MARKET WRAPS
Stocks:
European stocks rose Thursday, building on Wednesday's higher close, as investors weighed fresh economic data from the U.K. and awaited eurozone industrial production figures for November.
Europe's national bourses provided a mixed early picture as losses for defense and energy companies countered gains for luxury and tech stocks .
It comes as the British economy grew by more than expected in November with economic activity increasing by 0.3% in the month.
November's on-month growth makes a February interest-rate cut by the Bank of England less likely, the Institute of Chartered Accountants said , adding however that November's growth probably won't trigger a sustained economic revival.
Across the Channel, economists forecast the eurozone's industrial output grew 2.1% on year. The figures are scheduled for release at 1000 GMT.
Meanwhile, Germany's economy last year grew for the first time since 2022, rising 0.2%.
European energy stocks slid, so too did London-listed miners , as investors deemed it less likely that the U.S. will launch military strikes against Iran after there was a sign of a potential de-escalation of tensions between the two countries.
"Despite the pullback, regional tensions remain elevated, including Iran's temporary closure of airspace and US military repositioning," MUFG said.
This as officials from Denmark and Greenland said they haven't persuaded Trump in talks Wednesday to abandon his ambitions to annex Greenland.
Economic Insight
According to Standard Chartered, the defining theme of the global economy in 2026 will be a shift from monetary stimulus to fiscal stimulus. It expects more countries to turn to fiscal spending this year , implying higher government borrowing and bringing debt sustainability to the forefront of global economic debate.
Stocks to Watch
After an initial rally, European luxury stocks lost some of their exuberance following Richemont's third-quarter sales print. Luxury bears consider a deteriorating outlook for Richemont in Asia and China, Morgan Stanley said.
U.S. Markets:
Futures pointed to a higher open, with shares poised to rebound from Wednesday's retreat when concerns about high valuations and additional regulation weighed on tech stocks and dragged the Nasdaq composite to its worst day in nearly a month.
Forex:
The euro stayed lower against the dollar, showing little reaction to German economic growth data that came in line with expectations.
The euro remains driven by the dollar, which is higher following better-than-expected U.S. retail sales data Wednesday and amid growing support for Federal Reserve Chair Jerome Powell.
Sterling edged lower against the dollar and rose slightly against the euro after U.K. economic growth data exceeded expectations. Gross domestic product increased in November above the 0.1% rise forecast by economists in a WSJ survey.
The dollar rose slightly against a basket of currencies as traders continued to weigh Wednesday's U.S. retail sales and producer prices data and awaited other economic indicators.
Bonds:
Eurozone government bond yields were little changed in opening trade, with the 10-year Bund yield up slightly as supply thinned after heavy volumes of issuance so far this week.
Spain is set to hold a bond auction, including a new three-year bond, while Lithuania is expected to go ahead with a dual-tranche issue.
The constructive momentum in Bunds should remain intact as government bond issuance slows in the eurozone for the remainder of the week, Commerzbank said.
"Bunds stay bid and 10-year yields are testing the lows from last week."
The 10-year Treasury yield edged higher but yields were overall little changed in Asian afternoon trade, as data, geopolitics and monetary policy expectations remained the key inputs.
"At the margin, one could point to a broad increase in policy uncertainty driving a degree of caution, ranging from the Trump Administration's continued efforts to erode Fed policy independence, through to geopolitical risk escalating in the Middle East, while not forgetting the ongoing trade saga," Pepperstone said.
Energy:
Oil prices fell in early trading after Trump said Iran had stopped killing antiregime protesters, easing concerns over imminent military action against the country.
A strike could have threatened Iranian crude output and key shipping routes, raising the geopolitical risk premium significantly.
Gas
European natural-gas prices rose in early trading as unrest in Iran raised concerns about potential disruptions to global markets, despite easing fears of imminent U.S. action against Tehran.
"Parts of Asia, including northwest China, the Korean Peninsula and Japan are set to be hit by a cold wave, which threatens to push demand for heating higher," ANZ Research said.
Metals:
Gold prices fell as investors booked profits after the precious metal notched a record high Wednesday. Easing fears of imminent U.S. military action against Iran also weighed on demand for havens.
