Market Wrap 2026-02-12

Core-Brief

12 Feb 2026 — 13 min read

China's Commerce Ministry has announced a tariff of up to 11.7%, reduced from the previous 42.7%, on dairy products originating from the EU, effective February 13th.
European equities are generally positive, with the financial sector leading gains following Nuveen's acquisition of Schroders (+28.5%). US equity futures are also showing positive movement across the board.
Most G10 currencies are stronger against the USD, while the AUD is experiencing a slight pullback.
Gilts are outperforming following weaker GDP figures, although expectations for the Bank of England's policy remain largely unchanged. USTs are stable ahead of Friday's CPI release.
WTI and Brent crude oil prices are trading slightly lower amid a relatively calm geopolitical landscape. The IEA has lowered its 2026 global oil demand growth forecast and slightly reduced its supply growth projections.
Upcoming events include US Weekly/Continuing Claims, Existing Home Sales data for January, an EU Informal Leaders Retreat, speeches from ECBʼs Lane & Nagel, BoCʼs Rogers, US supply updates, and earnings reports from Applied Materials, Arista Networks, Vertex Pharmaceuticals, Howmet Aerospace, Coinbase, and American Electric Power.

EUROPEAN TRADE

EQUITIES

European stock markets are broadly positive (STOXX 600 +0.5%), with the DAX 40 (+1.2%) leading the advance and the CAC 40 (+0.9%) following. The Dutch AEX (-0.5%) is underperforming, impacted by earnings from Adyen and Magnum.
Most sectors are showing gains, with Financials (+1.3%) and Telecommunications (+1.0%) in the lead. Schroders (+28.5%) is a top performer in the financial sector after Nuveen's GBP 9.9bln acquisition agreement. Deutsche Boerse (+2.0%) is also up after increasing its stake in ISS STOXX by 20%, a move expected to boost cash EPS in the first full year.
Notable movers include Siemens (+5.7%), Hermes (+1.3%), and Mercedes-Benz (-2.0%). Siemens' shares rose despite missing revenue expectations, supported by an increased FY EPS guidance. Hermes reported better-than-expected earnings and indicated that price increases in 2026 would be lower than in 2025. Mercedes-Benz guided its Adj. ROS below market consensus.
US equity futures are positive across the board (NQ +0.4%, ES +0.3%, RTY +0.5%), continuing the gains from Wednesday following the NFP report. The NQ is being driven higher by storage-related stocks like SanDisk (+7%) and Micron (+4%).
Hermes (RMS FP) reported FY 2025 revenue of EUR 16bln (expected: 16bln) and operating income of EUR 6.56bln (previous year: 6.15bln). The company noted that 2026 price increases would be around 5-6%, down from approximately 6-7% in 2025.
Unilever (ULVR LN) reported Q4 2025 revenue of EUR 12.6bln (expected: 12.47bln) and underlying sales growth of +4.2% (expected: +3.97%). A new EUR 1.5bln share buyback program was announced.
Siemens (SIE GY) reported Q1 net income of EUR 2.2bln (previous year: 3.90bln), revenue of EUR 19.1bln (expected: 22.4bln), and orders of EUR 21.37bln (expected: 20.85bln). The company raised its FY EPS pre-PPA guidance to EUR 10.70-11.10 (previous guidance: 10.40-11.00).
Mercedes-Benz Group (MBG GY) reported FY25 net income of EUR 5.33bln (expected: 4.9bln), revenue of EUR 132.2bln (expected: 132.8bln), and EBIT of EUR 1.76bln (expected: 1.73bln). The company expects 2026 Adj. ROS to be between 3-5% (expected: 5.79%).
Cisco Systems Inc. (CSCO) reported Q2 2026 Adj. EPS of USD 1.04 (expected: 1.02) and revenue of USD 15.30bln (expected: 15.11bln).
McDonald's Corporation (MCD) reported Q4 2025 Adj. EPS of USD 3.12 (expected: 3.04) and revenue of USD 7.01bln (expected: 6.83bln).

