Copper rises on Trump considering tariff relaxation

EU mid-market update: Europe rebounds as market eyes up Nvidia earnings; US House passes budget blueprint and sends it to the Senate; Copper rises on Trump considering tariff relaxation.

Notes/observations

- European markets showing strength with DAX leading +1.2%, shaking off Tuesday’s lethargy. Sentiment lifted on solid corporate earnings and a US-Ukraine minerals deal, easing geopolitical static. Mining stocks led the charge as copper prices ticked up after Trump’s tariff tease, while food & beverage stocks joined the rally. Standouts include Anheuser-Busch InBev soared 7% on robust profits, Munich Re popped 4.5% with a dividend hike, and E.ON added 3% after upping its investment outlook. Deutsche Telekom lagged, down 4%.

- The U.S. House narrowly passed the Republican budget blueprint for Trump's agenda with a 217-215 vote after most GOP holdouts relented, leaving only one Republican opposed (Rep. Thomas Massie, R-Ky., voted no). The plan includes major Medicaid cost reductions and likely omits some of Trump's desired tax cuts. However, the Republican-controlled Senate favors larger tax cuts and is expected to revise the House budget rather than adopt it as is. Once the Senate makes changes, lawmakers from both chambers must negotiate numerous details on taxes, health care, energy, and food stamps before finalizing a bill for Trump’s approval.

- Spain’s Producer Inflation (PPI) hit a 2-year high of 2.6% in Jan, driven by an 8.6% energy cost surge. France’s consumer confidence nudged up to 93, a 4-month peak, though still shy of neutral. Germany’s GfK Consumer Climate tanked to -24.7 for March, a 10-month low, signaling persistent gloom amid political flux and bankruptcies—new gov’t talks can’t come soon enough. Thailand’s surprise 25bps rate cut to 2% caught markets off guard, with Q4 GDP at 3.2% below forecasts, hinting at a softer 2025.

- Commodities mixed: Brent crude slid ~2% to $72.7/bbl on Russia-Ukraine peace hopes and tariff jitters, while WTI held flat at $69.0. Copper firmed up on Trump’s import probe news. US crude stocks reportedly dipped last week - EIA data later could shift the needle.

- US budget resolution fuels dollar strength, but tariff deadlines (Mar 4th) loom large.

- Ahead, all eyes on Nvidia’s earnings post-US close today after Nasdaq’s 1% stumble Tuesday sent the Fear & Greed index to ‘Extreme Fear’.

- TTN’s NVDA Earnings Preview: While strong demand for Hopper and Blackwell GPUs is expected to drive growth again, analysts warn of potential headwinds in forward guidance due to export controls, supply chain challenges, and competition from AI startups like DeepSeek. Bank of America and Morgan Stanley expect solid results but note potential for conservative Q1 FY26 guidance due to export controls, with investors closely watching data center sales growth Q/Q and gross margin recovery. The upcoming earnings call tonight and GTC conference on March 17 are expected to highlight NVDA’s push into AI inferencing dominance and next-gen chip developments, with a potential acceleration of Rubin chip mass production to this fall.

- Asia closed mixed with Hang Seng outperforming +3.3%. EU indices +0.5-1.3%. US futures +0.2-0.7%. Gold +0.0%, DXY +0.2%; Commodity: Brent -0.1%, WTI +0.1%; Crypto: BTC +1.0%, ETH +4.0%.

Asia

- Australia Jan CPI Y/Y: 2.5% v 2.6%e; CPI Trimmed Mean Y/Y: 2.8% v 2.7% prior.

- Australia Q4 Construction Work Done: 0.5% v 1.0%e.

Global conflict/tensions

- Ukraine said to have agreed to mineral deal terms with the US. Ukraine Pres Zelenskiy said to intend to visit US on Friday (Feb 28th) to formalize the minerals deal.

Americas

- US House narrowly passed Republican budget 'blueprint' for Trump agenda that contained $4.5 trillion in tax breaks and $2 trillion in spending cuts (vote: 217-215); Measure to be sent to the Senate.

- Pres Trump signed executive order to consider tariffs on copper (**Note: Chile also declared state of emergency due to power outage but did rule out cyber attack.

- Trump trade adviser Navarro noted that if the Admin did not get progress it needed from Mexico/Canada Trump would follow through with tariffs. Added that negotiations were ongoing.

Energy

- Weekly API Crude Oil Inventories: -0.6M v +3.3M prior.

Speakers/fixed income/FX/commodities/erratum

Equities

Indices [Stoxx600 +0.74% at 558.30, FTSE +0.61% at 8,721.25, DAX +1.17% at 22,658.97, CAC-40 +1.03% at 8,133.86, IBEX-35 +0.69% at 13,215.00, FTSE MIB +0.94% at 39,077.00, SMI +0.37% at 13,061.10, S&P 500 Futures +0.48%].

Market focal points/key themes: European indices open higher across the board and advanced through the early part of the session; improved risk appetite seen related to progress on Ukraine deal; among better performing sectors are materials and financials; lagging sectors include communication services and telecom; miners supported after potential tariffs and export restrictions on copper in latest Trump Administration trade move; reportedly Italy reluctant to explore deal with Worldline as it looks to revive Nexi or take the latter private; earnings expected in the upcoming US session include Nvidia, Salesforce, Ebay and Agilent.

Equities

- Consumer discretionary: Danone [BN.FR] +1.5% (earnings) - Consumer staples: AB Inbev [ABI.BE] +7.5% (Q4 results, beats estimates, initial FY25 guidance) - Materials: Covestro [1COV.DE] +0.5% (earnings) - Financials: Munich Re [MUV2.DE] +5% (earnings).

