EMEA Morning Briefing: Nvidia Profit Soars, Soothing Investor Jitters

MARKET WRAPS

Watch For:

Eurozone FCCI Flash Consumer Confidence Indicator; trading updates for Investec, Johnson Matthey, Halma, LondonMetric, JD Sports Fashion

Opening Call:

European stock futures were higher after Asia stocks broadly rose. The dollar strengthend and U.S. Treasurys were flat. Gold fell and oil rose.

Equities:

European futures were higher as an impressive earnings report from Nvidia, a bellwether for the AI trade that has carried markets to records in recent weeks.

Tech stocks overall recovered some ground after concerns about AI companies' lofty valuations and massive spending on AI infrastructure dragged major indexes to the most-significant pullback since April's tariff turmoil.

"The AI narrative is still strong," said Jay Woods, chief market strategist at Freedom Capital Markets. "The demand is there, and some of the selloff in these other names was a little bit extreme. I believe the stage is set for this market to continue to rally into year-end."

Separately, investors looked ahead to the release of delayed September payrolls data due later in the day.

Complicating the outlook, however, the Bureau of Labor Statistics said that it won't publish a stand-alone October jobs report, opting instead to integrate parts of October's jobs data into releases in December.

Forex:

Germany's fiscal expansion plans could boost growth and inflation next year but this is unlikely to drive significant euro gains, said HSBC Global Investment Research strategists.

"With expectations already running high over what [German Chancellor Friedrich] Merz's government will deliver next year, the risk of under-delivering exists."

The hype surrounding the fiscal plans for the euro has also passed, leaving the bigger drivers to be the dollar and Federal Reserve's next moves, they said.

HSBC expects the euro to rise to $1.20 this quarter before falling to $1.18 by the second quarter of 2026 as it expects the Fed to cut rates in December but deliver no more cuts in 2026.

Bonds:

U.S. Treasury yields were flat after bouncing from an early downturn and could snap two-days of declines as the mood improves on Wall Street.

August's trade deficit was narrower than expected, in a tailwind for 3Q GDP "since it means that more U.S. expenditures were directed toward domestically-produced goods and services rather than foreign ones," said Comerica's Bill Adams.

Energy:

Oil rose on possible bargain hunting. Prices plunged overnight due to signs of weaker demand in the U.S. and easing supply concerns, as geopolitical risks appear to ease between Ukraine and Russia, said the ANZ Research team.

Investors will continue to monitor the fallout from the U.S. sanctions on two major Russian producers, said UOB's global economics & markets research team.

Metals:

Gold fell after fluctuating on possible investment demand levels.

TD Securities' analysis of '13F' filings for institutional holdings in the biggest physical gold ETF suggests that the breadth of companies buying gold has increased.

The data also point to a broadening participation in a consensus gold bull market, said the brokerage's Daniel Ghali in a research report.

Moreover, central bank purchases will probably stay as a secular trend, the senior commodity strategist added.

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Base metals rose, with recent selling pressures appearing to have stabilized, said Sucden Financial analysts in a note.

Despite a stronger U.S. dollar, sentiment is tracking equity markets, with key technical levels in major indices still intact, the team wrote.

Copper was likely also bolstered by improved sentiment on a report from Chile's copper agency Cochilco, which said it's now expecting an improved price environment, said ANZ Research.

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Iron ore fell as a persistent downturn in the Chinese property sector continued to weigh on demand.

New construction starts are set to fall for the fifth consecutive year in 2025, said Commonwealth Bank of Australia analyst Vivek Dhar.

"With property construction accounting for 30% of China's steel demand, steel and iron ore prices are the most exposed to weaker new construction starts," Dhar said.

TODAY'S TOP HEADLINES

U.S. Approves Deal to Sell AI Chips to Middle East

The Commerce Department approved the sale of up to 70,000 advanced artificial-intelligence chips to two companies based in the United Arab Emirates and Saudi Arabia, a big win for the Middle East nations as they seek to catch up in the AI race.

The approvals are a reversal from earlier this year, when some administration officials rejected the idea of exporting directly to the state-backed companies over security concerns. President Trump has been talking to leaders of both countries about chip access since he visited in May, discussions that continued this week with Saudi Arabia Crown Prince Mohammed bin Salman.

Fed's October Rate Decision Fueled Pushback Over Possible December Cut

Divisions over whether the Federal Reserve should cut interest rates next month deepened at officials' October meeting, leaving a growing contingent-and potentially a narrow majority-of policymakers uncomfortable with a December rate reduction.

"Participants expressed strongly differing views about what policy decision would most likely be appropriate at the committee's December meeting," according to a written record of the meeting released Wednesday afternoon with the customary three-week lag.

Ukraine Strikes Russia With Atacms After Trump Lifted Long-Range Missile Ban

Ukraine used U.S.-supplied long-range missiles to strike Russian territory, the first time it has acknowledged deploying the systems, known as Atacms, since President Trump lifted restrictions on their use.

The move suggests the U.S., which vetoed such attacks when Trump returned to office, is now willing to authorize such strikes and provide the targeting intelligence on which they rely.

Nvidia Profits Soar, Soothing Investor Jitters Over AI Boom

Nvidia reported record sales and strong guidance Wednesday, helping soothe jitters about an artificial intelligence bubble that have reverberated in markets for the last week.

Sales in the October quarter hit a record $57 billion as demand for the company's advanced AI data center chips continued to surge, up 62% from the year-earlier quarter and exceeding consensus estimates from analysts polled by FactSet. The company increased its guidance for the current quarter, estimating that sales will reach $65 billion-analysts had predicted revenue of $62.1 billion for the quarter.

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Expected Major Events for Thursday

00:01/UK: BRC Consumer Sentiment Monitor

05:30/NED: Oct Unemployment

05:30/NED: Nov Consumer confidence survey

07:00/SWI: Oct Trade Balance

07:00/GER: Oct PPI

07:00/DEN: 3Q Preliminary GDP

07:00/DEN: Nov Consumer expectations

07:00/DEN: 3Q Labour force survey

08:00/SPN: Sep Trade Balance

10:00/EU: Sep Construction output

10:00/LUX: Oct Unemployment

10:00/BEL: Nov Consumer Confidence Survey

11:00/UK: Oct Aluminium Production report

11:00/IRL: 3Q Labour Force Survey

11:00/FRA: 3Q OECD Quarterly National Accounts: GDP growth

11:00/UK: Nov CBI Industrial Trends Survey

15:00/EU: Nov FCCI Flash Consumer Confidence Indicator

15:59/GRE: Sep Balance of Payments

17:59/POR: Sep ICSG Copper Report

All times in GMT. Powered by Onclusive and Dow Jones.

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(END) Dow Jones Newswires

November 20, 2025 00:15 ET (05:15 GMT)