Amazon's sky high capex guidance adds to markets concerns about tech's AI spend

EU mid-market update: Stellantis breaks down with massive impairment while Amazon's sky high capex guidance adds to markets concerns about tech's AI spend; Bitcoin drawdown hits 50%.

Notes/observations

- Equity markets reflected risk aversion driven by AI-capex fears. A new release from Anthropic triggered further pressure on software valuations. Asian indices broadly fell, led by the Kospi, while Shanghai and Hang Seng weakened and Japan outperformed on banks. Europe opened mixed-to-lower, weighed by tech and the Stellantis shock. US equity futures extended weekly declines before stabilizing.

- Corporate news was dominated by Stellantis, which issued a deep business reset, a €22.2B impairment, suspended its dividend, guided for a large H2 loss and lower-than-expected 2026 metrics, and announced up to €5B in hybrid bonds. Analysts flagged the scale of cash costs and lack of factory closures.

- Macro releases delivered mixed signals. Germany posted strong exports but sharply weaker industrial production, notably in autos and machinery. UK Halifax data showed regional softness despite national gains driven by lower mortgage rates and wage growth. Taiwan’s exports extended their AI-driven surge. Japan’s household spending remained in contraction.

- FX traded around policy and politics. Swiss Franc (CHF) remained strong, prompting debate over potential action by the SNB. Euro firmed after ECB Chief Lagarde signaled no imminent ECB cuts. Sterling (GBP) faced pressure amid UK political concerns and the prospect of earlier BoE easing. US dollar stayed steady after touching a two-week high.

- Rates showed defensive positioning. Eurozone yields declined alongside weaker US data; Bunds and OATs gained. UK gilts rose as safe-haven demand increased. Japanese long-end yields stabilized after January’s fiscal stress receded, though term premia remain elevated. US Treasury yields held near three-week lows as incoming labor-market signals kept March cut odds alive.

- In the current environment, the US 10Y-3M yield curve could be the market's most honest "gravity well," acting as the ultimate arbiter between theoretical growth and mechanical reality. Unlike the more volatile 2-year spreads, the 10Y-3M spread is tethered directly to the Federal Reserve's actual policy rate, making its current violent "un-inversion"-surging to almost 0.60% as of early February - a signal that the era of "suspended animation" has ended. With brutal "Quant Factor Unwind", Tether’s peg showing rare signs of fatigue and Japan’s "Sanaeconomics" threatening a global repatriation of funds, the global market is approaching a mechanical "Beta Faceplant" that even the sturdiest AI-driven optimism may fail to break.

- Anthropic is essentially attempting a "hostile takeover" of the software interface tax, aiming to replace legacy application layers with a portable agent control plane rather than simply building another chatbot. SemiAnalysis reporting that Anthropic quarterly ARR growth has overtaken OpenAI’s on the back of a "Claude Code" tool that already claims 4% of global code commits and threatens to relegate the industry pioneer to the status of a mere commodity utility. By standardizing the Model Context Protocol and scaling to a massive 1M-token context window, the company is pivoting the enterprise value proposition from stagnant seat licenses toward the cost of executed, structured procedures.

- Geopolitical dynamics added background uncertainty. US–Russia commentary around the expiry of the New START treaty kept nuclear-arms governance in focus, while Middle-East diplomacy between Washington and Tehran continued to influence the energy risk premium.

- Other EU corporate updates included AB InBev expecting a weak start but stronger 2H, Societe Generale posting mixed Q4 quality, London Stock Exchange Group still facing AI-disruption concerns, and Amazon falling sharply on elevated AI-capex guidance. Mining headlines featured failed merger talks between Glencore and Rio Tinto, though analysts noted strong strategic optionality for both. Additional reports covered Orsted, Vinci, Bechtle, Renk, Banco de Sabadell, Delivery Hero, and luxury-sector commentary on Versace.

