MARKET WRAPS
Watch For:
Manufacturing PMI data for EU, U.K., France, Germany, Italy; U.K. Nationwide house price index; trading updates from Julius Baer, Intesa Sanpaolo
Opening Call:
European stock futures declined in tandem with falls in Asian stock indexes; the dollar rose; Treasury yields edged lower; and oil and gold futures fell.
Equities:
Stock futures point to a lower open in Europe early Monday. U.S. stock futures were tracking lower following a massive sell-off in precious metals on Friday, which extended to early Monday.
Effectively, a deleveraging is happening, forcing traders to sell other assets to cover losses on their losing precious metals positions. That's contributing to the sell-off in stocks, said Kyle Rodda, senior financial market analyst at Capital.com.
Markets are digesting Friday's announcement by President Trump that he will nominate Kevin Warsh to succeed Jerome Powell as Federal Reserve chief. Corporate earnings are also in focus, with Alphabet due on Wednesday and Amazon on Thursday.
Forex:
The dollar could benefit from better clarity regarding Fed independence and monetary policy once Kevin Warsh succeeds Jerome Powell as Federal Reserve chief in May, analysts say.
Wedbush analyst Seth Basham foresees the end of the "Fed put," or monetary-policy intervention, under Warsh. "The Powell era's focus on suppressing volatility could give way to market discipline, where liquidity is no longer guaranteed outside of a crisis, but Fed credibility increases."
"A successful pivot would be positive for Treasurys and the U.S. dollar, but negative for gold and silver," Basham said.
Bonds:
"Bond markets have started 2026 in a bumpy fashion," Blackrock said, adding that this reinforced its analysis that "greater leverage can create vulnerabilities that expose the financial system to shocks like government bond yield spikes."
BlackRock said it currently favors mortgage-backed securities and emerging-market bonds. BlackRock also leans on private markets and hedge funds. "We suggest looking for a 'plan B' portfolio hedge as long-dated U.S. Treasurys no longer provide portfolio ballast - and to mind potential sentiment shifts," it said.
Energy:
Oil futures declined early Monday amid signs of U.S.-Iran negotiations that could reduce supply-disruption risks. President Trump told reporters that he believes Iran is negotiating seriously with the U.S. Also, American airstrikes on Iran aren't imminent, the WSJ reported, citing U.S. officials.
Additional oil-price downside is possible if the easing of geopolitical risk premium coincides with weakening fundamentals, said Ryan McKay, senior commodity strategist at TD Securities.
Metals:
Gold was likely to remain volatile in the near term, according to Phillip Nova's Priyanka Sachdeva. Gold rallied 24% in January before surrendering more than half of those gains in a single session.
"A price correction in gold was long overdue after the parabolic upswing witnessed throughout 2025; however, volatility remains firmly intact," she said, and advises investors to remain cautious as valuations remain high. "Further downside cannot be ruled out."
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Copper prices could be volatile in the near term as a clear trend has yet to emerge, said Nanhua Futures analysts. Investor sentiment has been dampened by weekend slumps in precious metals and other assets, they said. However, ANZ research analysts note that Chile's copper output fell 4.7% on the year in December, which may provide some support for prices.
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Iron-ore futures were lower. Prices were likely weighed by China's growing portside inventories of iron ore ahead of the Lunar New Year, said Commonwealth Bank of Australia's Harry Ottley.
TODAY'S TOP HEADLINES
The Silver Market Is Messed Up. These Buyers Are Feeling the Pain.
Last week, border police stopped a car crossing from Hong Kong into the neighboring mainland Chinese city of Shenzhen. The suspected crime: silver smuggling.
Two men in their 40s hid nearly 500 pounds of silver bars in 10 Danish-style cookie tins, six milk-powder tins and nine crispy egg-roll boxes. The estimated market value was roughly $782,000, according to Hong Kong customs authorities, who arrested the men and seized the bars and the cookies they were hidden under.
China Manufacturing Gauge Shows Pickup in Activity
A private gauge of China's manufacturing sector showed Chinese factories continued to expand activity in January, with production growing at a faster pace amid more new orders.
The RatingDog China general manufacturing purchasing managers index, compiled by S&P Global, edged up to 50.3 last month from 50.1 in December, according to a statement released Monday. The 50 threshold separates expansion in activity from contraction.
French Firm to Sell Division That Helps ICE Track Immigrants
PARIS-A French consulting and information-technology company has decided to sell a division that does business with ICE, after it emerged that the company has a contract with the agency to help track immigrants.
Paris-based Capgemini said it would sell a division that provides consulting services to government agencies in the U.S. The move came days after Multinationals Observatory, a nonprofit, highlighted a number of contracts the company has with U.S. Immigration and Customs Enforcement, including one worth $365 million to identify and find immigrants in the U.S.
Gaza Crossing Into Egypt Will Open to Palestinians Monday, Israel Says
The Rafah crossing connecting Gaza to Egypt will open to Palestinians on Monday, Israel said, marking the first time they can both enter and exit the enclave in more than two years-though restrictions will still apply.
Opening the crossing is the final major requirement in the first stage of President Trump's peace plan for Gaza and comes as Washington is eager to move to the next phase. The second stage of the plan requires Hamas to disarm, something the group has been resisting, and for Israel to ultimately pull its troops out of most of Gaza.
Luxury Brands Need a Comeback in China. They Shouldn't Count on It.
Chinese shoppers are returning to luxury stores, but with less appetite to spend and in greatly diminished numbers. That is disappointing for high-end brands desperate for fresh growth.
After five years of weak sales, some luxury brands said their China business recently turned a corner. Richemont, which owns Cartier and Van Cleef & Arpels jewelry, said sales started to grow again in China in the third quarter of 2025. British luxury trench coat maker Burberry also noticed an improvement last fall, and said demand accelerated further in the final three months of the year.
Oracle amps up its AI bet with a plan to raise as much as $50 billion this year
To finance its artificial-intelligence ambitions, Oracle is looking to raise more money at a time when Wall Street has gotten more worried about the level of financing underpinning the AI boom.
The company announced on Sunday that it intends to raise $45 billion to $50 billion in "gross cash proceeds" this year, split approximately between debt and equity issuance.
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Expected Major Events for Monday
05:30/NED: Dec Retail turnover
06:00/NED: Jan Netherlands Manufacturing PMI
07:00/GER: Dec Retail Trade
07:00/UK: Jan Nationwide House Price Index
07:00/TUR: Jan Turkey Manufacturing PMI
07:30/SWI: Dec Retail Sales
08:00/POL: Jan Poland Manufacturing PMI
08:15/SPN: Jan Spain Manufacturing PMI
08:30/CZE: Jan Czech Republic Manufacturing PMI
08:30/SWI: Jan procure.ch Purchasing Managers' Index
08:45/ITA: Jan Italy Manufacturing PMI
08:50/FRA: Jan France Manufacturing PMI
08:55/GER: Jan Germany Manufacturing PMI
09:00/GRE: Jan Greece Manufacturing PMI
09:00/EU: Jan Eurozone Manufacturing PMI
09:30/UK: Jan S&P Global UK Manufacturing PMI
10:00/CYP: Dec Retail trade
11:00/POR: Dec Industrial production index
16:59/AUT: Jan Unemployment figures
All times in GMT. Powered by Onclusive and Dow Jones.
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This article is a text version of a Wall Street Journal newsletter published earlier today.
(END) Dow Jones Newswires
02-02-26 0015ET
