MARKET WRAPS

Stocks:

European indexes continued their advance Wednesday supported by a continent-wide jump in defense stocks.

Strong earnings from BAE systems drove the positivity, helping to put the FTSE 100 on course for its third consecutive record close.

Investors are digesting reports that European Central Bank President Christine Lagarde could resign before the end of her term in October 2027.

A departure before the April 2027 French presidential election would allow Emmanuel Macron to be among the EU leaders selecting her replacement.

"This raises the likelihood of getting a classical candidate and smoothens the process," Danske Bank said.

Later today, the minutes of the Federal Reserve's January FOMC meeting will be scoured for hints on the interest-rate outlook.

In the U.K., slowing inflation has furthered the chances of a Bank of England rate cut in March.

The BOE "likely has room to deliver another couple of 25bp rate cuts," J.P. Morgan Asset Management said.

U.S. Markets:

Stock futures were rising, suggesting the tentative recovery of tech stocks in the previous session could have legs.

On the economic data calendar today: durable goods orders, housing starts and industrial production.

Saxo Bank said the Fed minutes and Friday's U.S. PCE inflation data are the main market drivers in the near-term.

"Together, these releases can shift expectations around interest rates quickly."

Forex:

The dollar rose after Iran and the U.S. reported progress in nuclear talks and Japan agreed to invest about $36 billion in the U.S.

Iran said the two sides reached an understanding on some principles and the U.S. said progress was made.

The euro fell slightly against a stronger dollar. The European currency was little affected by the FT report about Lagarde's future.

Danske Bank said even if the news is confirmed, there is unlikely to be much market impact.

Sterling showed little reaction after the U.K. inflation data came in broadly as expected.

Bonds:

Treasury yields rose.

Pepperstone said the several economic data releases and the minutes of the latest Fed meeting out today are unlikely to move markets meaningfully .

DZ Bank forecast a rise in 10-year Treasury yields to 4.60% on a six-month horizon.

Driving factors include continued robust U.S. economic growth and the "ever-growing indebtedness of the U.S. government."

ING noted the 10-year Treasury yield averaged 4.2% over both the past year and the past three years. Its analysts "like the 4.2% average tendency."

Eurozone government bond yields rose , tracking Treasurys and showing no reaction to the Lagarde reports.

Wednesday's data calendar and sovereign-bond issuance are thin.

DZ Bank expects the 10-year Bund yield to rise slightly over the next year, supported by an economic upturn and a growing discussion about interest-rate hikes.

The debate "will in our view push yields up at the long end to around 3.10% in 12 months' time."

Energy:

Oil prices ticked higher as traders assessed progress in U.S.-Iran negotiations.

"Crude traders have adopted a wait-and-see stance as apparent diplomatic progress in U.S.-Iran nuclear talks has weighed on prices ," Saxo Bank said.

"However, the risk of sudden escalation--given the U.S. buildup of military assets and Iranian threats--is likely to sustain a geopolitical risk premium, currently estimated at $3-$5 per barrel."

Gas

European natural-gas prices fell below 30 euros a megawatt-hour as forecasts of warmer temperatures ease concerns over low storage levels.

Metals:

Gold prices rebounded above $4,900 as investors bought the dip following a two-day slide in thin trading conditions due to the Lunar New Year holiday.

"In the near term, expectations around rate cuts remain key, as lower borrowing costs would support non-yielding assets like gold ," MUFG said.

StoneX said gold could trade choppy between $4,800/oz and $5,100/oz for now based on technical analysis.

EMEA HEADLINES

BAE Systems Posts Sales Record as Europe Rearms

BAE Systems posted a 10% increase in sales in 2025, fueled by large orders for Eurofighter Typhoon jets, frigates and combat vehicles placed by European governments.

The London-listed aerospace and defense manufacturer said Wednesday that sales reached a record 30.66 billion pounds ($41.60 billion) last year.

Glencore's Earnings Fall Despite Second-Half Recovery

Commodities giant Glencore reported a fall in full-year earnings despite an improved performance over the second half.

The company said Wednesday that adjusted earnings before interest, taxes, depreciation and amortization fell 6% on year in 2025 to $13.51 billion. This compares with analysts' expectations of $13.31 billion, according to a consensus compiled by Visible Alpha.

