- Market Round Up: Global equities traded mixed yesterday despite solid US job numbers, indicating a stable labour market. The S&P500 was flat, the Nasdaq dropped 0.2% whilst the Eurostoxx600 gained 0.1%. European energy names rallied yesterday with the sector gaining 3%, fuelled by an 8.4% jump in Siemens Energy, after the company reported a strong order backlog and projected revenue growth of 11%-13% for FY26. In the US, more defensive sectors such as Energy (+2.6%) and Consumer Staples (+1.4%) rallied. Chip manufacturer Micron gained 9.9% after CFO Mark Murphy reassured investors over the quality of their HBM4 chip performance. US Non-Farm Payroll data for the month of January far exceeded estimates (65k), adding 130k new jobs over the month, resulting in a drop down in the unemployment rate from 4.4% to 4.3%. Off the back of the news, traders priced a rate cut probability of 100% out from June to July. MBA Mortgage Applications showed sequential improvement week on week but was still negative at -0.3%. On the political front overnight, the Republican-led House passed legislation to end tariffs on Canadian imports. Asian equities have continued their strong start to the year, moving higher for a fifth straight day (MSCI Asia Pacific Index +13% YTD). Japanese stocks are up 0.7%, Hong Kong is down 0.9% whilst China is up 0.1%. The strong performance, in particular in Japan is a result of healthier relative valuations, supported by 3.1% rise in the materials sector today
- Day Ahead and Market Drivers: Equities: This morning saw the release of Q4 GDP in the UK which came in lower than expected at 0.1% (Est 0.2%) QoQ with YoY growth of 1.0%. December Industrial Production came in at -0.9% (Est. 0.0%) whilst Manufacturing Production was -0.5% (Est -0.1%). In the US we have initial jobless claims for the week ended 7th February (Est. 223k) and existing home sales data for January (Est. 4.15m).Looking at earnings today, from a coverage perspective we just have L’Oreal, who’s results will be released after market. In the US the main names to watch out for include Baxter International, Airbnb and Coinbase Global. In Europe the big names out today are Siemens and Unilever. FedEx will also host an investor day today, after the stock has increased an impressive 27.1% YTD.
- Stocks in focus: Smurfit Westrock (Overweight, PT $52.80, 5% upside) – Q4 results and medium-term guidance
- Bonds: European bond markets remained stable yesterday after a strong US employment report. The German 10-year dropped 2bps to 2.79% whilst in the US, the 10-year yield increased by 3bps to 4.17% after a weak 10-year auction. On the auction side the US is issuing $105bn and $95bn 4- and 8-week bills as well as a longer $25bn 30 year note with a fixed coupon of 4.875%. Italy will also issue a number of medium-term dated bonds today. Central bank speakers today include the ECB’s Cipollone, Radev, Stournaras, Lane and Nagel
- Commodities: Gold gained 1.2% yesterday, however this morning the precious metal is down 0.4% after rate cut expectations in the US were pushed out to July after a solid jobs data print yesterday. It’s a similar read through for Silver, up 4.0% yesterday, before retreating 1.1% this morning. In the energy space WTI gained 1.1% yesterday, spurred by geopolitical tensions. Oil is down 0.1% this morning.
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