MARKET WRAPS

Stocks:

European stocks were higher on Friday after Chinese economic growth data, and London stocks rose on media reports that mining majors Rio Tinto and Glencore held talks for a potential deal.

Positive news out of China that the country expanded by 5% last year, meeting its growth target, helped to boost sentiment.

Mining stocks Antofagasta, Glencore and Anglo American were among the top gainers in London's blue-chip index, lifted by reports of the Rio Tinto-Glencore talks.

Traders were also encouraged by the recent drop in government-bond yields, especially U.K. gilt yields. Retailers could fare less well after data showed retail sales unexpectedly fell by 0.3% during December.

Still, the data also increased the likelihood of the Bank of England cutting interest rates next month which is positive for stocks.

Luxury Sector

Given Richemont's third-quarter sales figures, one could assume that 2025 will be the turning point for the luxury sector, Vontobel said.

However, Chinese consumer sentiment remains depressed and the watches category is still fragile, it said.

"The coming weeks will be crucial, as Richemont's competitors will publish their results."

The Swiss luxury group has continued to gain market share, especially in jewelry, Vontobel said. It benefits from its iconic products that make excellent holiday gifts and new ones that have met great success, it added.

U.S. Markets:

Stock futures and bond yields edged higher.

More fourth-quarter earnings are due, including from State Street.

Stocks to Watch

Rivian Automotive said it closed a loan agreement with the U.S. Department of Energy for up to $6.6 billion to support construction of a new manufacturing facility in Georgia. Shares rose more than 3% premarket.

Activist investor Starboard Value has built a 7.7% stake in chip maker Qorvo, WSJ reported. Qorvo's shares rose in off-hours trading. Other chip makers also gained, with Nvidia and Broadcom each rising more than 1%.

Forex:

Sterling weakened against the dollar and euro after data showed U.K. retail sales unexpectedly fell.

December is typically a good month for retailers due to the Christmas period and these figures could increase the likelihood of an interest-rate cut by the Bank of England next month.

"Despite the festive season, consumers tightened their belts, with ongoing financial pressures and caution around the cost of living weighing heavily on spending," Ebury said.

Meanwhile, falling bond yields, prospects of more interest-rate cuts by the ECB and concerns about high debt levels in many eurozone countries are likely to keep the euro under pressure, Swissquote Bank said.

Traders are looking to sell the euro at levels above $1.0300, it added.

The dollar rose, rebounding slightly after recent falls. Investors are looking ahead to Donald Trump's inauguration on Monday and the prospect of tariffs and growth-boosting measures such as tax cuts.

These are expected to be inflationary and should boost the dollar. "For now, the dollar may stay in a holding pattern, retaining its overvaluation against some tariff-sensitive currencies," ING said.

"Despite stretched positioning and short-term overvaluation, the dollar continues to dodge true catalysts for a correction." Trump could spark volatility in currencies next week, ING said.

Bitcoin rose back above the key $100,000 level, reaching a 10-day high of $102,081 overnight, according to LSEG data. Traders are returning to cryptocurrencies in anticipation of Donald Trump's inauguration.

Bonds:

Yields on U.K. government bonds declined as more Bank of England interest-rate cuts look increasingly likely following weaker-than-expected retail sales data.

"Disappointing retail sales raise the risk of a small GDP fall in the fourth quarter, so the [BOE's] monetary policy committee will definitely cut rates in February," Pantheon Macroeconomics said.

With the European Central Bank in easing mode, a spike in long rates near the levels seen at the start of interest-rate cuts makes duration increasingly appealing, Societe Generale said.

"We recommend cautiously buying duration," the strategists say. While the 10-year Bund yield might rise to 2.80%, a move to 3% is unlikely, it added.

The selloff in eurozone government bond yields has gone too far and yields should move lower in the coming months due to further ECB interest-rate cuts, SEB Research said.

However, there are also factors which could push yields higher at times, including rising net supply of government bonds due to the impact of quantitative tightening, SEB added.

Reactions to the latest U.S. jobs and inflation reports show how sensitive the Treasury market is to macro data, SEB Research said.

"With the Fed likely on hold for some time, volatility looks set to continue for months to come."

SEB Research sticks to its end-2025 forecast of 4.75% for the 10-year Treasury yield.

