Morning Bid: Jobs in rearview, earnings next

A look at the day ahead in European and global markets from Ankur Banerjee

A slate of European earnings takes centre stage for investors on Thursday after a surprisingly strong U.S. jobs report firmed expectations the Federal Reserve will likely hold rates steady at least till the second half of the year.

The outlook for policy will depend on upcoming labour market and consumer prices. For now, investors are cutting wagers of a near-term move by the Fed, with the spotlight shifting to Friday’s inflation report.

The U.S. jobs data offered a mixed picture. The higher-than-forecast headline figure hinted the labour market might be doing all right, but a deeper look showed job concentration and prior downward revisions revealing underlying weakness.

Market pricing now suggests little to no chance of a rate cut in March, but possibly a move in June.

The shift in Fed expectations helped the dollar firm up just a touch against most currencies except the yen, which has now risen 3% this week in the wake of Prime Minister Sanae Takaichi’s resounding election victory over the weekend.

The yen has been bolstered by reassuring noises from Takaichi regarding fiscal policies. Investors hope that her decisive win means the Takaichi government will be fiscally responsible and not need to bow down to opposition demands.

The pan-European STOXX 600 index closed at a record peak on Wednesday, and futures point to a higher open ahead of earnings from carmaker Mercedes, the world’s top brewer Anheuser-Busch InBev and luxury firm Hermes.

The outlook for European corporate health has improved, based on LSEG data, but companies in the region are still expected to report a drop in fourth-quarter earnings in what could be their worst performance in the ‍past seven quarters.

Key developments that could influence markets on Thursday:

Economic events: UK GDP data for Q4 and 2025

Earnings: Mercedes Benz, Hermes, Anheuser-Busch Inbev and L’Oreal

(Editing by Jacqueline Wong)