Newsquawk European Market Wrap - 2nd January 2026

• European stocks traded higher across the board following a similar lead from APAC
• US equities kick off 2026 in the green with outperformance in tech-laden Nasdaq, but stocks waned off highs since the open
• US President Trump warned Iran that the US is "locked and loaded and ready" to rescue peaceful protesters if Iran opens fire on them

EQUITIES

• European equities remained mostly firmer but eased slightly from earlier highs. The FTSE 100 drew particular attention after hitting the 10,000 milestone, following its strongest annual gain in 2025, the best performance since 2009.
• European sectors were broadly positive. Technology continued to rally, supported by gains in the Nasdaq, while Autos and Basic Resources also outperformed, with the latter underpinned by higher metal prices. On the downside, Real Estate, Media, and Food, Beverage & Tobacco lagged.
• US equities are positive/mixed. Downside in the YM, whilst the Russell is flat. The NQ remains the key outperformer due to upside in big tech firms like Apple, Amazon, Google, Nvidia, and Tesla.
• Notable U.S. movers include Tesla, which is slightly higher despite posting weaker-than-expected Q4 deliveries. Ironwood Pharmaceuticals is also gaining after issuing strong FY26 revenue guidance. Baidu is another standout, rising after announcing plans to spin off its AI chip unit.

FX

• USD - Traded near the upper end of a tight 98.145–98.492 range in early Europe after a subdued APAC session, with broader volumes still normalising post-holiday.
• EUR - Saw muted action and held steady despite the final Manufacturing PMI, consolidating after a strong 13.5% gain in 2025.
• GBP - Also traded quietly with little reaction to the final Manufacturing PMI, following its 7.7% advance over 2025.
• JPY - Held flat within a narrow 156.77–157.00 band, with price action subdued after a volatile 2025 marked by political and fiscal uncertainty, BoJ tightening bias, and haven flows.
• Antipodeans - Outperformed, with AUD and NZD bid on broader risk-on sentiment; AUD additionally found support from firmer gold amid heightened geopolitical tensions, including President Trump’s warning to Iran.

FIXED INCOME

• Overall, a contained session for fixed income with catalysts pertinent to the complex lacking. Scheduled newsflow increases next week with US jobs data, ISMs and the potential naming of Trump’s successor to Fed Chair Powell all due.
• USTs and Bunds began on the back foot but spent the first part of the European morning lifting off worst and towards highs in respective 112-05 to 112-14+ and 127.08-50 parameters. USTs briefly turned unchanged while Bunds have been lower by at least 10 ticks today.
• Gilts saw a softer open but, as above, the benchmark climbed off lows and is at the upper end of 90.74-91.33 parameters. 91.37 would take Gilts back to unchanged on the day, thereafter resistance at 91.47.
• No move to the EZ, UK & US Final PMIs.
• Spanish Tesoro offers 2.70% 2030, 3.00% 2033 and 3.45% 2043 nominal and 1.15% 2036 I/L Bonos for auction on Jan 8th; Sizes due Monday.

COMMODITIES

• Crude - Traded lower, with WTI and Brent drifting toward the bottoms of their ranges in early trade and later extending with the former printing a trough at USD 56.78/bbl and USD 60.20/bbl respectively. Price action was dominated by oversupply concerns rather than escalating geopolitical tensions, as traders looked ahead to this weekend’s OPEC+ meeting. Expectations point to the alliance reaffirming its Q1 production pause amid fears of a 2026 supply glut, with Saudi–UAE tensions seen as headline noise rather than a risk to OPEC cohesion.
• Precious Metals –- Spot Gold extended its geopolitical premium after a strong 2025 (up 64%), supported by Trump’s warning to Iran and renewed Saudi–UAE tensions. Silver also held elevated levels after last week’s record.
• Base Metals - Maintained an upward bias, though more modest than precious metals, with 3M LME Copper hovering on either side of USD 12.5k/t as broader risk appetite and APAC strength continued to support the red metal.
• OPEC+ is expected to maintain its output conditions at the 4th of January meeting, Reuters reported citing sources.
• India has reportedly requested weekly data disclosure from its refiners relating to oil purchased from Russia and the US, Reuters reported citing sources.
• North Sea Buzzard oil field recommenced production on 1st January 2026, according to CNOOC.
• Rail line in Australia used by Glencore (GLEN LN) requires a significant repair job.**

EUROPEAN DATA

• UK S&P Global Manufacturing PMI (Dec) 50.6 vs. Exp. 51.2 (Prev. 51.2).
• UK Nationwide house price YY (Dec) 0.6% vs. Exp. 1.2% (Prev. 1.8%); MM (Dec) -0.4% vs. Exp. 0.1% (Prev. 0.3%).
• EU HCOB Manufacturing Final PMI (Dec) 48.8 vs. Exp. 49.2 (Prev. 49.2).
• EU Money-M3 Annual Grwth (Nov) 3.0% vs. Exp. 2.7% (Prev. 2.8%).
• EU Loans to Non-Fin (Nov) 3.1% (Prev. 2.9%).
• EU Loans to Households (Nov) 2.9% (Prev. 2.8%).
• German HCOB Manufacturing PMI (Dec) 47 vs. Exp. 47.7 (Prev. 47.7).
• French HCOB Manufacturing PMI (Dec) 50.7 vs. Exp. 50.6 (Prev. 50.6).
• Italian HCOB Manufacturing PMI (Dec) 47.9 vs. Exp. 50.0 (Prev. 50.6).
• Spanish HCOB Manufacturing PMI (Dec) 49.6 vs. Exp. 51 (Prev. 51.5).
• Swedish PMI Manufacturing Sect (Dec) 55.3 (Prev. 54.6).

NOTABLE HEADLINES

TRADE/TARIFFS

• Japanese PM Takaichi agreed with US President Trump for a US visit in the Spring, according to Kyodo.

GEOPOLITICS

RUSSIA-UKRAINE

• India has reportedly requested weekly data disclosure from its refiners relating to oil purchased from Russia and the US, Reuters reported citing sources.

MIDDLE EAST

• US President Trump posted "If Iran shots and violently kills peaceful protesters, which is their custom, the United States of America will come to their rescue. We are locked and loaded and ready to go. Thank you for your attention to this matter!".
• Saudi Arabia reportedly launched seven airstrikes on Yemen on Friday, according to a STC official.

NORTH AMERICAN DATA

• US S&P Global Manufacturing PMI Final 51.8 vs. Exp. 52.2 (Prev. 51.8)
• Canadian S&P Global Manufacturing PMI 48.6 vs. Exp. 49 (Prev. 48.4)

NOTABLE US EQUITY HEADLINES

• Tesla (TSLA) Q4 Deliveries: Total 418k (exp. 422.85k), Model 3/Y 406.59k (exp. 404.93k), Other Models 11.64k (exp. 17.92k). Production Total: 434.358k, Model 3/Y: 422.65k, Other Models 11.7k
• Rivian (RIVN) Q4 deliveries: 9,745 (exp. 10,050); production at 10,974; FY deliveries 42,247 (exp. 42,500), production 42,284.

NOTABLE APAC HEADLINES

• South Korean President Lee is seeking cooperation with China on AI and tech ahead of the state visit to China on Sunday. South Korea reaffirms one-China stance on Taiwan.

NOTABLE GLOBAL EQUITY HEADLINES

• Memory shortages to persist through 2026 as AI server demand surges, via DigiTimes.