Stoxx 600 record, ECB rate decision

German inflation was unchanged year-on-year at 2.8% in January, preliminary data from the country’s statistics office Destatis showed Friday in the last reading before Germans head to the polls next month.

The reading was also in line with a forecast from economists polled by Reuters. The print is harmonized across the euro area for comparability. 

On a monthly basis, the harmonized consumer price index fell by 0.2%

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— Sophie Kiderlin

German lender Commerzbank reported a 20% year-on-year rise in annual net profit of 2.68 billion euros ($2.79 billion), setting a new record for the bank.

Revenues were up by 6% on an annual basis, Commerzbank said in a Friday statement, adding that its results were driven by stronger-than-expected growth in net commission income, as well as a strong consumer business.

Commerzbank also announced a share buyback program worth up to 400 million euros, which it said would begin immediately with a view to complete by the lender’s annual general meeting in May.

The company said it would propose raising its dividend to 0.65 euros per share, up from 0.35 euros per share in the previous year.

In a news release on Friday Commerzbank CEO Bettina Orlopp said the results showed Commerzbank “is and remains an attractive investment.”

“By consistently managing costs and focusing on growth initiatives, we were able to significantly increase the net result for the past financial year,” she said. “Thanks to increasing profitability and new growth initiatives, we will further enhance capital return in the coming years. Commerzbank is and remains an attractive investment.”

Shares of Commerzbank were up around 1% at 1:05 p.m. London time. The firm was scheduled to report annual results on Feb. 13.

— Chloe Taylor

Stefan Hartung, the chairman of German auto supplier Bosch, warned Friday that tariffs could result in a world “hindered by high transaction costs.”

“I also hope that tariffs will not come as substantial as they were discussed, because the tie between Mexico and the U.S. is very important, Mexico is a good manufacturing base, also a good market with a population,” Hartung told Silvia Amaro on “Street Signs Europe.”

“So I hope the issues between the countries will be resolved without tariffs,” he said.

“I still believe we will have a world that is still collaborating but in some areas the competition  just will rise tremendously, and competitiveness will be the key issue,” he added.  

The comments come as Bosch reported preliminary sales revenue of 90.5 billion euros ($94 billion) in 2024, marking a 1% decline from 2023.

— Sawdah Bhaimiya

Helen Gordon, the CEO of the U.K.’s largest residential landlord Grainger, said the company’s performance should rebound with high occupancy and good rental growth over the next year, in an interview with CNBC host Sylvia Amaro on “Street Signs Europe.”

Gordon said that during the U.K. general election, there were fears that a socialist government “might not want to stimulate the growth of rental homes,” but “that’s actually not been the case.”

She added: “Grainger has outperformed the real estate sector generally, so for the last two and a half years until our share price dipped we were actually an upper quantile performer in the real estate sector, and I would argue that with high occupancy good rental growth, that performance and share price should return because the performance in the company is very strong.”

Grainger’s London-listed shares fell 15% last year.

— Sawdah Bhaimiya

U.K. house prices grew by a weaker-than-expected 0.1% in January, down from 0.7% in December, according to data published by mortgage lender Nationwide on Friday.

Annual house price growth slowed to 4.1%, compared with 4.7% the previous month.

Nationwide’s chief economist Robert Gardner highlighted that despite “modest improvements” over the last year, affordability still “remains stretched by historic standards,” and that mortgage payments have outpaced wage growth.

“A prospective buyer earning the average UK income and buying a typical first-time buyer property with a 20% deposit would have a monthly mortgage payment equivalent to 36% of their take-home pay – well above the long-run average of 30%,” Gardner said in the release.

Gardner pointed out that house prices and deposits remain high compared with average earnings in the U.K.

“This is a challenge that has been made worse by the record increase in rents in recent years, which, together with the cost-of-living crisis more generally, has hampered the ability of many in the private rented sector to save,” he added.

— Sawdah Bhaimiya

European stock markets opened higher on Friday as investors digested the European Central Bank’s fifth rate cut since June 2024, with the Stoxx 600 index up 0.39% at 9 a.m. in London.

Health-care and technology led sector gains, at 0.73%, and 0.62%, respectively.

The U.K.’s FTSE 100 rose 0.39%, while France’s CAC 40 was up 0.35% and Germany’s DAX was up by 0.08%.