FX

G10 currencies are mostly stronger against the USD. The NZD is leading, followed by the GBP, while the AUD is slightly lagging, seemingly retracing some recent gains.
The DXY is slightly lower today. The index experienced choppy trading in the previous session following a strong NFP report and ongoing market digestion of reports that President Trump is considering withdrawing from the North American trade pact. The index is currently trading near the lower end of a 96.77-97.07 range, and further downward pressure could lead to a test of the previous day's low at 96.49. Market focus today will be on US Jobless Claims and an appearance from the POTUS.
The GBP is slightly firmer this morning, largely due to the slight USD weakness. Earlier, a mixed GDP report caused two-way movement in Cable. The December M/M figure met expectations, while the Y/Y component and Q4 preliminary metrics were weaker than expected. GBP/USD initially fell from 1.3617 to 1.3607 before recovering and strengthening as the morning progressed. ING expects the economy to "bounce back" somewhat in Q1 due to recent seasonality-related factors. Regarding monetary policy, the bank believes that if recent growth and labor market weakness persist alongside falling wage growth, a March rate cut is "highly likely." Cable is currently trading at the upper end of a 1.3604-1.3654 range.
The JPY is currently reacting to USD movements, with USD/JPY trading near the midpoint of a 152.26-153.54 range. Further downward pressure on the pair could lead to a test of the lows seen in late January, when Jiji reported that Japan asked the US to conduct USD/JPY rate checks. Markets are continuing to increase bets on faster BoJ normalization. Mizuho's Koshimizu told Reuters that improved growth prospects, a clearer policy strategy, and inflation remaining above the BoJ's target may allow the Bank to deliver three rate hikes this year, suggesting a hike could come as early as March or April. Markets are currently pricing in a 60% chance of a hike in March, a 92% chance in June, and a hike fully priced in for July.

FIXED INCOME

A contained start for most benchmarks.
Gilts are relatively outperforming after soft GDP data. The benchmark opened higher by 18 ticks before climbing another nine to a 91.30 peak and notching a fresh WTD high, weighing on the UK's 10yr yield to a 4.47% trough. For the BoE, the data favors the doves who wanted to cut last week and somewhat skews the narrative towards a March cut vs current pricing for April. However, pricing didn't really move as we await next week's CPI and employment/wage metrics; furthermore, while the series was weak, the economy was still resilient during a tumultuous Q4, a finding that tempers the otherwise dovish impulse.
JGBs returned from Wednesday's holiday lower, reacting to the US NFP print and bearish UST action. Pressure that proved fleeting as the benchmark lifted to a 132.02 peak with gains of just over 10 ticks at best. However, that upside faded across the APAC session to a 131.52 trough. Drivers for this include a Reuters interview with Mizuho's Kozhimizu, who expects as many as three hikes by the BoJ in 2026, and a move as soon as March or April is entirely possible. As it stands, just 3.5bps of tightening is implied in March, 14bps in April and 23.6bps in June, with a move not fully priced until July, where 30bps is implied.
Bunds are firmer, but contained, in narrow 128.62-76 parameters. Specifics for the bloc light, no move to a handful of ECB remarks, which stuck to the script.
A similar story for USTs, rangebound in APAC hours towards the mid-point of the post-NFP drop. Holding at 112-11+ in thin parameters that are well within Wednesday's 112-00 to 112-20 bound. Today, the US docket is comparatively light, with supply and weekly jobs the highlights. Barring a surprise on those, it may be a bit of a filler day into Friday's CPI.
Italy sold EUR 6.25bln vs exp. EUR 5-6.25bln 2.40% 2029, 3.15% 2033, 3.25% 2032 BTP.
Australia sold AUD 150mln in 2035 indexed bonds, b/c 3.97, avg. yield 2.4127%.

