OTP Morning Brief: Chipmakers bounced higher on Thursday
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OTP Morning Brief: Crude oil prices plunged sharply as the Middle East conflict eased
The first trading day of the week brought modest gains to the major European stock markets, as sectors benefiting from the easing of the Middle East conflict offset declines in the technology and energy sectors. Stock markets across the CEE region also moved higher, with the BUX gaining 0.7%. Wall Street indices closed mixed with minor moves, as investors turned their attention to the Fed's upcoming interest rate decision later this week and earnings reports from major technology companies. WTI crude futures fell by more than 7%, while Brent crude declined by over 8%. Developed-market bond yields declined as easing concerns over CPI, driven by lower oil prices, boosted demand for fixed-income assets. Domestic long-term bond yields also moved markedly lower. The EURHUF exchange rate is trading around the 360 level. Today marks the start of the Fed's two-day rate-setting meeting, while the earnings season continues with reports from several major companies.
OTP Morning Brief: Airstrikes eased in the Middle East
European indices advanced on Friday, allowing them to end the week in positive territory once again. The July PMI data painted a positive picture of the eurozone outlook, although Trump imposed new tariffs, including measures affecting Europe. The BUX declined on Friday, but still ended the week in positive territory. According to the HCSO, employment declined while unemployment increased. Airstrikes between Iran and neighboring countries eased over the weekend. This pushed oil prices back below $100 per barrel. The S&P declined on Friday and posted a loss for the week as a whole. The composite PMI also increased in the US. Developed market government bond yields retreated from their local highs. Hungarian bond yields increased, while the forint strengthened slightly. Q2 GDP data will be released this week for Hungary, the eurozone, and the US. In addition, investors will be watching eurozone and US CPI data, as well as the Fed's interest rate decision.
Most of Europe’s major stock markets rose on Thursday; ASML's share price grew sharply. Germany’s GDP inched up in 2025, picking up from the previous year’s decline. EZ November industrial production growth beat forecasts. The UK’s November GDP surpassed expectations. The USA’s major indices closed higher, fuelled by growth in chipmakers and banks. Oil prices slipped. The Empire State manufacturing index surpassed expectations; the decline in jobless claims indicates tight US labour market. Advanced economies’ bond yields rose, the dollar appreciated against the euro. Hungary’s bond yields continued the rise that began after worse-than-expected CPI data. US industrial statistics for December are in focus today.
Most of Europe’s major stock markets rose yesterday; ASML’s share price rose sharply; Germany’s GDP picked up in 2025 from the previous year’s decline; EZ November industrial production grew stronger than thought; the UK’s November GDP exceeded expectations
In Europe, most stock markets closed higher yesterday, driven by a rally in AI chipmakers after Taiwan Semiconductor (TSMC) reported a stronger-than-expected record profit, and said it would boost investment to USD 52-56 billion in 2026. This indicates strong confidence in the sustainability of AI capacity building. The Stoxx 600 closed 0.5% higher, while ASML's share price soared 5.6%. TSMC's fourth-quarter profit skyrocketed 35%, beating analysts' expectations. On the geopolitical front, tensions have been heightened by a dispute among the USA, Denmark, and Greenland; some states started joint military exercises on the island.
Germany’s GDP grew by 0.2% in 2025 after a 0.5% decline in the previous year, marking the end of a two-year recession. The expansion was primarily supported by household consumption and government spending, while exports fell further due to US tariffs, the strong euro, and competition from China. Investment remained weak, especially in the machinery and construction sectors, where rising costs have increased the number of bankruptcies. Industrial production fell for a third straight year, with significant losses in the automotive and machinery sectors, while services showed a mixed picture. In the eurozone, industrial production increased by 0.7% month-on-month in November, beating market expectations of 0.5%, and expanded 2.5% year-on-year (vs expected: 2.0%), marking the biggest growth since May. The monthly increase was largely supported by a 2.8% jump in capital goods, while energy and durable goods production fell. In the United Kingdom, GDP grew 0.3% month-on-month in November, surpassing market expectations of 0.1%.
The CEE region’s stock indices rose, but Hungary’s BUX lagged behind its peers. Of the latter’s blue chips, Mol and Richter advanced, unlike the other two.
The USA’s key indices closed higher, fuelled by chipmakers’ and banks’ growth; oil prices slipped; the Empire State manufacturing index beat expectations; falling jobless claims indicate tight labour market
US stock markets closed higher on Thursday, driven by chipmakers, as TSMC's (+5%) record quarter fuelled optimism in US trading 5%. The banking sector also outperformed: Goldman Sachs surged 4.6% as its fourth-quarter profit beat expectations, and Morgan Stanley jumped nearly 6%, driven by better-than-expected performance in its asset management business; both stocks hit new 52-week highs. The equity market also benefited from a sharp correction in oil prices, as Brent and WTI both slid more than 4%. Yesterday's rebound followed two consecutive weaker trading days, when geopolitical and monetary policy risks weighed on sentiment.
The New York Fed manufacturing index jumped to 7.7 in January from -3.7 in December, significantly exceeding market expectations of 1 point. The data indicated a moderate expansion of activity in New York State, supported by an increase in new orders (6.6 vs. -1) and shipments (16.3 vs. -5), while employment (-9 vs. -7.5) and average weekly hours worked (-5.4 vs. 2.5) declined. Input prices remained high, while the rate of increase in selling prices slowed to a near one-year low. Meanwhile, US initial jobless claims fell by 9,000 to 198,000 in the week ended 10 January (versus market expectations of 215,000), to the second lowest level in the past two years. The continuing jobless claims figure fell by 19,000 to 1.884 million, slightly missing market expectations and indicating a continued tight labour market.
Yields rose in Europe and America, the USD strengthened against the EUR; Hungary’s bond extended the rise that began after worse-than-expected inflation data
The US manufacturing confidence indices released yesterday were strong, and the number of people applying for unemployment benefits fell to a remarkably low level. In addition, Italy’s unexpectedly strong industrial production and Germany’s 0.2% GDP growth in 2025 also indicate that Europe's largest economy is slowly climbing out of recession. As a result, most bond yields in the USA and Germany rose; the 10Y US yield once again exceeded 4.15% and the latter traded above 2.8%. The dollar’s appreciation sent the EUR/USD below 1.16.
The forint strengthened a tad, trading near 385 against the euro. The ÁKK auctioned 12M discount Treasury Bills, 10Y and 15Y bonds, offering HUF 30, 30 and 10 billion, respectively. It sold the planned quantity of the T-Bill, with adequate demand. Bonds were also sought, allowing the ÁKK to sell securities worth a total nominal value of HUF 90 billion. The increase in bond yields, which began with the publication of the inflation data, continued yesterday: benchmark yields upped 1-5 basis points, and the ten-year one is back above 6.7%.
Today’s highlights
Asian stocks moved mixed this morning, they were also bolstered by chipmakers’ stocks. The sentiment may have been brightened owing to reports that Taiwan and the USA had reached a trade deal, under which the former's semiconductor companies will invest USD 250 billion in the USA in exchange for lower tariffs.
US manufacturing statistics for December are in focus today.
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