Silver prices retreated after hitting a fresh record on Wednesday as the U.S. stepped back from immediately imposing tariffs on critical mineral imports.
Copper futures on the London Metal Exchange fell as most of the metal's price rally has played out, leaving the market increasingly exposed to a correction, according to Goldman Sachs.
EMEA HEADLINES
Richemont Builds Steam as Jewelry Shines Again
Cartier-owner Richemont said jewelry sales continued to drive revenue growth at the end of the year, offering fresh good news for a luxury-goods sector hoping to build momentum over the year ahead.
The Swiss group, which alongside star jewelers Cartier and Van Cleef & Arpels houses high-end watchmakers like Vacheron Constantin and fashion brands including Chloe, booked sales growth of 11% at constant exchange rate to 6.4 billion euros ($7.45 billion) in the third quarter of its fiscal year through December. That was a little higher than analysts' expectations of 6.28 billion euros in revenue for the quarter, according to a consensus compiled by FactSet ahead of the release, and marks a moderate pick-up in the pace of growth from its first half.
Rio Tinto, BHP Join Forces to Unlock More Australian Iron Ore
Rio Tinto and BHP Group have agreed to work together on some new projects at neighboring iron-ore mines in Australia that could help bolster their future production of the steel ingredient.
The companies said that by collaborating on new projects at their neighboring Yandicoogina and Yandi iron-ore operations in Australia's Pilbara region, they could extract up to 200 million metric tons of iron ore, some of which might have otherwise been stranded.
Bayer Shares Surge as Partner Forecasts Sales Growth for Prostate-Cancer Drug
Shares in Bayer jumped 6% after Finnish pharmaceutical company Orion predicted strong growth for darolutamide, a prescription prostate-cancer medication on which the two companies partner.
Bayer stock gained 5.8%, or 2.26 euros, to 41.2 euros in early afternoon European trading Wednesday. Shares in Orion also leapt on the announcement, gaining 12%. The Helsinki-listed company is the biggest riser in the Europe-wide Stoxx 600 index.
Eurozone Could Make Up for Lost U.S. Exports by 'Modest' Reduction in Internal Barriers, ECB Economists Say
The eurozone could replace the economic output it has lost as a result of higher U.S. tariffs on its exports through "modest" reductions in barriers to trade between members of the European Union, according to economists at the European Central Bank.
As a result of President Trump's tariff hikes, many European businesses now face a duty of 15% when selling their products to U.S. customers. ECB economists estimate those higher tariffs will reduce exports and lower the eurozone's gross domestic product by 0.7 percentage point through 2027.
GLOBAL NEWS
Why oil experts say U.S.-Iran tensions feel different this time compared with previous crises
Oil prices on Wednesday settled at their highest level in over three months, driven up by fears that the geopolitical situation in the Middle East may be heading into a deep, downward spiral.
U.S. prices eased somewhat from Wednesday's $62-a-barrel settlement in overnight trade on signs of a de-escalation of tensions between the U.S. and Iran, but the threat of U.S. military intervention still holds a grip on Wall Street. This week's price jump comes as a warning shot of where prices could go from here, given that any spark of conflict between the U.S and Iran could quickly become more widespread within the oil-rich Middle East.
Banks and Crypto Clash Over Tokens That Pay More Than Deposits
WASHINGTON-The cryptocurrency and banking industries are locked in a lobbying battle over digital tokens that yield annual payouts, a fight that threatens to derail legislation intended to bring crypto into mainstream finance.
The two sides are clashing about what crypto firms call rewards, or annual payments to investors based on a percentage of their total holdings. They are commonly used for stablecoins, popular tokens typically pegged to the U.S. dollar and used for trading, overseas payments and money transfers.
Trump Puts 25% Tariffs on Chips. It Only Matters to Nvidia and AMD-for Now.
President Donald Trump on Wednesday signed two executive orders to impose tariffs on some semiconductors and prepare for tariffs on critical minerals, if needed.
The semiconductor order codifies what Trump said in December when he implied that Nvidia would pay the U.S. 25% of H200 chip sales to China.
5 Signals From the Fed's Beige Book That Explain the Economy Right Now
(MORE TO FOLLOW) Dow Jones Newswires
01-15-26 0507ET
