Nvidia beats again, market shrugs

EU mid-market update: Nvidia beats again, market shrugs; Iran-U.S. to begin 3rd round of nuclear talks in Geneva.

Notes/observations

- European indices show a mixed tone at the open, with modest consolidation after recent record highs. Earnings are driving differentiation: strength in industrials and energy contrasts with pressure in miners and select healthcare names. Nvidia’s beat-and-raise failed to ignite risk appetite, with the muted reaction reinforcing a market already stretched after a strong February.

- Nvidia’s quarter was plainly strong, but the fine print was more revealing: Data Center Compute missed by a whisker, hinting that rivals such as AMD and Google’s TPUs may be nibbling share a little faster than expected, even as networking more than filled the gap. Management’s message was otherwise one of industrial confidence—memory supply is ample across vendors, Blackwell demand remains fierce, and Vera Rubin is still on schedule for a second-half debut, with initial shipments in fiscal Q3 and a broader ramp through Q4 and fiscal 2027. Just as telling, Nvidia’s supply commitments surged to $95.2B (+$44.9B q/q), underscoring how aggressively it is securing capacity, while its newly granted licence to ship a small volume of H200 chips to China is, for now, more strategic option than commercial reality: no revenue yet, and no certainty that imports will be approved.

- Geopolitical risk remains elevated with US–Iran talks in Geneva; Trump scheduled to have intel briefing at 11AM ET, could be briefed on any meaningful results from 3rd round of talks.

- For bonds, UK gilt markets are steady but tactically bid. Analysts argue the slower pace of gilt supply this quarter should extend into FY26/27, with issuance expected to fall sharply to £236B from £304B. Backdrop of a potentially more fiscally uncertain UK political trajectory after today’s by-election complicates the near-term tone, but supply dynamics leave gilts well-supported relative to peers. Eurozone sovereign curves remain locked in narrow ranges, with Italy’s month-end auction the key event.

- On its earnings call, Salesforce brushed aside fresh “SaaSpocalypse” fears as familiar market melodrama, arguing that the industry has survived this script before and that AI agents have, if anything, made software more useful. CEO claim was that “agents as a service” strengthen the case for SaaS rather than weaken it, turning the latest bout of pessimism into more of a marketing opening—and, in his telling, a buying opportunity. The message beneath it was serious enough: software demand is not disappearing, only being reshaped by automation.

- Notable EU earnings: Rolls-Royce is the clear outperformer as multiple brokers highlight its transformed cash generation, strong 2025 print, firm pricing power across divisions, and upgraded 2028 guidance. A £7-9B buyback for 2026-28 reinforces confidence. Engie also trades sharply higher after its acquisition of UK Power Networks, despite valuation concerns, with the deal meaningfully improving regulated-earnings visibility and prompting stronger 2026 guidance. Schneider Electric advances as markets absorb the CFO transition, noting resilient energy-management performance and strong datacenter demand. By contrast, WPP trades lower on a weak 2026 outlook despite a structured turnaround plan, while Hikma Pharmaceuticals falls sharply on earnings.

- Asia closed higher with KOSPI outperforming +3.7%. EU indices -0.1%. US futures -0.1%. Gold +0.5%, DXY +0.1%; Commodity: Brent -0.9%, WTI -1.1%; Crypto: BTC +4.8%, ETH +8.3%.

Asia

- Bank of Korea (BOK) left Repo Rate unchanged at 2.50%; As expected.

- China Pres Xi reiterates to 'weed out' corruption and maintain social stability.

- Hong Kong court overturns tycoon Jimmy Lai's conviction and sentence for fraud offenses (NOTE: 20-year National Security sentence still stands).

- China Consulate reiterates warning for China citizens to avoid travel to Japan.

Europe

- UK Foreign Sec: To unveil critical minerals deal with Kazakhstan.

- Iceland PM: To hold Referendum on whether to resume EU membership talks.

- ECB Chief Lagarde: We monitor FX, not target any rate; Trade remains challenging amid volatile policy; Wage growth remains elevated but has eased gradually - EU parliament comments.