ECB's Lagarde Hasn't Taken Any Decision on Term

European Central Bank President Christine Lagarde hasn't made a decision on whether to serve out her full term, which ends in October 2027, according to a spokesperson for the institution.

"President Lagarde is totally focused on her mission and has not taken any decision regarding the end of her term," the spokesperson said Wednesday.

Mediobanca Shares Rise After Monte dei Paschi Outlines Delisting Plan

Shares in Mediobanca rose after majority-owner Banca Monte dei Paschi di Sienna said it would delist the Italian investment bank from Milan's stock exchange.

The Italian group, which is considered the world's oldest bank still in operation and remains part-owned by the government, launched a surprise bid for its Milanese rival early last year. Its aim was to combine Mediobanca's heft in investment banking and wealth management with its own strength in retail banking to create the country's third-largest lender by assets.

Mistral AI to Buy Software Infrastructure Startup Koyeb

Mistral AI clinched its first acquisition with the purchase of infrastructure startup Koyeb as the French artificial-intelligence major looks to iron out its processes and bolster computing capabilities.

Europe's highest-profile AI platform said Koyeb's cloud-computing platforms and team help developers run and scale AI without infrastructure snags so they can focus primarily on writing code.

Carrefour Aims to Boost Tech, Focus on Key Regions

Carrefour released plans to bolster its digital presence and hone in on operations in key countries, as part of a broader strategic plan for the coming years.

The French retailer said Wednesday that it signed a partnership with artificial-intelligence company Vusion to digitize its hypermarkets and supermarkets in its home country. The multinational said it is targeting consistent market-share gains in Brazil, Spain and its home country following a strategic review.

GLOBAL NEWS

Are the Fed's Economic Models Wrong? Future Rate Moves Depend on the Answer.

The Trump White House and its allies have shown little confidence in the Fed's economic models, insisting that the central bank's forecasts are wrong. The criticism underlies President Donald Trump's repeated calls for lower interest rates, and shaped the president's lengthy search for a successor to Fed Chair Jerome Powell, whose term ends in May.

Officials close to Trump, including Fed Governor Stephen Miran, a recent appointee and former White House official, have argued that the Fed is relying excessively on backward-looking data, overstating housing inflation and underestimating productivity gains from artificial intelligence and deregulation. Former Fed Governor Kevin Warsh, Trump's nominee for chair, has made similar claims. As a result, these officials say, interest rates are higher than they should be, and the Fed can afford to ease sooner and more aggressively.

Fed Minutes Could Show Higher Bar for Rate Cuts as Inflation Lingers. What to Watch.

The Federal Reserve will release the minutes of its January meeting Wednesday at 2 p.m. Eastern, offering investors a detailed look at how close-or far-policymakers believe they are from cutting rates again.

When officials met in late January, they left the federal-funds rate unchanged at 3.5% to 3.75%, pausing after three rate cuts late last year. Since then, economic data have complicated the outlook. Inflation remains above the Fed's 2% target and employment has somewhat stabilized. Growth, meanwhile, appears solid.

The Phantom Stealth Fighter That Exposes Europe's Deep Divisions Over Defense

It was billed as the answer to high-tech U.S. stealth fighters. Instead, an ambitious pan-European project has become a case study into some of what has gone wrong with the region's defense push.

The French, German and Spanish Future Combat Air System project was meant to build a next-generation aircraft to catch up with the latest U.S., Chinese and Russian models. Now the venture has devolved into bickering between defense companies Airbus and Dassault Aviation-and between Berlin and Paris-over who gets to lead its development, with all sides now questioning its future.

Japan Plans $36 Billion in U.S. Investments Under Trump Administration Deal

WASHINGTON-Japan is planning roughly $36 billion in U.S. investments spanning critical minerals, oil and gas infrastructure and power generation as part of a $550 billion strategic trade and investment agreement, according to Commerce Department officials.

"Our MASSIVE Trade Deal with Japan has just launched!" President Trump posted on social media on Tuesday.

Vance Says Iran Is Ignoring Core U.S. Demands in Talks

GENEVA-Vice President JD Vance said Iran had failed to acknowledge core U.S. demands in talks here Tuesday, after which Washington said it had agreed to give Tehran two weeks to close the gaps between the sides.

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February 18, 2026 05:01 ET (10:01 GMT)

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