MARKET WRAPS
Stocks:
Stocks gained, with European defense stocks advancing after a weekend of remarks signaling a boost in defense spending.
French President Emmanuel Macron is hosting an emergency summit of European leaders in Paris to discuss Ukraine and security in Europe.
Stocks to Watch
The automotive, chemicals, food-and-beverages and aerospace sectors are the most exposed in Europe to U.S. reciprocal tariffs that could soon be imposed, according to Citi.
These sectors represent a greater share of the market size in France, Switzerland, Italy and Germany, while countries like Sweden and Spain seem less exposed, it added.
Dassault Aviation's share price could rise by between 11 and 23 euros a share if the group wins a potential contract from India for 114 fighter jets, Citi said.
U.S. Markets:
Markets are closed for the Presidents Day holiday.
Forex:
The euro's potential to rise looked limited amid uncertainty over the Russia-Ukraine conflict, ING said.
While efforts toward a ceasefire have helped at the margin, the "prospect of increased U.S. isolationism does not look positive" for the currency, it said.
"A much higher euro from here probably requires a conviction on some much softer U.S. [economic] activity data-a conviction we do not have."
The dollar continued to hover near two-month lows against a basket of currencies as investors digested Trump's latest tariff plans and Friday's weak U.S. retail sales data, Pepperstone said.
With Trump's reciprocal tariffs unlikely to come into effect until April, investors were betting there's plenty of time for negotiations, it said.
While it's tough to bet against the dollar amid continued tariff risks and high policy uncertainty, the currency needs a fresh catalyst to rally or it will "meander lower for the time being."
That's not helped by the U.S. data calendar being "devoid of anything particularly interesting" until March.
Sterling traders were likely to put an increased emphasis on upcoming U.K. employment data after recent remarks from BOE official Catherine Mann, ING said.
Mann's focus on a "non linear" fall in employment means Tuesday's jobs data could have a bigger market impact, it added.
UOB said the the pound was likely in an early recovery phase versus the dollar, based on the daily chart.
Bonds:
Yields on U.K. and eurozone government bonds rose as prospects of an end to the war in Ukraine boosted risk appetite and dented safe-haven bonds.
At the same time, any peace deal is expected to require vastly increased European defense spending, raising concerns about higher public debt.
Commerzbank said ahead of the German elections that, "with political headlines set to dominate this week, amid a light economic calendar, there could be more pressure on Bunds near-term."
Risk sentiment, partly driven by prospects for peace in Ukraine, could be further boosted by the unfolding political dynamics, it added.
Morgan Stanley now expects the 10-year Bund yield to end the year at 1.80%, up from its forecast of 1.65%.
"We incorporated mark-to-market adjustments and higher U.S. Treasury forecasts, resulting in an overall upward revision."
It retains a positive stance on duration but foresees a slower normalization at and below the 2% Bund target seen currently by the second quarter of 2025.
Danske Bank said there hasn't been clear direction in movement of 10-year Treasury yields since Trump's inauguration, and the direction for global bond yields still seems very uncertain.
Ten-year Treasurys have been trading with a yield between 4.40% and 4.60%, based on signals from the Fed as well as key economic data, however, there has been a clear path for the 10-year swap spread, which has widened some 10 basis points since late January, it added.
Energy:
Oil prices were little changed as U.S. officials prepared to meet with their Russian counterparts in Saudi Arabia to seek an end to the war in Ukraine.
"The spread between spot and one-month futures for WTI were trading at $0.01/bbl, down from $1.52/bbl about a month ago," ANZ said.
"This suggests demand for physical oil is currently subdued."
A Russia/Ukraine peace deal could potentially see the lifting of Western sanctions and resumption of some Russian flows to Europe.
Meanwhile, in an interview with Bloomberg, the president of Iraq's semi-autonomous Kurdistan region said oil exports could resume next month after being shut down for nearly two years.
Metals:
Gold futures rose amid volatile trading, though they appeared to be approaching overbought territory.
