Markets Today: Euro Zone output rebounds, gold and silver extend slide, FTSE 100 resilient

Ben Graham · 2 horas atrás

Asia Market Wrap - Asian markets volatile after last week's selloff

Japan's stock market had a rough Monday, with the Nikkei index dropping 1.2% for its biggest weekly loss. The day actually started well because a weak yen helped exporters and positive election news for Prime Minister Sanae Takaichi boosted confidence.

However, that optimism vanished when technology and mining stocks tanked. The main trigger was bad news for the AI industry: reports surfaced that Nvidia might cancel a massive $100 billion investment in OpenAI, which caused tech stocks to plummet across Asia, including a 4% drop in South Korea’s Kospi index.

Meanwhile, Indonesia's stock market is facing its own crisis, losing over $80 billion in value recently. Investors are pulling their money out of the country because they are losing faith in President Prabowo Subianto’s economic plans and are worried about a lack of transparency in how the markets are run. Things have become so concerning that a major global index provider warned Indonesia might be downgraded to "frontier status," which essentially means it would be seen as a much riskier and less developed place to invest.

Most Read: 2026 US Dollar Forecast: How the Fed, Government Spending, and AI Will Drive Volatility

Euro Zone output rebounds

Europe’s manufacturing sector is still struggling, marking its third straight month of decline. While a key survey showed that factories are actually starting to produce more goods again, the overall industry is shrinking because new orders continue to drop. Think of it like a factory that is running its machines but doesn't have enough new customers to keep the momentum going.

On top of that, factories have been cutting jobs for nearly three years, though the layoffs are finally starting to slow down.

The situation across Europe is very "hit or miss" depending on the country. Greece and France are seeing their factories grow, with France hitting its best streak in over three years. However, the biggest economies like Germany, Italy, and Spain are still stuck in a slump.

Making matters worse, the cost of raw materials and energy is rising at the fastest rate in three years, but factories aren't able to raise their own prices to cover those costs, which puts a squeeze on their profits.

Despite these current headaches, there is a glimmer of hope. Factory owners are feeling more confident about the future than they have since early 2022, betting that things will eventually turn around later this year.

European Session - European stocks start the month in the red

European stock markets started February on a low note, with major indexes like the STOXX 50 and STOXX 600 both losing value. This decline followed a global trend where investors pulled their money out of riskier investments.

Two main factors caused this: first, a massive sell-off in commodities like oil and metals, and second, renewed worries that Artificial Intelligence (AI) companies might be overvalued.

The mood shifted largely because of news from the US and the tech world. Investors are nervous about Kevin Warsh being nominated to lead the US Federal Reserve, fearing he will take a "tougher" approach to the economy.

At the same time, a report revealed that Nvidia is reconsidering a massive $100 billion investment in OpenAI, which caused tech stocks to slide.

While big energy and mining companies like Shell and Rio Tinto saw their stock prices drop, some consumer companies like Nestlé and Unilever actually managed to gain value as investors looked for safer places to put their money.

On the FX front, the US dollar remained strong on Monday as investors processed the news that Kevin Warsh has been nominated to lead the Federal Reserve. This nomination has given the dollar a boost because traders expect Warsh to be more focused on controlling inflation.

Meanwhile, the Japanese yen is back in the spotlight after Prime Minister Sanae Takaichi spoke in favor of a weaker currency to help Japanese exporters. This message contradicts her own finance officials, who have been trying to stop the yen from losing too much value, leading to some confusion and volatility in the market.

In Europe and the UK, the euro and the pound remained mostly steady as investors wait for upcoming interest rate decisions from their central banks later this week.

Elsewhere, the Australian dollar fell slightly before its own central bank meeting, while the Canadian and New Zealand dollars also saw small drops.

Additionally, the dollar grew stronger against the Norwegian krone because oil prices crashed by 5%.

Currency Power Balance

2026-02-02 10_55_19- — Source: OANDA Labs

Oil prices took a sharp dive on Monday, falling about 5% after President Donald Trump suggested that tensions with Iran were cooling off.

Prices had reached high levels in January because people were worried a conflict might disrupt global oil supplies, but those fears eased when Trump mentioned that Iran was "seriously talking" with the US government. Because the risk of a military strike has faded, both global Brent crude and US oil prices dropped by over $3.50 per barrel, erasing some of the big gains seen last month.

Beyond the news out of the Middle East, other factors are also helping to push prices down. Oil production in places like the US and Kazakhstan is back on track after recent disruptions, meaning there is more oil available for everyone. Between the increase in supply and the decrease in political drama, the pressure that was keeping energy prices high has finally started to lift.

On Monday, precious metals continued their slide in the Asian session. Prices for gold, silver, oil, and industrial metals all fell sharply, mostly because investors are reacting to the news that Kevin Warsh has been chosen as the next leader of the Federal Reserve.

Market participants are worried that Warsh will be "tougher" on the economy, which led to a massive wave of selling that has lasted for two days straight.

Gold prices dropped 5% to their lowest level in weeks, while silver fell more than 7%, a shocking reversal after both reached record highs just last week.

The selling got even more intense because the main exchange for these metals (CME Group) decided to raise the "down payment" (called a margin) required to trade them. This move forced many traders to sell their holdings because they didn't have enough cash to cover the new, higher costs.

This follows a historic "crash" that started on Friday, which saw gold suffer its biggest one-day drop since 1983 and silver plunge by 27%, the largest daily loss ever recorded for the metal.

Gold and Silver bulls are showing some life here in early European trade with Gold recovering to trade around the $4700/oz mark.

Read More:

Economic Calendar and Final Thoughts

Data is largely thin today with Euro Area PMI released already.

There will be some earnings releases from the US before the market open with Disney reporting results.

In the US session we will get some key PMI data releases and some Fed speakers.

The US dollar is starting to gain strength again. Over the past week, the dollar’s value had been dropping because people were worried the government might intentionally weaken it (a trend known as the "de-basement trade").

However, that trend has reversed now that President Trump has nominated Kevin Warsh as the next head of the Federal Reserve. Because investors were previously over-invested in gold and silver, they are now selling those metals and moving their money back into the dollar, which is helping the currency bounce back.

I was and remain of the belief that the dollar’s recent drop didn't actually match the reality of the US economy, so this recovery makes sense.

Moving forward, the dollar’s value will likely be driven by new economic reports and changes in interest rates rather than just rumors. For now, the expectation is that the dollar will continue to get stronger in the coming days as the market stabilizes.

2026-02-02 10_55_46-Greenshot — For all market-moving economic releases and events, see the MarketPulse Economic Calendar. (click to enlarge)

Chart of the Day - FTSE 100

From a technical perspective, the FTSE 100 index has broken back above the 100-day MA.

The FTSE showed resilience last week in the face of a broad market selloff with the index holding comfortably above the 10000 point handle.

This in my view is crucial as it keeps the bullish momentum intact.

Looking to further upside potential and a four-hour candle close above the swing highs resting at 10273 is needed.

A move lower from here may find support at the 200-day MA at the 10039 handle before the 10000 handle comes into focus.

FTSE 100 Index Daily Chart, February 2, 2026

UK100GBP_2026-02-02_11-05-05 — Source: TradingView.com (click to enlarge)

Safe Trading Week to All.

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