Danish renewables giant Orsted, the world’s largest offshore wind developer, announced on Friday that current CEO Mads Nipper will step down from Feb. 1 and be replaced by Deputy CEO and Chief Commercial Officer Rasmus Errboe.

In a statement, Lene Skole, chair of Orsted’s board of directors, said the renewable energy market had “fundamentally changed” over the past four years.

“The impacts on our business of the increasingly challenging situation in the offshore wind industry, ranging from supply chain bottlenecks, interest rate increases, to a changing regulatory landscape, mean that our focus has shifted,” Skole said.

“Therefore, the board has today agreed with Mads Nipper that it’s the right time for him to step down and the board has appointed Rasmus Errboe to take over as CEO,” she added.

It comes shortly after Orsted announced a roughly $1.7 billion impairment charge on U.S. projects. Shares of the company were last seen trading 0.3% higher.

— Sam Meredith

French inflation came in at 1.8% in January on a preliminary basis, steady on the previous month, statistics agency Insee reported Friday.

Economists polled by Reuters expected a reading of 1.9%. The figure is adjusted for comparison with other euro zone countries.

National German inflation figures are due at 2 p.m. CET.

— Jenni Reid

The number of employed people in Germany held steady month on month in December, statistics agency Destatis said Friday, and was down 0.1% from a year earlier.

The rate of unemployment increased to 3.2% from 2.9% in December 2023.

Destatis also announced retail sales fell by 1.6% on the previous month, significantly more than the 0.2% forecast by economists in a Reuters poll.

Figures published Thursday showed German gross domestic product declined 0.2% in the final quarter of the year amid continuing weakness in its industrial sector, confirming the second consecutive annual contraction for the euro zone’s largest economy.

— Jenni Reid

Swiss pharmaceutical giant Novartis on Friday reported better-than-expected sales in the fourth quarter, but falling short of its own guidance over the full-year stretch.

Fourth-quarter net sales rose 16% on a constant currency basis to $13.2 billion, compared to the $12.795 billion estimated by analysts in an LSEG poll.

Quarterly adjusted core operating income came in at $4.86 billion versus the $4.23 billion expected.

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— Karen Gilchrist

The U.K.’s FTSE 100 index is set to open around 9 points higher on Friday at 8,661 points, according to IG data.

However, other bourses headed for declines, with Germany’s DAX seen down 30 points at 21,703 points, France’s CAC 40 down 11 points at 7939.7 points, and Italy’s MIB lower by 23.5 points at 36,619 points.

— Jenni Reid

Gold futures notched a new all-time high as investors assessed the latest GDP data from the U.S.

Gold futures on the New York Mercantile exchange were trading at $2,852.5 per ounce.

“Today’s leg higher can be explained by the release of the fourth quarter US GDP growth data, which slowed more than expected,” said Trevor Yates, senior investment analyst at Global X ETFs.

Yates expects that the slower-than-expected GDP data could lead the Fed to be “increasingly dovish, letting inflation run hotter for longer and therefore pushing real rates lower.”

Gold prices tend to share an inverse relationship with interest rates.

— Lee Ying Shan

The race to invest in artificial intelligence assets exacerbated Monday’s DeepSeek fallout, according to Bank of America.

“Funds piled into AI stocks last year, likely contributing to the outsized reactions we saw in response to DeepSeek,” wrote strategist Savita Subramanian. “AI/tech companies with the biggest increase in ownership breadth over the last year were hit hardest by the headline.”

Specifically, Subramanian pointed to semiconductor manufacturer Broadcom as an example.

“AVGO, which plummeted 17% on Monday, tops our list of stocks with the biggest increases in ownership breadth last year: 56% of US large cap funds owned the stock at the end of 2024 vs. just 38% at the end of 2023,” she wrote.

— Lisa Kailai Han

The U.S. dollar rose against other currencies Thursday afternoon after President Trump said he would impose a 25% tariff on Mexico and Canada.

The ICE U.S. Dollar Index turned positive on the day after the comments, trading at 108.07. The index, which measures the greenback against a basket of currencies, was trading near 107.76 before the remarks.

The dollar also rose against the Canadian dollar and Mexican peso individually.

— Jesse Pound