- Norway Central Bank (Norges) Q1 Expectations Survey: Short-term inflation expectations rose among most groups except economists.

- Finland Fin Min Purra: Austerity needs for next govt are >€10.0B.

Americas

- US Pres Trump and Vance outline Actions to Address Gov't funded Fraud, Waste, and Abuse.

- US Sec of State Rubio: Made aware by Cuban authorities about of an incident off the coast of Cuba.

- Brazil Pres Lula said to have meet earlier in Feb with BTG, Petrobras, BNDES Shell and Cosan regarding Raizen to avoid bankruptcy.

Tensions/conflicts

- Iran and US reportedly start third round of talks in Geneva.

- Iran Foreign Ministry Spokesperson: Our team has 'reasonable amount of flexibility' in US nuclear talks in Geneva.

- China MOFCOM: China ready to play 'constructive role' in Iran.

- Thailand, US lead 30 nations in 'largest ever' military drills in SE Asia.

- South Korea Pres Lee: Will continue to ease relations with North Korea.

- Poland Dep PM Sikorski: Poland has and will be a loyal ally of U.S. but we can not be 'suckers'.

Speakers/fixed income/FX/commodities

Equities- Indices [Stoxx600 +0.09%, FTSE +0.14%, DAX +0.07, CAC-40 +0.67%, IBEX-35 -0.25%, FTSE MIB +0.09%, SMI +0.06%, S&P 500 Futures -0.01%].

Market Focal Points/Key Themes: European indices open mixed with a downward bias and failed to gain momentum through the early part of the session; lack of enthusiasm attributed to earnings; outperforming sectors include communication services and consumer discretionary; among sectors inclined to the downside are financials and telecom; earnings expected in the upcoming US session include Dell, Autodesk, Intesa Sanpaolo and Saint-Gobain.

Equities:

- Consumer: Puma [PUM.DE] +7.5% (earnings), Ocado [OCDO.UK] -8.5% (earnings).

- Industrials: Schneider Electric [SU.FR] +3.5% (earnings; call comments), Rolls-Royce [RR.UK] +1.5% (earnings), Stellantis [STLA.NL] +0.5% (final results).

- Telecom: Deutsche Telekom [DTE.DE] +0.5% (earnings), WPP [WPP.UK] -6.0% (earnings; new strategy).

- Tech: Aixtron [AIXA.DE] +2.0% (earnings; guidance), ASML [ASML.NL] +1.0% (NVDA earnings).

Speakers

- ECB Chief Lagarde: We monitor FX, not target any rate; Trade remains challenging amid volatile policy; Wage growth remains elevated but has eased gradually - EU parliament comments.

- Japan PM Takaichi: Reiterates hard to say how specific factors impact FX; Reiterates closely watching FX moves with a high sense of urgency.

- BOJ Gov Ueda: Will examine the impact of Dec and earlier rate hikes - Yomiuri Shimbun.

- BOJ board member Takata [hawkish dissenter at Jan 2025 and Sept 2024 policy decision]: Need to be mindful of upside price risks - speech in Kyoto.

- Bank of Korea (BOK) Gov Rhee: Govt bond yield-to-policy rate spread is excessive - post-rate decision comments.

Economic data

- (IS) Iceland Feb CPI M/M: 0.9% v 0.4% prior; Y/Y: 5.2% v 5.2% prior.

- (IT) Italy Feb Consumer Confidence: 97.4 v 97.0e.

- (EU) Euro Zone Jan M3 Money Supply Y/Y: 3.3% v 2.9%e.

- (TW) Taiwan Jan M2 Money Supply Y/Y: 5.2% v 5.0% prior.

- (SE) Sweden Feb Consumer Confidence: 96.3 v 95.5e; Manufacturing Confidence 97.7 v 1 03.6 prior; Economic Tendency Survey 100.1 v 103.5e.

- (TR) Turkey Jan Trade Balance (TRY): -8.4B v -8.4Be.

- (SE) Sweden Jan Household Lending Y/Y: 3.0% v 2.9% prior.

- (TR) Turkey Feb Economic Confidence: 100.7 v 99.4 prior.

