OTP Morning Brief: Framework on future Greenland deal discussed in Davos
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OTP Morning Brief: Rising oil prices and US labor market data pushed developed market bond yields higher
Supported by favorable corporate earnings reports, leading Western European stock indices mostly posted modest gains on Thursday. In contrast, US equity markets closed lower. Eurozone retail sales fell by 0.3% month-on-month in June, while the May figure was revised upward. German industrial orders increased by more than expected. The data released on Thursday continue to support the resilience of the US labor market. Developed market bond yields rose alongside higher oil prices. The forint weakened by 1% against the euro, underperforming its regional peers. Following stronger readings in May, Hungarian retail sales and industrial production declined month-on-month in June. Today, the primary focus will be on July CPI data released by the HCSO and US labor market figures.
OTP Morning Brief: Strong corporate earnings buoyed the Stoxx600 and the Dow to new all-time highs, technology sector came under pressure
Key European equity indices edged higher on Wednesday supported by strong corporate earnings, with the Stoxx 600 and the DAX closing at record highs. In the US, however, the technology sector came under pressure, as shares fell sharply despite better-than-expected quarterly results from SpaceX and AMD, amid concerns surrounding AI-related investment spending. As a result, the S&P 500 and the Nasdaq declined, although the Dow closed at record high. The decline in oil prices came to a halt, while long-term yields in developed bond markets dropped further. Interest rate hike expectations eased in the US and the euro area as well. In the FX market, EUR/USD rose to 1.155, while the EUR/HUF closed below 362. Hungarian long-term bond yields declined. In Germany, factory orders data will be released, while euro area retail sales figures will also be today’s highlights. In Hungary, preliminary June industrial production figures and retail sales data are in the focus. In the US, weekly jobless claims data and Q2 productivity figures could also attract attention. In Europe, earnings reports from Siemens, Rheinmetall and Deutsche Telekom will be in investors’ focus, while in the US, results from Cloudflare and Datadog may be worth watching.
Europe’s major stock markets closed mixed yesterday after Donald Trump's Davos speech; In Britain, December inflation accelerated more than expected. In the USA, the key indices closed higher as Donald Trump backed off from imposing new tariffs on Europe; pending home sales fell in December from the previous month while October construction spending grew stronger than thought. All eyes were on Davos, where Donald Trump gave a speech. Despite harsh words about Europe, he ruled out acquiring Greenland by military force, and later he claimed a Greenland deal, and dropped plans to impose additional tariffs on European countries. Today, the focus will be on the US core PCE index as well as personal income and spending figures.
Europe’s stock markets closed mixed yesterday after Donald Trump's Davos speech; UK December inflation was higher than expected
In Europe, the main stock markets ended mixed on Wednesday as US President Donald Trump's speech at the World Economic Forum in Davos had stoked fears about an EU-US trade war. The Stoxx Europe 600 index ended the day almost flat, paring earlier losses, while its sectors moved in all directions. In his speech, Donald Trump confirmed his intention to acquire Greenland –this time he ruled out the use of military force–, while threatening tariffs against European countries. Following his speech, European lawmakers announced that they would suspend the approval of the EU-US trade agreement concluded in 2025. On behalf the European Parliament, Bernd Lange said the tariff threats were tantamount to an attack on the EU's economic and territorial sovereignty. European Commission President Ursula von der Leyen has previously called the US tariff threats a mistake, while French President Emmanuel Macron has indicated that the EU may consider using the Anti-Coercion Instrument (ACI) in response. In equity markets, mining shares soared, led by Anglo American, Rio Tinto, and Glencore.
In December, the UK’s consumer price index rose to 3.4%, from an eight-month low of 3.2% in November; it slightly exceeded market expectations (3.3%), and marked the first acceleration in inflation since July. The acceleration, which is expected to be temporary, was fuelled by a surge in the prices of alcohol and tobacco products due to the timing of tobacco excise duties, as well as higher airfares. Services inflation rose to 4.5% from 4.4%, but remained below expectations, while core inflation stabilized at 3.2%, its lowest level since December 2024.
The indices of the CEE region closed mixed: Warsaw’s WIG declined, but the BUX and Prague indices rose. Of the former’s blue chips, the share prices of MOL and OTP increased, while those of the other two stocks sank.
America’s key indices closed higher after Trump backed off from imposing new tariffs on Europe; pending home sales fell in December from the previous month but October’s MoM construction spending grew stronger than expected
US stock markets grew meaningfully yesterday as Donald Trump backed off from imposing new tariffs on Europe after European markets’ close, as he claimed that the framework for an agreement on Greenland had been formed. Markets had started to rise already after Donald Trump's speech in Davos, as the US president ruled out the use of military force, but the withdrawal of tariff threats has further boosted risk appetite. Donald Trump said he was working on a future Arctic deal that would avoid the tariffs scheduled for 1 February, citing talks with NATO Secretary General Mark Rutte. The rally was driven by technology stocks, including Nvidia and AMD, but bank stocks also rose.
In the United States, pending home sales slumped 9.3% month-on-month in December, in the biggest fall since April 2020, well below the consensus for a 0.3% decline and markedly stronger than November’s 3.3% increase. The halt in a four-month upward trend reflected declines in all regions. In annual terms, sales slipped by 3.0% from a year earlier. In contrast, US construction spending increased by 0.5% month-on-month in October 2025, picking up from a 0.6% decline in September, significantly exceeding the 0.1% uptick expected by the market: private sector construction increased by 0.6% (+1.3% in residential construction, -0.2% in the non-residential segment), while public construction inched up 0.1%. On an annual basis, however, construction spending decreased by 1%.
On Wednesday, all eyes were on Davos, where US President Donald Trump gave a speech. Despite harsh words about Europe, he ruled out acquiring Greenland by military force, and later claimed he had reached an agreement on Greenland and that there would be no need for punitive tariffs
Trading in the fixed income and currency markets of developed countries saw large swings on Wednesday. In the morning, Japan’s bond market reversed sharply from the previous days’ rapid increase in yields, and the 10Y yield fell from a thirty-year peak of 2.35% to less than 2.3% after the announcement that the government may reduce the issuance of longer-term bonds and the Bank of Japan may slow down the tapering of its bond portfolio. After Donald Trump's Davos speech and ending tariff threats against European countries, the tension in the bond market eased, the ten-year US yield sank by five basis points from 4.3%. Meanwhile, European bond yields rose; the 10Y German yield is drawing near 2.9%, very close to the upper edge of its post-covid trading range. The dollar’s appreciation pushed the EUR/USD back below 1.17.
The CEE region’s currencies mostly appreciated, the koruna (CZK) trivially, while the forint (HUF) and the zloty (PLN) lost around 0.25%. The Hungarian currency strengthened, driving the EUR/HUF to 384. Hungary’s government bond yields did not budge, the 10Y yield remained above 6.7%.
Today’s highlights
Most of Asia’s stocks were heading higher today, following Donald Trump's statements in Davos. South Korea’s GDP unexpectedly contracted by 0.3% quarter-on-quarter in the fourth quarter of 2025, but grew by 1.5% year-on-year, falling short of expectations. Japan’s exports expanded by 5.1% in December, also falling short of market expectations (6.1%).
Today, consumer confidence data will be released in Europe. On the other side of the Atlantic, the Fed's preferred gauge, the core PCE (personal consumer expenditures) index, as well as personal income and spending data will be in focus. The US will also release weekly jobless claims figures.
In Turkey, the central bank will hold a rate-setting meeting.
In Hungary, the ÁKK auctions 3Y, 5Y, and 10Y bonds, offering HUF 20, 25 and 25 billion government debt, respectively.
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