COMMODITIES

WTI and Brent are mildly lower this morning and currently trade within a USD 64.18-65.10/bbl and USD 68.86-69.85/bbl range, respectively. Really not much driving things for the complex this morning; action seemingly a paring back of some of the geopolitically-driven strength in the prior session, where reports suggested that the Pentagon was preparing a second aircraft carrier to deploy to the Middle East. It is worth noting a bout of pressure was seen in early European trade, though this lacked a clear driver. Elsewhere, the IEA OMR cut its 2026 global oil demand and supply growth forecast.
Spot gold has been lacklustre thus far throughout the European morning, with the yellow metal trading around the USD 5,075/oz mark at the time of writing, still within yesterday's USD 5,019.71-5,119.35/oz range, with fresh catalysts on the lighter side. Alongside news flow, the Dollar remains relatively muted following yesterday's NFP-driven volatility, which proved to be short-lived. Both the Dollar and XAU have been moving sideways since awaiting the US CPI tomorrow.
Copper prices were indecisive during the APAC session, reflecting mixed sentiment in China, with the Hang Seng and Shanghai Composite diverging overnight. However, early positive sentiment from Europe keeps prices underpinned, and offsets some of the weakness from the APAC session, providing support to the red metal. 3M LME Copper is currently trading around USD 13.3k/t in a narrow 13,2k-13.339k/t range.
Vitol CEO said Russia and Iran's oil buyers are reaching for Western supply.
IEA cuts 2026 global oil demand growth forecast to 850k BPD (prev. 930k BPD); cuts 2026 global oil supply growth forecast to 2.4mln BPD (prev. 2.5mln BPD). Lowers 2026 forecast for non-OPEC+ supply growth to 1.2mln BPD (prev. 1.3mln BPD). Escalating geopolitical tensions, snowstorms and extreme temperatures in North America, and Kazakh supply disruptions sparked the reversal to a bullish market.
Goldman Sachs sees a boost to mine supply growth slowing considerably in 2027/28 which would the ex-China market into deficit.
Saudi crude oil supply to China is set to rise to at least 53mln barrels in March, according to sources.
US Energy Secretary Wright states Venezuela oil quarantine is essentially over, calling it a historic pivot, but noted political prisoners remain an issue.
US President Trump directs Department of Energy to issue funds to coal plants in states including West Virginia and Ohio.
Venezuela's interim President Rodriguez said hopes relationship with US progresses without obstacles; talked with US Energy Secretary about deals on oil, gas, power, and mining; look forward to move forward as fast as possible.
South African Mining Production YoY (Dec) Y/Y 2.5% (Prev. -2.7%).
South African Gold Production YoY (Dec) Y/Y 1.1% (Prev. -6.0%, Rev. From -6%).

TRADE/TARIFFS

Chinese buyers are reportedly buying around 1mln tonnes per month of Australian barley due to a local feed supply shortage, traders report. Chinese buyers are reportedly booked near 2.5mln tonnes of US sorghum over the past three months to replenish domestic feed grain shortfall, traders report.
Indian Trade Minister said textiles will receive no duties if raw material is from the US.
China's Commerce Ministry announced a tariff of up to 11.7% (prev. 42.7%) on EU dairy products; effective from the 13th of February.
China's Commerce Ministry, on Canada canola anti-dumping tariffs, said investigation period extended to March 9th.
China's Commerce Minister said China and the US are to maintain close communication at all levels through trade and economic consultation mechanisms.
China's chief trade negotiator Li Chenggang met with Mexico's deputy economy minister in Beijing.
China's top trade negotiator met with Westinghouse Electric Company CEO on Tuesday.
Taiwan and the US are reportedly to sign a reciprocal trade agreement on February 13th.
US President Trump posted "Canada has taken advantage of the United States on Trade for many years. They are among the worst in the World to deal with, especially as it relates to our Northern Border".
US President Trump posted "Any Republican, in the House or the Senate, that votes against TARIFFS will seriously suffer the consequences come Election time, and that includes Primaries!".
US House majority backs resolution to eliminate Trump's tariffs on Canada.
US President Trump and Chinese President Xi are poised to extend trade truce by up to a year during April meeting in Beijing, according to SCMP citing people familiar with discussions.

NOTABLE EUROPEAN HEADLINES

EU Court Advisor said they should stop the release of c. EUR 10bln in funds for Hungary.
UK Chancellor Reeves is to limit the deregulatory drive as she seeks closer UK relations with the EU, according to FT.

