A Look at the Day Ahead in European and Global Markets

Overview

Monetary policy has returned to the forefront as tech shares stabilize following the DeepSeek shock earlier this week.

U.S. Federal Reserve

The U.S. Fed maintained rates, leading to varied market reactions. Chair Jerome Powell’s dovish comments have left traders uncertain about the timing of future cuts.

Global Rate Decisions

• Sweden’s Riksbank: Cut rates but suggested the easing cycle may be over.
• Bank of Canada: Cut rates and flagged inflation risks due to U.S. tariffs, casting doubt on future reductions.

European Central Bank (ECB)

The ECB is expected to make rapid cuts, similar to the Bank of Canada, with potential risks from tariffs imposed by President Trump looming large.

U.S. Tariffs

The White House maintains President Trump’s plan for new tariffs, including 25% levies on Canada and Mexico and a potential 10% duty on China, despite recent diplomatic exchanges.

Market Trading Insights

European traders may not find clear signals from Asian markets as many are closed for lunar New Year. However:
– Tokyo recovered to positive territory.
– Sydney reached a record high.
– U.S. stock futures are rising after a weak previous close.

Earnings Reports

September saw mixed earnings from tech giants:
– Microsoft exceeded revenue estimates.
– Tesla fell short on profit margins.
– Meta projected lower revenue.
– Apple is set to report after market close.

European Market Strength

European stocks are starting strong following a record peak, buoyed by positive results from Dutch chip manufacturer ASML.

Key Market Developments for Thursday:

• ECB policy decision
• Earnings from companies like ABB, Deutsche Bank, H&M, Shell, and STMicroelectronics
• Apple’s earnings report

*(By Kevin Buckland; Editing by Edmund Klamann)