European indices hit new highs. Oil prices jump 4%

On Wednesday, trading on the US stock market concluded with moderate gains. By the end of the day, the Dow Jones index (US30) rose by 0.23%. The S&P 500 (US500) climbed by 0.56%. The tech-heavy Nasdaq (US100) closed higher by 0.80%. The minutes from the January FOMC meeting revealed a divergence of positions within the US Federal Reserve regarding the future rate trajectory. Some participants allow for a resumption of federal funds rate cuts if inflation slows further, while others insist on maintaining current policy parameters for an extended period, and some do not rule out tightening in the event of persistently elevated price pressure. At the same time, the majority noted a decrease in risks to the labor market but highlighted lingering threats from inflation. The overall tone of the document emphasizes a cautious approach and the dependence of future decisions on incoming macro data.

European markets ended Tuesday with gains. Germany’s DAX (DE40) rose by 1.12%, France’s CAC 40 (FR40) closed up 0.81%, Spain’s IBEX 35 (ES35) gained 1.35%, and the UK’s FTSE 100 (UK100) closed up 1.23%. The French CAC 40 Index hit a new all-time high at 8,429 points amid slowing inflation and steady demand for defense and financial stocks. Annual price growth in France fell to 0.3% in January, a low since late 2020, which bolstered expectations that the ECB will maintain a dovish course. The British FTSE 100 also reached a record high, exceeding 10,691 points, as UK inflation slowed to 3%, its lowest level since March 2025. Lower prices for fuel, airfare, food, and education fueled expectations of Bank of England policy easing, supporting demand for equities.

WTI prices jumped by more than 4%, exceeding $65 per barrel and hitting monthly highs amid supply tightening and strengthening demand in Asia. According to the International Energy Agency, winter disruptions and export restrictions reduced global production by approximately 1.2 million barrels per day in January, while active purchasing from China and India further tightened available volumes on international markets. Geopolitical tensions in the Middle East and risks to shipping through the Strait of Hormuz added to the risk premium.

Palladium (XPD) prices exceeded $1,700, reaching a weekly high amid a general strengthening of platinum group metals despite a strong dollar. Prices were further supported by signals from China, where new measures to stabilize the automotive sector are intended to offset a sharp drop in sales in January. Expectations of an automotive market recovery are boosting demand prognoses for palladium, which is widely used in catalytic converters.
Asian markets traded mostly higher yesterday. Japan’s Nikkei 225 (JP225) rose by 1.02%, China’s FTSE China A50 (CHA50) will not trade for the entire week due to Lunar New Year celebrations, Hong Kong’s Hang Seng (HK50) also did not trade yesterday, and Australia’s ASX 200 (AU200) showed a positive result of 0.54%.

The Australian dollar (AUD) strengthened to 0.706, holding near three-year highs on the back of resilient employment data. Unemployment remained at 4.1% in January, a seven-month low, while the number of employed persons increased by 17.8k, confirming labor market tightness and strengthening the case for further Reserve Bank of Australia (RBA) policy tightening. Markets increased the probability of a rate hike to 4.10% in May to approximately 77%, although most analysts still expect a pause in March. Since the beginning of the year, the currency has gained more than 5.5%, becoming one of the strongest in the G10 group.

The New Zealand dollar (NZD) recovered to 0.597 after a sharp drop the previous day caused by a dovish signal from the Reserve Bank of New Zealand (RBNZ). At the first meeting chaired by Anna Breman, the regulator kept the rate at 2.25% and signaled that supportive policy would remain as inflation is expected to return to the midpoint of the target range within the year. While the possibility of a rate hike later this year remains, it will depend on actual economic dynamics and is not yet fully priced in. Following the decision, the market adjusted expectations, shifting the likely timing of tightening closer to the end of 2026.