Europe Outperforms Wall Street in January on Strong Earnings and Central Bank Support

Key Points:

* Europe's Stoxx 600 index is poised for a 6.5% surge in January, its best month in two years.
* Robust corporate earnings, easing from the European Central Bank, and speculation of avoiding US tariffs are driving the rally.
* Nasdaq 100 and S&P 500 futures are also rising, driven by solid reports from tech giants Apple and Intel.
* Investors are diversifying away from US tech stocks into more value-oriented European equities.

Dollar Gains on Tariffs:

* The US dollar is strengthening ahead of President Trump's announcement of tariffs on Canada and Mexico on Saturday.
* Investors are gauging the potential impact on the dollar's value, which is on track for its best week since mid-November.
* The cost of hedging against currency volatility in the Canadian dollar is at its highest since October 2022.

Economic Data and Market Movements:

* US core price index numbers are expected to rise slightly in December, providing insight into inflation dynamics.
* Tech sector concerns about competition from China have eased as major US tech companies report resilient earnings.
* Apple's positive forecast boosted investor sentiment after mixed holiday results.
* Gold is poised for its best month since March as haven demand increases amid trade war fears.

Key Market Movements:

Stocks:

* S&P 500 futures: +0.5%
* Nasdaq 100 futures: +0.8%
* Dow Jones Industrial Average futures: +0.3%
* Stoxx Europe 600: +0.5%
* MSCI World Index: Unchanged

Currencies:

* Bloomberg Dollar Spot Index: +0.2%
* Euro: $1.0382 (unchanged)
* British pound: $1.2419 (unchanged)
* Japanese yen: ¥154.79 (↓0.3%)

Cryptocurrencies:

* Bitcoin: $104,821.03 (↓0.2%)
* Ether: $3,346.57 (↑3.1%)

Bonds:

* 10-year Treasury yield: +1 basis point to 4.53%
* German 10-year yield: -4 basis points to 2.48%
* British 10-year yield: -2 basis points to 4.54%

Commodities:

* West Texas Intermediate crude: $72.61 (↓0.2%)
* Spot gold: $2,805.22 (↑0.4%)