The growth trajectory of gold has become less straightforward, FxPro said.
Gold recorded a sharp selloff mid-week, though prices rebounded toward Friday--signaling that while buyers remain cautious, they continued to apply upward pressure, it said, adding that on a day-to-day basis, the precious metal has entered overbought territory on the RSI index, though historically, this has led to temporary pauses in rallies rather than reversals.
On a weekly timeframe, the market is still bullish, as any pullback in recent months has created space for further acceleration.
Gold chart
Comex gold futures' uptrend was taking a pause, based on the daily chart , RHB Retail Research said.
Copper demand
Copper edged higher amid signs of stronger demand.
China's retail sales and industrial production were higher, while the downtrend in developed economies has been reversing, ANZ said.
This has led to China's copper imports rising strongly and inventories falling, and while investors are still worried about the trajectory of U.S. tariffs, there aren't any tariffs on copper imports at this stage, it added.
EMEA HEADLINES
Swedish Private-Equity Group EQT Names Company Veteran Per Franzen New CEO
Swedish buyout group EQT named company veteran Per Franzen as its new chief executive and managing partner, replacing Christian Sinding, who will step down in May.
Franzen joined EQT in 2007 and currently serves as deputy managing partner and head of private capital Europe and North America, the company's largest business division with 113 billion euros ($118.57 billion) in total assets under management.
Galp Energia's Earnings Miss Expectations; Launches $262 Million Buyback
Galp Energia's fourth-quarter earnings missed consensus expectations but the Portuguese oil-and-gas producer still launched a 250 million euro ($262.3 million) share buyback.
Galp on Monday reported an adjusted replacement cost net profit-a metric is similar to net profit that U.S. oil and gas companies report-of 71 million euros. This compares with 171 million euros analysts had expected according to a company compiled consensus, and down from the 266 million euros it reported in the third quarter.
GLOBAL NEWS
China Sends Message to Tech Leaders: We Need You
Chinese leader Xi Jinping signaled to leading technology entrepreneurs and CEOs that he needed the private sector to deliver economic growth and self-sufficiency, more than four years after a crackdown by Beijing that dented confidence.
Many of China's most prominent businesspeople gathered in Beijing to meet Xi on Monday, according to a video shown on state television.
The New Plan for Western Companies Is ABC: 'Anything But China'
For a growing number of Western tech companies, "Anything But China" is the order of the day.
In recent years, many multinationals decided they had become overreliant on suppliers in China, prompting them to pursue a so-called "China Plus 1" strategy of augmenting China-based suppliers with those in other countries.
Jan. 6 Rioters Argue Pardons Apply to Charges Including Murder Plot, Child Porn
Less than a month after receiving pardons for participating in the Jan. 6, 2021 attack on the Capitol, some former defendants find themselves in a familiar place: back in court, facing other criminal charges.
There is Edward Kelley, who was pardoned for assaulting police at the U.S. Capitol, but who is now fighting another case. In November, a jury convicted him of conspiring to murder the Federal Bureau of Investigation agents who investigated his Jan. 6 participation, with evidence showing he had a "kill list" of targets.
Trump Asks Supreme Court to Let Him Fire Ethics Watchdog
WASHINGTON-President Trump's campaign to remake the federal government reached the Supreme Court on Sunday, when the Justice Department filed emergency papers arguing that Trump holds the constitutional power to dismiss an executive-branch ethics watchdog.
White House Personnel Office leader Sergio Gor fired the lawyer who heads the Office of Special Counsel, Hampton Dellinger, on Feb. 7 with a two-sentence email.
Write to clare.kinloch@wsj.com
Write to us at newsletters@dowjones.com
We offer an enhanced version of this briefing that is optimized for viewing on mobile devices and sent directly to your email inbox. If you would like to sign up, please go to https://newsplus.wsj.com/subscriptions.
This article is a text version of a Wall Street Journal newsletter published earlier today.
US
VN
TW
