Εβδομαδιαία Επισκόπηση: Διεθνής Οικονομία & Αγορές, 10/02/26
The ECB stood pat, as expected, with the US Technology equity sector under pressure
Global equity markets were broadly flat on a weekly basis (MSCI: -0.1% wow), albeit with elevated volatility during the week, located primarily in stocks of high-technology corporations in the US.
Regarding the S&P500, a +2.0% gain on Friday whipped out losses accumulated in previous sessions. The Software & Services industry group underperformed, down by -7.5% wow.
The latter has fallen by -26% since its peak late in past October, as the potency of Artificial Intelligence coding tools in software development evolves sharply. With the respective field being reshaped, concerns among investors have risen regarding the repercussions for software firms.
On Monday February 9th, following the results of the elections for the legislature in Japan, the Nikkei225 rose sharply by +3.9% to record highs and government bond yields were up by +6 bps in the 10-year tenor to 2.29%, hovering close to recent highs since 1999.
The elections resulted in a very strong political mandate for the LDP, which has pledged significant fiscal expansion. Mrs. Takaichi secured a landslide victory, gaining 310 seats out 465 in the House of Representatives (“lower house”). Notably, the more than ⅔ majority in the lower house will allow the LDP to override votes in the upper house (House of Councilors) and to propose amendments to the constitution.
On monetary policy, the European Central Bank stood pat, as expected, with the Deposit Facility Rate at 2.00%. The ECB, as also indicated by the comments of its President Mrs. Lagarde at the Press conference, continues to view the current monetary policy stance as appropriate, with CPI underlying pressures well in line with the 2% medium term inflation target.
Euro area headline CPI decelerated by -0.3 pps to +1.7% yoy in January, albeit in a big part due to negative base effects for Energy prices, with the core at +2.2% yoy.
At the same time, euro area real GDP rose by +0.3% qoq in Q4:2025 (+1.3% yoy) from +0.3% qoq (+1.4% yoy) in Q3:2025, somewhat above consensus analysts’ and ECB staff’s estimates (back in December) of +0.2% qoq (+1.2% yoy).
The Bank of England also stood pat, as expected, with the Bank Rate at 3.75%, albeit with four out of nine Monetary Policy Committee members voting in favor of a -0.25% cut.
Further suggesting that the next reduction in the Bank Rate could be closer than previously assumed, according to the updated economic projections (Monetary Policy Report), the BoE now expects CPI inflation to ease to +2.0% by June 2026, much faster (roughly a year sooner) than anticipated in November’s exercise. That development is in a big part due to recent fiscal measures aiming at reducing energy bills. In all, short-term Gilt yields fell after the BoE’s meeting (-9 bps wow to 3.63% for the 2-year bond).
Regarding US monetary policy, CPI (due on February 13th) and labor market data (due on February 11th) will be closely monitored. Recall that both reports got delayed by a few days due to a renewed partial US federal government shutdown as of February 1st, which was brief though (lasted 4 days).
Global equity markets were broadly flat on a weekly basis (MSCI: -0.1% wow), albeit with elevated volatility during the week, located primarily in stocks of high-technology corporations in the US.
Regarding the S&P500, a +2.0% gain on Friday whipped out losses accumulated in previous sessions. The Software & Services industry group underperformed, down by -7.5% wow.
The latter has fallen by -26% since its peak late in past October, as the potency of Artificial Intelligence coding tools in software development evolves sharply. With the respective field being reshaped, concerns among investors have risen regarding the repercussions for software firms.
On Monday February 9th, following the results of the elections for the legislature in Japan, the Nikkei225 rose sharply by +3.9% to record highs and government bond yields were up by +6 bps in the 10-year tenor to 2.29%, hovering close to recent highs since 1999.
The elections resulted in a very strong political mandate for the LDP, which has pledged significant fiscal expansion. Mrs. Takaichi secured a landslide victory, gaining 310 seats out 465 in the House of Representatives (“lower house”). Notably, the more than ⅔ majority in the lower house will allow the LDP to override votes in the upper house (House of Councilors) and to propose amendments to the constitution.
On monetary policy, the European Central Bank stood pat, as expected, with the Deposit Facility Rate at 2.00%. The ECB, as also indicated by the comments of its President Mrs. Lagarde at the Press conference, continues to view the current monetary policy stance as appropriate, with CPI underlying pressures well in line with the 2% medium term inflation target.
Euro area headline CPI decelerated by -0.3 pps to +1.7% yoy in January, albeit in a big part due to negative base effects for Energy prices, with the core at +2.2% yoy.
At the same time, euro area real GDP rose by +0.3% qoq in Q4:2025 (+1.3% yoy) from +0.3% qoq (+1.4% yoy) in Q3:2025, somewhat above consensus analysts’ and ECB staff’s estimates (back in December) of +0.2% qoq (+1.2% yoy).
The Bank of England also stood pat, as expected, with the Bank Rate at 3.75%, albeit with four out of nine Monetary Policy Committee members voting in favor of a -0.25% cut.
Further suggesting that the next reduction in the Bank Rate could be closer than previously assumed, according to the updated economic projections (Monetary Policy Report), the BoE now expects CPI inflation to ease to +2.0% by June 2026, much faster (roughly a year sooner) than anticipated in November’s exercise. That development is in a big part due to recent fiscal measures aiming at reducing energy bills. In all, short-term Gilt yields fell after the BoE’s meeting (-9 bps wow to 3.63% for the 2-year bond).
Regarding US monetary policy, CPI (due on February 13th) and labor market data (due on February 11th) will be closely monitored. Recall that both reports got delayed by a few days due to a renewed partial US federal government shutdown as of February 1st, which was brief though (lasted 4 days).