OTP Morning Brief: Earning reports drove markets on Monday
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OTP Morning Brief: Thursday trading brings equity market correction and rising oil prices
European equities closed slightly lower, primarily due to weakness in the technology and defence sectors. A more significant correction unfolded on US equities markets as a wave of selling hit technology stocks, while oil and natural gas prices rose markedly amid escalating geopolitical tensions. Amid growing investor caution, both US and German government bond yields declined, while the dollar edged higher against the euro after experiencing significant intraday volatility. Longer-dated yields also declined on the Hungarian bond market, while the forint weakened against both the euro and the dollar. The negative sentiment spilled over from US markets into Asia, with most major Asian equity indices trading in negative territory during the morning session. Today's focus will be on the October US labour market data, which could materially influence market expectations regarding the Federal Reserve's December rate decision. Additionally, retail sales data will be released from both the euro area and Hungary, while Germany will publish its September industrial production figures.
OTP Morning Brief: Investor sentiment improved following the Democrats’ congressional victory and the decline in oil prices
Lower bond yields and oil prices, driven by the Democrats’ expected congressional majority, improved market sentiment. Brent crude has fallen by roughly 20% since the beginning of the week, while the yield on the 10-year US Treasury note declined by 6 basis points to 4.89%. Amid the favourable risk environment, the US dollar weakened, with the EUR/USD exchange rate rising to near 1.123. In Europe, positive corporate news also supported market sentiment, with the STOXX 600 index rising by 1.8%, while shares of Novo Nordisk gained 5.6% after the company raised its full-year guidance. Today, investors will focus on German industrial orders, French industrial production and the euro area producer price index, alongside interest rate decisions by the Bank of England and the Czech central bank. In the US, weekly initial jobless claims, as well as Q3 productivity and labour cost data, will also be in the spotlight.
Western Europe’s benchmark stock indices closedmixed on Monday, when markets were mainly driven by corporate earnings reports.Trading with Dassault Systemes was suspended due to a sharp fall in the shareprice. Eurozone industrial output shrank in December compared to November. Losing2% made the BUX the weakest link among CEE stock markets. MOL Group requestedHungary’s Ministry of Energy to release strategic crude oil reserves. US stockmarkets were closed for a holiday. The USA and Iran begin talks in Geneva today. Germany’s the ZEW economic sentiment indexfor February, and the US New York Fed manufacturing index will be released today.
Western Europe’s benchmark stock indices closed mixed on Monday; Hungary’s BUX fell sharply
The benchmark stock indices of Western Europe ended mixed on Monday, as did the sector indices of the Stoxx600 (+0.1%). The markets were primarily driven by corporate flash reports; 60% of the results published so far exceeded expectations, which is a better than usual ratio. The weakness of the technology, luxury, and media sectors was offset by the good performance of the banking and insurance sectors. On Monday, the financial sector picked up from Friday's losses; Spain’s IBEX (+1%) posted the strongest gain. The DAX (-0.5%) was the weakest of Europe’s key indices on Monday.
Shares in French software company Dassault Systemes slumped 10.4% by the close, causing a brief halt in trading at one point on Monday, as brokerage AlphaValue downgraded the shares to Reduce, from Buy, citing renewed concerns about the French software group’s artificial intelligence monetization and a “worrying loss of momentum.” The materials sector was dragged down by a drop in Rio Tinto (-1.1%) after the company shut down its Simandou iron ore mine in Guinea following a fatal accident. Industrial output in the eurozone shrank 1.4% month-on-month, erasing the November gain, which was revised down. This decline halted a three-month march, but in a positive turn, the production of consumer durables increased and the eurozone’s industry expanded by 1.5% in full year 2025. Hungary’s BUX (-2%) lagged behind its regional peers. All Hungarian blue chips turned red, particularly MOL (-3.4%) as the oil company published its statement after market close, according to which it has contacted Hungary’s Ministry of Energy in order to release strategic crude oil reserves, as no crude oil has been received through the Barátság (Friendship) crude oil pipeline since 27 January 2026. The group hopes that these measures help ensure that the region’s supply is safely maintained. In Budapest, 4IG (-11.0%), Kermannit (-10.9%) and Rába (-8.7%) took the biggest hits yesterday.
On Monday, investors were waiting for the visit of US Secretary of State Marco Rubio to Hungary, seeking his comments on sanctions against Russian energy sources, but no specific deadline was set. The foreign ministers of the USA and Hungary signed a nuclear energy agreement.
The price of natural gas in Europe sank further yesterday, this time by 5.5%. The current price is 30.7 EUR/MWh, the last time when it was below this mark was in mid-January.
US stock exchanges were closed for a holiday
Wall Street stock exchanges were closed yesterday for Presidents’ Day.
Brent crude oil rose by more than 1% on Monday.
Gold price slipped below USD 5,000 on Monday, reversing Friday's rise. Silver also declined, and is now more than 34% below this year's high.
Developed markets’ bond yields barely moved yesterday; Hungary’s yields sank further
With the holiday in the USA, trading in advanced economies’ bond and currency markets was relatively dull yesterday. Japan’s weaker-than-expected GDP and the anticipated decline in Europe’s industrial production data did not bring any significant changes: Japan’s 10-year yield remained at 2.2%, and the German one stayed near 2.75%, but French and Italian yields did not change much, either. A trivial dollar strengthening drove the EUR/USD towards 1.185.
But the sentiment in Hungary’s currency and bond markets was benign, even if CEE currency and bond markets were idle. The EUR/PLN and the EUR/CZK essentially did not budge, and Polish and Czech bond yields edged minimally lower. In contrast, the forint strengthened by almost half a percent against the euro, sending the EUR/HUF to 377.5. The benchmark yields fixed in the early afternoon sank further from one-year lows, by five basis points on the belly of the curve (3Y-5Y) and by 10 basis points on the longer maturities. The ten-year benchmark yield sank to 6.45%, and then by further 2-3 basis points in the afternoon. There was strong interest in yesterday's switch auction of Discount Treasury Bills, and in the end, HUF 40 billion worth of T-bills changed hands, at an average yield of 6.06%.
Today’s highlights
In the Asia-Pacific region, the markets of China, Hong Kong, Singapore, Taiwan and South Korea were also closed on Tuesday due to Lunar New Year holidays. Japan's Nikkei225 showed the biggest movement this morning, falling nearly 1% in the last hour of trading. Crude oil prices rose in Asian trading ahead of indirect talks between the USA and Iran aimed at resolving the nuclear dispute. The talks begin today in Geneva, and are mediated by Oman.
Germany’s ZEW economic sentiment index for February is expected to reflect a significant improvement compared to January, in line with the German economy’s sluggish but steady recovery.
In the United States, the Empire State manufacturing index will be published. In the previous survey, companies were optimistic about the outlook and there has been no negative news for the sector since then (i.e. no new tariffs announced), so the index is likely to remain in positive territory.
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