European equity markets remained steady on Friday, positioning the pan-European STOXX 600 for its eighth consecutive month of growth, the longest winning streak for the benchmark since the 2012–2013 period.
Despite persistent anxieties surrounding potential AI-driven business disruptions and the impact of new global tariffs enacted by US President Donald Trump, investor sentiment was bolstered by a string of resilient corporate earnings.
Early trading saw the STOXX 600 rise 0.1% to 634.16 points, hovering near record territory, with mining stocks spearheading the gains with a 1.7% jump.
The market’s upward momentum was largely supported by encouraging updates from major players like HSBC, Nestle, and Capgemini, which helped offset broader macroeconomic concerns. However, the session was not without its laggards:
- Delivery Hero: Shares tumbled 5.2% after the company’s annual gross merchandise value missed market estimates, highlighting the intense competition and economic hurdles within the food delivery sector.
- Banking Sector: Financial stocks dipped over 0.4% as investors reacted to the insolvency of MFS, a UK mortgage-finance firm, and assessed the potential contagion or exposure risks across the industry.
Overall, while sector-specific challenges like the MFS insolvency and tech-disruption fears remain on the radar, the prevailing trend in February has been one of cautious optimism fueled by strong corporate fundamentals.
On the FX front, the US dollar is on track to secure its first monthly gain since October, bolstered by a flight to safety amid simmering geopolitical tensions.
This resurgence comes as the Chinese yuan lost its upward momentum following government intervention to halt a prolonged currency rally. While the greenback found strength, the Australian dollar emerged as a standout performer, heading for its fourth consecutive monthly gain. The Aussie rose 0.12% to $0.7115, fueled by a robust economy and expectations that the central bank will pivot toward interest rate hikes, making it the top-performing G10 currency this year with a 6% year-to-date increase.
In contrast, other major currencies faced a more complicated landscape:
The Japanese Yen: Despite Governor Kazuo Ueda signaling a potential near-term rate hike, the yen remained weak due to domestic political instability. The dollar has capitalized on this, gaining nearly 0.9% against the yen in February to trade at 156.17.
The Euro and Sterling: Both currencies are staring at monthly losses. The euro held steady near $1.18 but is down 0.4% for the month, while the British pound remained flat at $1.348, snapping a three-month winning streak with a 1.4% decline in February.
Overall, the final Friday of the month highlights a divergence in central bank outlooks, where domestic economic strength in Australia and geopolitical jitters globally are redefining currency hierarchies.
Currency Power Balance