Energy:

Oil prices were on track for weekly gains of more than 2%, boosted by supply disruption concerns following the latest round of U.S. sanctions against Russia.

"From a technicals point of view, the market is in overbought territory and so overdue a correction," ING said.

"However, mounting supply risks continue to provide broad support to oil prices." The market now awaits the return of Trump to the White House for more clarity on trade tariffs and potential sanctions on Iran and Venezuela.

Trump's Treasury Secretary pick Scott Bessent said he would support tightening sanctions against Russia, especially on oil majors, in an effort to end the war in Ukraine.

Metals:

Gold futures slipped, but remained up on week. Despite the downward correction early in the session, the precious metal looked set to end the week up 0.8%.

This reflects a combination of safe-haven demand ahead of Trump's inauguration and U.S. economic data sparking some renewed optimism for monetary policy easing, market watchers said.

That said, gold's potential gains have been capped by continued dollar strength over the past week, BMI said.

In the near term, BMI is bearish toward bullion, and expects spot gold to average $2,500 in 2025 amid a stronger dollar and a more hawkish Federal Reserve.


EMEA HEADLINES

U.K. Delays Basel Banking Reforms Again on U.S. Uncertainty

The U.K. is pushing back the implementation of the Basel 3.1 international banking reforms by one year to allow more time for the U.S. to clarify its approach under the Trump administration.

The Prudential Regulation Authority, a subsidiary of the Bank of England, said Friday that it is delaying the roll out of the final set of regulation to Jan. 1, 2027. In September, the regulator already postponed the implementation date by six months to Jan. 1, 2026.


Swissquote Expects Results To Beat Views on Crypto Demand

Swissquote Group Holding said its results for 2024 should exceed market expectations as its performance got a boost from cryptocurrency trading toward the end of the year.

The Swiss online bank on Friday said it expects to report pretax profit of at least 345 million Swiss francs ($378.8 million) on net revenues of around 655 million francs for the period ended Dec. 31. This is above estimates of 327.7 million francs and 622.8 million francs, respectively, taken from a company-compiled consensus.


Suess Microtec Shares Soar After Forecast-Beating Results

Shares in Suess Microtec surged after the German chip-equipment supplier reported full-year results that exceeded guidance, boosted by artificial intelligence's growing momentum.

Shares jumped as much as 21% to 49.55 euros in early trade Friday. They have climbed 81% over the past 12 months.


Israel Says Gaza Deal Reached, Putting Cease-Fire Back on Track

Israeli Prime Minister Benjamin Netanyahu said negotiators have reached an agreement on a cease-fire in the Gaza Strip that would free Israeli hostages, ending two days of debate that had underscored the pact's fragility.

The prime minister, who had accused Hamas of reneging on parts of an agreement originally announced Wednesday, said the country's security cabinet would meet to approve the deal Friday and that the full cabinet would be convened later to vote on it.


GLOBAL NEWS

Trump Plans a Day One 'Shock and Awe' Campaign. Here's What's in Store.

When President-elect Donald Trump takes office at midday Monday, his administration is expected to release an unprecedented flurry of executive orders to cut down the legacy of President Joe Biden's administration. Still, investors shouldn't take every move at face value.

In conversations with Republican lawmakers, Trump has said he is planning around 100 such orders beginning on his first day in office.


Trump Could Kick Off the Trade War Next Week. Why Markets Might Not Be Ready.

A big question for global markets is how President-elect Donald Trump, the self-described "tariff man," will enact his trade vision. His plan looks to tariffs-against both adversaries and allies alike-to address unfair trade practices, generate revenue, and create leverage in negotiations.

Trade experts and geopolitical strategists warn that markets might not be fully prepared for the potential longer-term ramifications, including geopolitical fallout and negative economic impacts.


Biden Issues Flurry of Executive Orders in Final Days. Trump Might Roll Them Back.

WASHINGTON-In his final days in office, President Biden issued a flurry of orders to rein in offshore drilling for fossil fuels, accelerate the build-out of data centers for artificial intelligence and promote cybersecurity against hackers.

The moves enacted sweeping changes across major industries, affecting billions of dollars of corporate projects. Some are sure to face challenges in the first days of the Trump administration as the new president seeks to roll back regulations he has said stifle economic growth.


Trump Ready to Bypass Congress on Border and Tariffs

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01-17-25 0535ET