair in May without the Fed deciding on another interest-rate cut."
Market Insight
The global investment environment has fundamentally changed, with more inflation, government intervention and market volatility , according to Schroders.
Thus, it prefers equities over bonds, as equities offer nominal yields--but debt might get inflated away--though it suggested investors should think of fixed income investment as an income, and not a protection strategy.
U.S. Markets:
Futures were rising, while investors weigh Iran risk, the Fed decision and earnings from tech megacaps.
Microsoft shares fell after its earnings, while Meta Platforms and Tesla shares rose following their results.
Earnings from Apple, Caterpillar, Comcast, Mastercard and Visa due.
Forex:
The euro's recent strength has fuelled debate about whether the ECB could cut rates, ING said, however it added the effectiveness of another rate cut to weaken the euro was doubtful, as the correlation between the euro-dollar exchange rate and short-term rate differentials had virtually disappeared.
"We'll instead need to see a significant break below $1.1900 before we can conclude the tide is turning on [euro-dollar]."
The dollar fell after Trump ramped up pressure on Iran and as investors weighed Wednesday's Fed decision.
Addressing the dollar's recent weakness as the Fed left rates unchanged, Powell said currency concerns are "fully under the purview of the U.S. Treasury."
ING said investors remained pessimistic on the dollar as they quickly shrugged off the Fed's more optimistic assessment of the economy on Wednesday and Treasury Secretary Scott Bessent ruling out U.S. intervention to support the yen.
"There are no signs that markets are ready to unwind dollar pessimism just yet."
"We may well be in the middle of a round of significant increase in dollar hedging as the dollar's safe-haven value deteriorates," it said, adding that strong U.S. data would be needed to help fuel a dollar recovery
Sterling looked heavily overvalued , particularly against the dollar, Oxford Economics said.
The currency was vulnerable and could drop in the event of an economic or political shock.
The upcoming local elections in May could act as a catalyst to pound weakness if markets perceive the election outcome as unfavorable and Sterling could fall to a range between $1.20 and $1.25.
Bonds:
The Treasury yield curve was steepening , with short-dated Treasury yields edging lower and those on longer maturities rising.
Madison Investments said, regardless of who is nominated to the Fed Chair, it will be difficult for the incumbent to implement an overtly political rate policy, adding that even a more dovish appointee would be constrained by a cautious, institutionally conservative FOMC.
"Efforts to push aggressively on the front end of the curve would likely result in higher long-term yields, ultimately working against the intended objective."
Commerzbank said the flow pattern was likely to be supportive for eurozone government bonds , including Italy's bond auction Thursday.
Italy's issuance of 2031- and 2036-dated BTPs and a 2035-dated CCTeu could provide some impulses, and was likely to be absorbed smoothly.
It added that large backflows from Italian and Spanish government bonds, amounting to 47 billion euros in total, could be reinvested as of today.
Energy:
Oil prices rose , driven by concerns that the U.S. could carry out military action against Iran.
Iran pumps around 3.3 million barrels a day and exports roughly 1.5 million barrels a day. "This will be the most immediate supply concern," ING analysts say.
Investors are also watching the Strait of Hormuz--a critical choke point where around 20 million barrels a day of crude flow--as any disruption could have far-reaching consequences.
However, "in the absence of an escalation, bearish fundamentals should once again take center stage, leading the market to trend lower."
Brent crude's rapid rise has gathered considerable momentum, based on the daily chart , UOB said, adding that if it broke above last September's high of $70.75/bbl, focus would shift to the July high of $73.63/bbl.
Metals:
Gold surged past $5,500 an ounce for the first time , extending a historic rally boosted by a weaker dollar and growing expectations that the next Fed chair will pursue further monetary easing.
Copper soared above $13,900.
Silver prices climbed to a fresh record.
EMEA HEADLINES
Nokia Reports Jump In Sales From AI And Cloud Customers
Nokia reported a sharp rise in sales of its network infrastructure equipment on surging demand from artificial intelligence and data-center customers.
However, softer guidance for the year ahead disappointed investors and sent shares 5.8% lower in early European trade.
Deutsche Bank Profit Beats Views on Lighter Costs
Deutsche Bank reported a fourth-quarter profit ahead of expectations on lighter costs and the sustained performance of its investment bank.
The German lender on Thursday posted an aftertax profit for the quarter of 1.57 billion euros ($1.88 billion), compared with 337 million euros for the same period the previous year, when the result was hit by litigation and restructuring charges. Analysts had estimated a 1.35 billion-euro result, according to a company-compiled consensus.
Roche Forecasts 2026 Growth, Helped by Strength of Drug Pipeline
Roche said it expects sales and core earnings per share to grow at constant currencies this year, partly due to the strength of its drug pipeline.
The Swiss drugmaker on Thursday said it expects sales to grow in the mid-single-digit range, with core EPS growth in the high-single-digit range at constant currencies.
Glencore's 2025 Copper Production Falls Despite Second-Half Recovery
Glencore's full-year copper production slumped on lower ore grades and recoveries despite a second-half recovery in output.
The Anglo-Swiss commodity mining and trading company said it had produced 851,600 metric tons of copper in 2025, an 11% fall from the prior year. Production in the second-half of the year was almost 50% above that of the first six months due to a rise in ore grades and recoveries at several of its mines, Glencore said.
GLOBAL NEWS
Why Powell Won't Say if He Is Staying on the Fed Board
For the fourth time since summer, Federal Reserve Chair Jerome Powell declined Wednesday to say whether he will remain on the central bank's board after his chairmanship ends May 15.
"Again, I don't want to get into this," Powell said at a news conference after the Fed's latest meeting.
U.S. Companies Are Still Slashing Jobs to Reverse Pandemic Hiring Boom
The new era of corporate cost-cutting is hitting American workers with full force.
Big companies from Amazon.com to UPS are slashing jobs, looking to shrink their head counts after years of breakneck growth. Companies generously expanded their workforces during the pandemic years of 2020 and 2021 and doled out hefty raises, worried that moving too slowly might leave them with a shortage of skilled workers.
China's Local Governments Cut Growth Targets
More than a dozen Chinese provinces have cut their economic growth targets for the year, stoking speculation that Beijing will follow suit and set a lower national goal for 2026.
Among the 20 Chinese provinces that have announced targets for 2026, 13 regions set lower goals, according to a tally published by Citi, based on official releases.
Coordinated Yen Intervention More Sugar Hit Than Long-Term Fix
SYDNEY-Speculation is rife that the U.S. and Japan could act jointly to support the yen. That is prompting traders to ask: Does intervention work?
If lessons from past efforts to prop up the Japanese currency are any guide, then investors should prepare for a short-term sugar hit before depreciation begins anew. Coordinated intervention is relatively rare, but analysts say the effect on markets is often the same.
U.K.'s Starmer Joins Ranks of U.S. Allies Testing China's Embrace
British Prime Minister Keir Starmer and Chinese leader Xi Jinping moved to improve ties in Beijing on Thursday as Britain's relations with the U.S. have slipped following President Trump's tariff increases and calls for the seizure of Greenland.
China has sought to woo U.S. allies amid the disruption, a point Xi emphasized as the two leaders met in the Great Hall of the People and together called for a "comprehensive strategic partnership."
Judge Temporarily Bars Trump Administration From Detaining Minnesota Refugees
A federal judge on Wednesday temporarily blocked the Trump administration from arresting or detaining refugees in Minnesota, and ordered the release of those in custody.
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01-29-26 0517ET