NOTABLE EUROPEAN DATA RECAP

UK GDP MoM (Dec) M/M 0.1% vs. Exp. 0.1% (Prev. 0.2%, Rev. From 0.3%, Low. -0.1%, High. 0.3%).
UK GDP Growth Rate QoQ Prel (Q4) Q/Q 0.1% vs. Exp. 0.2% (Prev. 0.1%, Low. 0.0%, High. 0.2%).
UK GDP Growth Rate YoY Prel (Q4) Y/Y 1.0% vs. Exp. 1.2% (Prev. 1.2%, Rev. From 1.3%, Low. 1.2%, High. 1.2%).
UK GDP YoY (Dec) Y/Y 0.7% vs. Exp. 1.1% (Prev. 1.2%, Rev. From 1.4%, Low. 1.0%, High. 1.2%).
UK GDP 3-Month Avg (Dec) 0.1% vs. Exp. 0.2% (Prev. -0.1%, Rev. From 0.1%, Low. 0.1%, High. 0.2%).
UK Goods Trade Balance (Dec) -22.72B vs. Exp. -22.7B (Prev. -23.58B, Rev. From -23.71B).
UK Goods Trade Balance Non-EU (Dec) -10.99B (Prev. -11.33B, Rev. From -11.46B).
UK Balance of Trade (Dec) -4.340B (Prev. -6.116B).
UK RICS House Price Balance (Jan) -10% vs. Exp. -11% (Prev. -14%).
Hungarian Core Inflation Rate YoY (Jan) Y/Y 2.7% vs. Exp. 2.8% (Prev. 3.8%).
Hungarian Inflation Rate MoM (Jan) M/M 0.3% (Prev. 0.1%).
Hungarian Inflation Rate YoY (Jan) Y/Y 2.1% vs. Exp. 2.4% (Prev. 3.3%).

CENTRAL BANKS

Fed's Hammack (2026 voter) said unemployment rate looks like it's stabilising, adds we have the labour market broadly in balance but noted inflation is still too high. Consumer spending holding in driven by upper incomes. Important for Fed to get inflation back to 2%. Current Fed Funds Rate is right around neutral. Local contacts say growth is picking up. Good for the Fed to stay on hold right now and doesn't need to fine-tune rate policy.
Fed Governor Miran said Wednesday's NFP report does not mean the Fed can't lower rates. Think if you increase supply then you get a decline in inflation. If you blame supply chain failures for higher inflation, stands to reason pushing supply out lowers inflation. Deregulation opens up an output gap. I'd be very Happy to stay, but not up to me. What happens later this year will depend on choices the President and the Senate make.
ECB's Makhlouf said that the ECB is in a good place, adding that inflation is currently on target.
ECB's Cipollone said preserving monetary sovereignty has been a key objective of our single currency.
ECB's Villeroy said expected France's economic growth in Q1 to be between 0.2-0.3%, and in line with the 1% annual growth expected in 2026.
BoE's Breeden said it is reasonable to expect rate cuts across the next couple of meetings if the economy evolves as expected.
RBA Assistant Governor Hunter said need to assess extent to which recent rise in inflation is temporary, adds labour market has stabilised recently, but remains a bit tight; expects labour markets to remain tight and inflation above target for some time.
RBA Governor Bullock said economy performing reasonably well, labour market a positive development, adds the Bank will monitor data and act if inflation becomes entrenched, warning that further rate hikes may be needed. She further added that the board decided inflation at around 3-point something was unacceptable.
CBRT raises its end-2026 inflation forecast to 15-21% (prev. 13-19%).

NOTABLE US HEADLINES

US Treasury Secretary Bessent agreed with the suggestion that the Senate Banking Committee could investigate Fed Chair Powell, instead of the Department of Justice, Semafor reports citing sources.

GEOPOLITICS

RUSSIA-UKRAINE

Ukraine's Air Force warns of a likely launch of Russian intermediate-range ballistic missile.
An oil refinery has reportedly caught fire in Russia's Komi due to a drone attack, RIA reported.
Russia warns it will retaliate if Europe tries to create military capabilities against it, according to Al Arabiya.
Witnesses reported explosions in Ukraine's capital of Kyiv.

MIDDLE EAST

Turkish top diplomat said US and Iran are showing flexibility on a nuclear deal, according to FT.