- Telecom: Deutsche Telekom [DTE.DE] -4.0% (Q4 results, EBITDA misses estimate, EPS guidance for 2025 is light) - Industrials: Aston Martin Lagonda [AML.UK] -10.5% (earnings), Stellantis [STLA.NL] -4.5% (earnings; guidance).

- Technology: ASML Holding [ASML.NL] +1.5% (Meta said to be considering $200B AI data center campus project), Auto1 [AG1.DE] +10.0% (Q4 results, beats estimates), Worldline [WLN.FR] -14.5% (Q4 results, guides initial FY25; Italy is reluctant to explore a potential tie-up with Worldline among options it is weighing to revive Nexi).

- Utilities: E.ON [EOAN.DE] +4.0% (FY24 results).

Currencies/fixed income

- FX markets were at a standstill during a quiet EU session with limited data releases. Markets continued to focus on US tariff threats. The passage of the US house budget framework bill helped to push bond yields lower but little impact on USD price action.

- EUR/USD continued to test the key resistance of the 1.05 level but yet to find any momentum for a sustained break above.

- USD/JPY drifted lower and stayed below the 150 level as yen currency strength lingered.

- US 10-year bond yield at 4.31%; 10-yera Bund at 2.44% and 10-year Gilts at 4.49%.

Economic data

- (FI) Finland Jan PPI M/M: 1.5% v 0.1% prior; Y/Y: +0.4% v -0.8% prior.

- (DE) Germany Mar GfK Consumer Confidence: -24.7 v -21.6e.

- (SE) Sweden Jan PPI M/M: 1.7% v 0.1% prior; Y/Y: 3.5% v 2.0% prior.

- (NO) Norway Jan Credit Indicator Growth Y/Y: 3.6% v 3.4% prior.

- (TH) Thailand Central Bank (BOT) cut Benchmark Interest Rate by 25bps to 2.00% (not expected).

- (HU) Hungary Dec Final Trade Balance: €0.5B v €0.4B prelim.

- (FR) France Feb Consumer Confidence: 93 v 92e - (ES) Spain Jan PPI M/M: 0.4% v 0.9% prior; Y/Y: 2.6% v 2.3% prior.

- (ZA) South Africa Jan CPI M/M: 0.3% v 0.3%e; Y/Y: 3.2% v 3.2%e.

- (ZA) South Africa Jan CPI Core M/M: 0.2% v 0.2%e; Y/Y: 3.5% v 3.5%e.

- (TW) Taiwan Jan Unemployment Rate: 3.4% v 3.4%e.

- (TW) Taiwan Q4 Preliminary GDP (2nd reading) Y/Y: 2.9% v 1.8% advance; Overall 2024 GDP Y/Y: 4.6% v 4.3% advance.

- (AT) Austria Feb Manufacturing PMI: 46.7 v 45.7 prior (31st month of contraction.

- (CH) Swiss Feb UBS Expectations Survey: 3.4 v 17.7 prior.

Fixed income issuance

- (NO) Norway sold total NOK4.0B vs. NOK4.0B indicated in 2031 and 2034 Bonds.

- (IT) Italy Debt Agency (Tesoro) sold total €4.0B vs. €4.0B indicated in 6-month bills (2 tranches).

Looking ahead

- (EU) G20 Finance Ministers and central banks meeting (ECB’s Lagarde and Cipollone attend).

- (CO) Colombia Jan Industrial Confidence: No est v -0.2 prior; Retail Confidence: No est v 20.6 prior.

- (US) Jan Final Building Permits.

- 05:25 (EU) Daily ECB Liquidity Stats.

- 05:30 (DE) Germany to sell combined €2.0B in 3026 and 2038 Bunds.

- 06:00 (CZ) Czech Republic to sell combined CZK15.0B in 2028, 2032 and 2035 Bonds.

- 06:00 (RU) Russia to sell OFZ Bonds (2 tranches).

- 07:00 (US) MBA Mortgage Applications w/e Feb 21st: No est v -.6.6% prior.

- 07:00 (UK) Weekly PM Question time in House.

- 08:00 (UK) Daily Baltic Dry Bulk Index.

- 08:30 (BR) Brazil Dec Total Formal Job Creation: +71.0Ke v -535.6K prior.

- 08:30 (US) Fed’s Barkin.

- 09:00 (US) President Trump with media.

- 10:00 (US) Jan New Home Sales: 680Ke v 698K prior.

- 10:30 (US) Weekly DOE Oil Inventories.

- 11:00 (RU) Russia Jan Industrial Production Y/Y: 5.4%e v 8.2% prior.

- 11:30 (UK) BOE’s Ghingra at NEISR.

- 11:30 (US) Treasury to sell 2-Year FRN Reopening.

- 11:30 (US) Treasury to sell -Week Bills.

- 12:00 (US) Fed’s Bostic.

- 13:00 (US) Treasury to sell 7-year Notes.

- 16:00 (AU) RBA’s Plumb.

- 17:00 (AU) RBA's Jones.

- 19:00 (NZ) New Zealand Feb ANZ Business Confidence: No est v 54.4 prior; Activity Outlook: No est v 45.8 prior.

- 19:00 (US) Fed’s Barkin.

- 19:01 (IE) Ireland Feb Consumer Confidence Index: No est v 74.9 prior.

- 19:30 (AU) Australia Q4 Private Capital Expenditure: 0.5%e v 1.1% prior.

- 22:00 (KR) South Korea Q4 Short-Term External Debt: No est v $158.7B prior.

- 22:35 (JP) Japan to sell 2-year JGB Bonds.