International markets showed modest gains as diplomatic negotiations continue in Geneva between Iran-U.S. and Ukraine-Russia. Investors are closely monitoring inflation data from the UK and France, while many Asian markets remain closed for Lunar New Year celebrations.
Global financial markets experienced cautious optimism Wednesday as diplomatic efforts intensify in Geneva and investors await key inflation reports during a period of reduced trading activity due to Lunar New Year holidays.
Stock markets in Asia posted modest increases following small gains on Wall Street, though concerns persist about high valuations in technology companies and artificial intelligence’s broader economic effects. Trading volumes remained light with numerous regional markets shuttered for holiday observances.
Japan’s Nikkei index surged over 1% on investor optimism that Japanese technology companies will gain from $36 billion worth of U.S. projects unveiled by President Donald Trump’s administration, with funding support from Tokyo.
Diplomatic developments in Geneva captured global attention as multiple peace initiatives moved forward. Iran’s Foreign Minister Abbas Araqchi announced that Iran and the United States had established an agreement on “guiding principles” for addressing their nuclear disagreement. Separately, Ukrainian and Russian delegates wrapped up the opening day of two-day peace discussions facilitated by U.S. mediators.
Central bank policies remained focused on inflation trends worldwide. New Zealand’s currency dropped nearly 0.9% after the Reserve Bank of New Zealand maintained current interest rates, stating that anticipated inflation decreases would permit continued supportive monetary policy.
Chicago Federal Reserve President Austan Goolsbee indicated Tuesday that “several more” rate reductions might occur this year, contingent on inflation developments. Market participants will gain additional perspective on Federal Reserve strategy when January meeting minutes are released Wednesday.
United Kingdom inflation statistics will receive significant attention following Tuesday’s employment report showing joblessness climbing to a five-year peak, strengthening arguments for Bank of England rate reductions and causing pound weakness.
Economists predict the UK consumer price index will demonstrate annual growth declining to 3% in January from December’s 3.4%. French inflation data is also scheduled for release.
European stock index futures indicated small opening gains. Euro Stoxx 50 futures climbed 0.07% to 6,039, German DAX futures increased 0.06% to 25,074, and FTSE futures advanced 0.14% to 10,529.
U.S. S&P 500 e-mini futures gained 0.06% to 6,864.8.
Wednesday’s key market-moving events include:
– Corporate earnings from Glencore, Orange, and Covivio
– UK and France consumer price data
– U.S. December housing starts and durable goods reports; January industrial production figures
– Federal Reserve January meeting minutes