- TTN JP Elections Preview: Investors are fixated on a headline win for the LDP, yet they risk mispricing the "Article 59" threshold: a 310-seat supermajority that would transform a standard mandate into a constitutional steamroller for aggressive tax and security overhauls. This political gamble arrives as the Bank of Japan refuses to play its traditional role as fiscal shock absorber, leaving the bond market to navigate a JPY 10 trillion revenue hole and the procedural risk of a snap-election delay in deficit-bond authorization. With the yen teetering at the ¥160 floor and a rare Trumpian endorsement globalizing the stakes, the February 8th vote has become a high-tension stress test of Japan’s institutional plumbing and its geopolitical alignment.

- Asia closed mixed with ASX200 underperforming -2.0%. EU indices -0.2% to +0.4%. US futures +0.2-0.5%. Gold +1.9%, DXY -0.2%; Commodity: Brent +1.1%, WTI +1.2%; Crypto: BTC -7.2%, ETH -8.6%.

Asia

- South Korea Dec Current Account Balance: $18.7B v $12.2B prior.

- Japan Dec Household Spending Y/Y: -2.6% v -0.3%e v +2.9% prior.

- India Central Bank (RBI) left Repurchase Rate unchanged at 5.25% (as expected); maintains ‘neutral’ policy stance.

- RBA Gov Bullock noted that inflation had fallen substantially since peak in 2022, but would not be back into the target range until mid-2027.

- BOJ Masu stated that did not believe the BOJ was behind the curve. No preconception on what month to raise rate. Need to watch if inflation was being driven by weak yen.

Global conflict/tensions

- President Trump to allow North Korea to receive humanitarian aid.

Europe

- ECB staff said to be unsettled by push to shake up banking supervision.

Americas

- President Trump confirmed prescription drugs would be available on Trumprx.gov. 16 drug companies have signed agreements.

Trade

- Japan-US 1st round investments seen at ~¥6-7T (~$40-47B) (**Note: Japan committed to ~$550B (about ¥80T) in investments/loans into U.S. industries over Trump's term).

Energy

- Iran/US talks taking place in Oman.

- Iran Foreign Min Araqchi stated on social media that Iran entered diplomacy with open eyes and a steady memory of the past year.

Speakers/fixed income/FX/commodities/erratum

Equities

Indices [Stoxx600 +0.10% at 612.28, FTSE -0.01% at 10,307.81, DAX +0.39% at 24,543.63, CAC-40 -0.20% at 8,221.56, IBEX-35 +0.34% at 17,806.53, FTSE MIB -0.29% at 45,685.50, SMI -0.70% at 13,377.00, S&P 500 Futures +0.33%].

Market focal points/key themes: The carnage in European bourses today is centered on Milan and Paris, where Stellantis saw its shares crater by over 20% following a staggering €22.2 billion write-down. This industrial retreat has sent the FTSE MIB and CAC 40 into a tailspin, dragging the broader European automotive sector down 2.4% as investors digest the high price of misjudging the electric transition. While Société Générale provided a rare glimmer of optimism with an upgraded profitability target, the gain was largely eclipsed by the smoke rising from the wreckage of the Continent’s carmaking ambitions. The STOXX 600 remains pinned under the dual weight of Stellantis’s dividend cancellation and the "Amazon effect," which has sparked a fresh sell-off in European tech over fears of an expensive, AI-driven arms race.

Equities

- Energy: Orsted [ORSTED.DK] +4.5% (earnings).

- Financials: Societe Generale [GLE.FR] -3.5% (earnings), Sabadell [SAB.ES] -4.5% (earnings).

- Healthcare: Bayer [BAYN.DE] +2.0% (trial data).

- Industrials: Stellantis [STLA.NL] -22.0% (charges; prelim results; guidance; bond issuance), Vinci [DG.FR] +6.5% (earnings), Aker Solutions [AKSO.NO] +7.5% (earnings), Skanska [SKAB.SE] -2.5% (earnings).

Speakers

- ECB’s Villeroy (France) reiterated Council stance that in a good place on rates. Reiterated that ECB did not have an FX target but important for activity.

- ECB's Stournaras (Greece): Monitoring FX rates; euro rise has not been dramatic.

- ECB's Escriva (Spain) stated that was on track to meet the 2% inflation target and expectations are anchored.

- ECB's Kazaks (Latvia) noted Euro price action was fluctuating within a narrow corridor. EUR's inflation effect yet to be seen. Rapid Euro appreciation might trigger an ECB response.