- (FI) Finland Jan House Price Index M/M: -0.4% v -1.4% prior; Y/Y: -2.8% v -4.5% prior.

- (FI) Finland Feb Consumer Confidence: -10.5 v -8.7 prior; Business Confidence: +3 v -0 prior.

- (FI) Finland Jan PPI M/M: +4.3 v -1.0% prior; Y/Y: +1.9% v -0.8% prior- (JP) Japan Jan Final Machine Tool Orders Y/Y: 25.3% v 25.3% prelim.

- (JP) Japan Dec Final Leading Index: 111.0 v 110.2 prelim; Coincident: 114.3 v 114.5 prelim.

- (SG) Singapore Jan Industrial Production M/M: 5.3% v 6.0%e; Y/Y: 16.6% v 11.6%e.

Fixed income issuance

- Italy Debt Agency (Tesoro) sells €6.5B vs €5.5–6.5b indicated in 5-year and 10-year BTP bonds.

- Italy Debt Agency (Tesoro) sells €2.5B vs. €2.0-2.5B indicated range in Apr 2035 Floating Rate Note.

Looking ahead

- 05:30 (DE) Germany to sell combined €2.0B in 2038 and 2041 Bunds.

- 05:30 (PL) Poland to sell Bonds.

- 05:30 (BE) Belgium Feb CPI M/M: 0.4%e v 0.4% prior; Y/Y: No est v 1.1% prior.

- 06:00 (IL) Israel Dec Manufacturing Production M/M: No est v 6.3% prior.

- 06:00 (RU) Russia to sell OFZ Bonds.

- 06:00 (BR) Brazil Feb FGV Inflation IGPM M/M: No est v 0.4% prior; Y/Y: No est v -0.9% prior.

- 06:00 (IL) Israel Jan Unemployment Rate: No est v 3.1% prior; Broad Unemployment Rate: No est v 3.8% prior.

- 06:30 (CZ) Czech Republic sells combined CZK9.0B in 2022, 2037 and 2044.

- 07:00 (MX) Mexico Jan Unemployment Rate: No est v 2.4% prior.

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

- 08:30 (US) Initial Jobless Claims: No est v K prior; Continuing Claims: No est v M prior.

- 08:30 (CA) Q4 Current Account Balance: No est v -$9.68B prior.

- 08:30 (US) Weekly USDA Net Export Sales.

- 10:30 (US) Weekly EIA Natural Gas Inventories.

- 11:00 (US) Feb Kansas City Fed Manufacturing Activity: No est v 0 prior.

- 16:00 (NZ) New Zealand Feb ANZ Consumer Confidence Index: No est v 107.2 prior.

- 18:30 (JP) Japan Feb Tokyo CPI Y/Y: No est v 1.5% prior; CPI Ex-Fresh Food Y/Y: No est v 2.0% prior; CPI Ex-Fresh Food, Energy Y/Y: No est v 2.4% prior.

- 18:50 (JP) Japan Jan Retail Sales M/M: No est v -2.0% prior; Y/Y: No est v -0.9% prior; Dept. Store, Supermarket Sales Y/Y: No est v -0.1% prior.

- 18:50 (JP) Japan Jan Preliminary Industrial Production M/M: No est v -0.1% prior; Y/Y: No est v 2.6% prior.

- 19:01 (UK) Feb GfK Consumer Confidence: No est v -16 prior.

- 19:01 (UK) Feb Lloyds Business Barometer: No est v 44 prior; Own Price Expectations: No est v 62 prior.

- 19:30 (AU) Australia Jan Private Sector Credit M/M: No est v 0.8% prior; Y/Y: No est v 7.7% prior.

- 20:00 (PH) Philippines Jan Trade Balance: No est v -$3.5B prior; Exports Y/Y: No est v 23.3% prior; Imports Y/Y: No est v 7.1% prior.

- 21:00 (SG) Singapore Jan M2 Money Supply Y/Y: No est v 6.2% prior; M1 Money Supply Y/Y: No est v 12.6% prior.

- 23:00 (TH) Thailand Jan Manufacturing Production Y/Y: No est v 2.5% prior; Capacity Utilization ISIC: No est v 57.6 prior.