OTHERS

South Korean MPs say North Korea is accelerating its program to develop and manufacture drones based on experience from the Russia-Ukraine battlefield, citing the spy agency.
North Korea is said to be developing a submarine that can carry 10 submarine-launched ballistic missile, according to an MP citing South Korea's spy agency. North Korea-Russia collaboration excludes modern tech and nuclear programs. North Korea seeks to improve relations despite dissatisfaction with China.
Sounds of explosions at the US base in the countryside of Al-Hasakah, Syria, due to the explosion of mines, Al Arabiya reported citing sources; details light.
US Energy Secretary Wright said US wants no conflict and no military action for the Americas. US is working seven days a week to issue new licenses.

CRYPTO

Bitcoin rebounds slightly, holding above USD 67k. Ethereum nears USD 2k.
Standard Chartered projects Bitcoin to fall to USD 50k, and Ethereum to fall to USD 1.4k in the "next few months"; cuts its year-end forecast to USD 100k (prev. saw 150k), year-end Ethereum forecast to USD 4k (prev. USD 7.5k).

APAC TRADE

APAC stocks were ultimately mixed with a slightly positive bias amongst the major indices as the region reflected on earnings releases and the better-than-expected US jobs data, while Japan's benchmark hit a fresh record high on return from holiday, before fading the gains.
ASX 200 was led higher by strength in utilities and financials after shares in Origin Energy and ANZ Group rallied post-earnings, but with upside in the broader market capped by hawkish rhetoric from RBA Governor Bullock.
Nikkei 225 swung between gains and losses, in which the index initially climbed to above the 58,000 level for the first time, but then briefly wiped out all of its gains as currency strength persisted.
Hang Seng and Shanghai Comp were mixed with the Hong Kong benchmark dragged lower by underperformance in the likes of Budweiser and NetEase following their earnings releases, with the latter also weighed by tech/AI-related headwinds, which dragged other large tech names lower such as Tencent, Baidu and Meituan, while AI startup Zhipu shares surged around 36% after the release of its new model. Conversely, the mainland treaded water following another firm liquidity operation by the PBoC and after China's State Council held a session on boosting AI use, with Premier Li urging to promote the use of AI in various sectors, while there are also expectations for the US and China to extend the trade truce by up to a year during the expected Trump-Xi meeting in April.

NOTABLE ASIA-PAC HEADLINES

Japan is said to have requested US Fed/NY Fed JPY rate check back in January.
Japan's top currency diplomat Mimura won't comment on FX levels and said closely watching markets with a high sense of urgency, also said they are not lowering our guard and are in contact with US authorities.
Japanese Finance Minister Katayama discussed with PM Takaichi about how to proceed with tax credits for benefits and sales tax cut on food, while she did not discuss forex with the PM, according to Jiji.
Softbank (9984 JT) CFO Goto said nothing has been decided about an additional funding round for OpenAI.

NOTABLE APAC DATA RECAP

Australian Consumer Inflation Expectations (Feb) 5.0% (Prev. 4.6%).
Japanese PPI YoY (Jan) Y/Y 2.3% vs. Exp. 2.3% (Prev. 2.4%, Low. 2.0%, High. 2.5%).
Japanese PPI MoM (Jan) M/M 0.2% vs. Exp. 0.2% (Prev. 0.1%, Low. -0.1%, High. 0.4%).

NOTABLE APAC EQUITY HEADLINES

Nissan Motor (7201 JT) 9-month (JPY): Net income -250.22bln (prev. 5.15bln Y/Y), Revenue 8.58tln (prev. 9.14tln Y/Y). Raises its FY revenue forecast to 11.90tln (prev. 11.70tln) and sees narrower FY operating loss at 60bln.
Softbank (9984 JT) Q3 (JPY): Net Income 248.59bln (exp. 857.01bln), Net Sales 1.98tln (exp. 1.96tln).
Lenovo (992 HK) Q3 (USD) net 546mln (prev. 693mln Y/Y), pre-tax profit rose 48% Y/Y to 803mln, rev. 22.2bln (prev. 18.8bln Y/Y).