- ECB Rehn (Finland) stated that it would have new Staff Projections at the next meeting in March which would allow to refine assessment of growth and inflation. Real risk of lower-than-expected inflation. Must monitor inflation dynamics very carefully.

- ECB's Cipollone (Italy): EU delay on difgital Euro would break momentum.

- Poland Central Bank (NBP) Kotecki stated that could start thinking about ending rate cutting cycle around the 3.5-3.75% area (**Note: implies up to 50bps of additional rate cuts).

Currencies/fixed income

- EUR/USD steady and holding below the 1.18 level. A plethora of ECB speak reiterated that the central bank was in a good place on rate. Must monitor inflation dynamics very carefully and react to any geopolitical surprises.

- GBP/USD was at 1.3567 and steady after Thurs selloff in light of the dovish BOE rate hold and concerns over the Labour Party leadership stability,

- USD/JPY at 156.80. Focus on Sunday’s Japanese elections with speculation that the ruling parties could win >300 seats and >60% of the Lower House.

- Precious metals remained volatile as silver tested $65/oz during the Asian session. The metal climbed back above the $72 level by early EU.

- 10-year German Bund yield last at 2.82%, France 10-year Oat at 3.43% and 10-year Gilt yield at 4.55% 10-year Treasury yield: 4.19%; 10-year JGB: 2.21%.

Economic data

- (SE) Sweden Jan Maklarstatistik Housing Prices: 0.6% v 0.2% prior.

- (NL) Netherlands Dec Consumer Spending Y/Y: 0.8% v 0.9% prior.

- (ZA) South Africa Jan Net Reserves: $74.9B v $71.1B prior; Gross Reserves: $80.2B v $75.9B prior.

- (DE) Germany Dec Industrial Production M/M: -1.9% v -0.3%e; Y/Y: -0.6% v +1.9%e.

- (DE) Germany Dec Trade Balance: €17.1B v €14.1Be; Exports M/M: 4.0% v 1.1%e; Imports M/M: 1.4% v 0.2%e.

- (UK) Jan Halifax House Price Index M/M: 0.7% v -0.6% prior; Y/Y:1.0% v 0.3 % prior.

- (SE) Sweden Jan Preliminary CPI M/M: 0.1% v 0.4%e; Y/Y: 0.4% v 0.6%e.

- (SE) Sweden Jan CPIF M/M:0.2 % v 0.3%e; Y/Y: 2.0% v 2.1%e.

- (SE) Sweden Jan CPIF (ex-energy) M/M: -0.5% v -0.3%e; Y/Y: 1.7% v 1.9%e.

- (SE) Sweden Jan Budget Balance (SEK): -32.2B v -127.8B prior.

- (NO) Norway Dec Industrial Production M/M: 0.8% v -1.9% prior; Y/Y: 2.3% v 2.0% prior.

- (NO) Norway Dec Manufacturing Production M/M: -0.1% v 2.0% prior; Y/Y: 1.2% v 4.4% prior.

- (DK) Denmark Dec Industrial Production M/M: -1.0% v -5.8% prior.

- (HU) Hungary Dec Industrial Production M/M:0.9 % v 1.0%e; Y/Y: -1.0% v -1.1%e.

- (TH) Thailand May Foreign Reserves w/e Jan 30th: $289.6B v $289.4B prior.

- (FR) France Dec Trade Balance: -€4.8 v -€4.0B prior; Current Account Balance: -€0.6B v -€0.3B prior.

- (FR) France Q4 Preliminary Wages Q/Q: 0.3% v 0.3%e.

- (CH) Swiss Jan Unemployment Rate: 3.2% v 3.3%e; Unemployment Rate (seasonally adj): 2.9% v 3.0%e.

- (CH) Swiss Jan Foreign Currency Reserves (CHF): 712.0B v 725.4B prior.

- (ES) Spain Dec Industrial Production M/M: -2.5% v -0.5%e; Y/Y: -0.3% v +2.5%e; Industrial Output NSA (unadj) Y/Y: 2.8% v 2.2% prior.

- (AT) Austria Jan Wholesale Price Index M/M: +0.7% v -0.9% prior; Y/Y: 0.4% v 0.1% prior.

