OTP Morning Brief: commodity-linked shares offset the tech sector’s losses
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OTP Morning Brief: Once again, Donald Trump’s words moved the markets
Markets were once again driven by news related to the Iran war on Wednesday. President Trump suggested that the United States could bring the conflict to an end even without an agreement with Iran. Oil prices eased toward $100 on Wednesday. The sharp rally in Asian markets was followed by a rebound in Europe. The German 10-year yield fell below 3%, while the Hungarian 10-year yield dropped below 6.9%. The U.S. equity indices continued to rise on Wednesday. U.S. retail sales rebounded in February. The ADP reported a 62,000 increase in employment, and the ISM manufacturing PMI climbed to a nearly four-year high in the United States. Hungary’s government deficit amounted to 4.7% of GDP in 2025. The U.S. March labour market report is due on Friday. Market sentiment turned by Thursday morning following remarks by Donald Trump.
OTP Morning Brief: There have been signs of a de-escalation of the Middle East conflict
Both the United States and Iran have signalled an easing of tensions. Key European and US indices, as well as stock markets in the CEE region, climbed. Headline inflation accelerated sharply in the eurozone in March, while core inflation slowed on an annual basis. In March, WTI rose by 51% and Brent by 63%. Developed economies’ bond yields fell, and the euro strengthened against the dollar. Domestic bond yields fell. The forint strengthened against the euro. The Hungarian Central Statistical Office (KSH) will publish the government sector’s fourth-quarter balance today. In the eurozone, February’s unemployment rate will be released. In the United States, the ADP Institute will release its March employment data, and the ISM Institute’s March manufacturing index, as well as retail sales data for February, will be released.
Europe’s markets moved sideways yesterday, when commodity-linked shares offset the tech sector’s losses. US stock markets fell on Tuesday. The government shutdown in the USA ended again. Oil prices rose amid Middle East tensions. The EUR/USD is once again above 1.18. Hungary’s long-term bond yields dropped. Services sector activity increased in China. The euro area’s inflation data and Alphabet's earnings will be in focus today.
Europe’s stock markets moved sideways, commodity-linked shares offset the tech sector’s drop
European markets made subtle movements on Tuesday, thus the Stoxx 600 index inched up 0.1%. Of the major indices, the UK's FTSE 100 (-0.3%), France’s CAC40 (-0.1%) edged lower, while Germany’s DAX closed flat – all of this was offset by the 0.9% increase in Italy’s FTSE MIB, which drew near a peak last seen in 2000. Of the various sectors, basic resources (+4.2%) excelled, benefiting form a rebound in precious metal prices: reversing Tuesday's decline, gold bounced back 5.2%, and silver grew by 5.3%. The media (-5.9%) and the tech (-4.2%) sectors had a less lucrative day; the latter was dragged down by stocks such as Infineon (-1.9%) and SAP (-4.6%). Europe’s largest asset manager, Amundi, gained 1.7% after reporting higher-than-expected net capital inflows in the fourth quarter. Novo Nordisk said it expects its profit and revenue to shrink by up to 13% this year due to US price pressure, strong competition, and the expiry of semaglutide patents. Accordingly, its shares listed in New York plunged 14.6%.
The sentiment was noticeably better in the CEE region, where the PX50 (+0.3%), the BUX (+1.5%), and the WIG20 (+2.3%) all posted gains. Hungary’s blue chips made nice gains, particularly MOL (+2.4%).
European natural gas futures continued Monday’s decline on Tuesday, sinking by 3.7%, to 34.2 EUR/MWh, indicating that concerns about LNG supply have eased.
America’s stock markets declined on Tuesday, the US government shutdown has ended, Middle East tensions drove oil prices higher
US indices slipped yesterday as investors worried about shrinking margins owing to overinvestment in AI and intensifying competition. Accordingly, the Nasdaq fell the most (-1.4%), followed by the S&P500 (-0.8%), and the Dow (-0.3%). AI giants Nvidia and Microsoft both fell 2.8%. Alphabet sagged ahead of its flash report today. Accordingly, the biggest loser in the S&P was technology (-2.4%). The exception within the sector was Palantir’s 6.9% rally, on the back of its positive earnings report. Soaring 3.4%, the materials sector outperformed in America too. In individual stocks, Walt Disney dropped slightly after appointing theme park chief Josh D’Amaro as the next CEO, thus ending uncertainty over succession. PayPal shares dived 20.3% as its 2026 profit forecast missed analysts’ estimates.
Donald Trump signed a budget deal that ended the partial government shutdown, restored funding for several agencies and gives lawmakers until 13 February to negotiate easing immigration restrictions; then, funding for the Department of Homeland Security (DHS) will be suspended again. The deal passed with broad, bipartisan support in Senate and narrowly in the House, as Democrats push for further restrictions on Donald Trump’s immigration policies in the wake of recent deadly incidents.
Brent crude oil futures rose by 1.6%, to 67.3 USD/barrel, while US WTI increased by 1.7%, to USD 63.21, as recent events have raised concerns that negotiations aimed at easing tensions between the United States and Iran could come to a halt. The US military said on Tuesday that it had shot down an Iranian drone that had "aggressively" approached the aircraft carrier Abraham Lincoln in the Arabian Sea. According to maritime sources and a security consulting firm, a group of Iranian motorboats also approached a US-flagged tanker in the Strait of Hormuz, north of Oman.
The EUR/USD went back above 1.18, Hungary’s long-term bond yields sank
Advanced economies’ bond markets opened with gains on Tuesday, even as France’s inflation data came in much lower than expected, but the trend reversed in the afternoon. European bond yields upped by 2-3 basis points; Germany’s 2.9% yield closed near the upper edge of its post-pandemic trading range. Yields on the US bonds edged lower by the end of the day; the 10Y one sank to 4.27%. The dollar’s weakening sent the EUR/USD above 1.18 once again.
The EUR/HUF did not budge, it hugged the 381 mark. In Hungary’s bond market, however, the rapid decline in yields on long-term maturities continued yesterday: the 10Y yield shed 3 basis points, below 6.5%, and the 20Y sank by nine basis points, to the vicinity of 7%. In yesterday’s auction, the ÁKK offered HUF 30 billion debt in three-month discount Treasury Bills, and despite the subdued demand, it could raise the allotted amount by a third.
Today’s highlights
The RatingDog China General Services purchasing managers’ index rose to 52.3 points in January, from 52.0 points in the previous month. In January, activity in China’s service sector expanded at its fastest pace in three months, supported by stronger new orders, and employment also rose to its highest level since July. In sync with the manufacturing survey, these data may point to a slight improvement at the beginning of the year. China's SSEC stock index inched up 0.1% and Hong Kong's Hang Seng advanced 0.4%, while Japan's Nikkei lost 0.7%.
In Europe, the eurozone’s inflation data release and National Bank of Poland’s rate decision are in focus today. In America, ADP employment data and the ISM non-manufacturing PMI are scheduled for release. As the earnings season continues, investors await reports from Google's parent company Alphabet, as well as from Novo Nordisk's rival Eli Lilly.
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