- (CZ) Czech Dec Industrial Output Y/Y:6.8 % v 5.2%e; Construction Output Y/Y: 5.3% v 6.2% prior.

- (CZ) Czech Dec National Trade Balance (CZK): 14.8B v 10.1Be.

- (RU) Russia Narrow Money Supply w/e Jan 30th (RUB): 19.40T v 19.51T prior.

- (CN) Weekly Shanghai Copper Inventories (SHFE): 248.9K v 233.0K tons prior.

- (HK) Hong Kong Jan Foreign Reserves: $435.6B v $427.9B prior.

- (IS) Iceland Jan Preliminary Trade Balance (ISK): -0.3B v -40.4B prior.

- (UN) Jan FAO World Food Price Index: 123.9 v 124.3 prior.

Fixed income issuance

- (IN) India sold INR290B vs. INR290B indicated in 2040 and 2065 bonds.

- (ZA) South Africa sold total ZAR1.0B vs. ZAR1.0B indicated in 2033, 2043 and 2046 I/L bonds.

Looking ahead

- (UR) Ukraine Jan Official Reserve Assets: No est v $57.3B prior.

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

- 06:00 (BR) Brazil Jan FGV Inflation IGP-DI M/M: 0.2%e v 0.1% prior; Y/Y: -1.1%e v -1.2% prior.

- 06:00 (CL) Chile Jan CPI M/M: +0.4%e v -0.2% prior; Y/Y: 2.7%e v 3.5% prior.

- 06:00 (UK) DMO to sell £4.5B in 1-month, 3-month and 6-month bills (£0.5B, £2.0B and £2.0B respectively).

- 06:00 (BE) Belgium Debt Agency (BDA) to sell Bonds through Ori auction.

- 07:00 (MX) Mexico Jan Consumer Confidence: 45.0e v 44.7 prior.

- 07:00 (UK) BOE’s Pill (chief economist).

- 08:00 (PL) Poland Jan Official Reserves: No est v $271.1B prior.

- 08:00 (PL) Poland Jan Poland Central Bank (NBP) Minutes (2 decisions ago).

- 08:00 (RU) Russia Jan Official Reserve Assets: No est v $754.9B prior.

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

- 08:00 (IN) India announces upcoming bill issuance (held on Wed).

- 08:30 (CA) Canada Jan Net Change in Employment: +5.0Ke v +10.1K prior (revised from +8.2K); Unemployment Rate: 6.8%e v 6.8% prior; Full Time Employment Change: No est v +51.4K prior (revised from +50.2K);; Part Time Employment Change: No est v -41.3K prior (revised from -42.0K);; Participation Rate: 65.4%e v 65.4% prior; Hourly Wage Rate Y/Y: 3.7%e v 3.7% prior.

- 09:00 (BR) Brazil Jan Vehicle Production: No est v 184.5K prior; Vehicle Sales: No est v 279.4K prior; Vehicle Exports: No est v 18.7K prior.

- 09:30 (TR) Turkey Jan Cash Budget Balance (TRY): No est v -333.1B prior.

- 10:00 (US) Feb Preliminary University of Michigan Confidence: 55.0e v 56.4 prior.

- 10:00 (CA) Canada Jan Ivey Purchasing Managers Index (PMI): No est v 51.9 prior.

- 11:00 (RU) Russia Advance 2025 Annual GDP Y/Y No est v 4.3% prior.

- 11:00 (EU) Potential sovereign ratings after European close (S&P on Austria; Fitch on Iceland).

- 13:00 (US) Weekly Baker Hughes Rig Count data.

- 14:00 (AR) Argentina Dec Industrial Production Y/Y: No est v -8.7% prior; Construction Activity Y/Y: No est v -4.7% prior.

- 15:00 (US) Dec Consumer Credit: $8.0Be v $4.229B prior.

- 18:00 (CO) Colombia Jan CPI M/M: 1.2%e v 0.3% prior; Y/Y: 5.4%e v 5.1% prior.

- 18:00 (CO) Colombia Jan CPI Core M/M: 1.2%e v 0.4% prior; Y/Y: 5.6%e v 5.1% prior.