Financial Markets Resuscitate, Dollar on Hold

World stock markets ended Friday higher, with the dollar showing choppiness. Investors took advantage of a brief lull caused by the fact that US President Donald Trump has yet to impose retaliatory tariffs, raising hopes for further negotiations.

Gold Is a Favorite: Investors Seek a Safe Haven

Trump's earlier plans to impose tariffs on all countries that tax US imports have stoked fears of a global trade war. As a result, gold prices have soared, hitting record highs early in the week. The precious metal is on track for a seventh straight week of gains, confirming its status as a safe haven amid uncertainty.

Investigation Instead of Immediate Sanctions

Instead of imposing new tariffs, the US president on Thursday ordered a lengthy investigation into import duties imposed by other countries on American goods. The process could take weeks or even months, after which retaliatory measures would be taken.

Barclays: Uncertainty Remains

"Financial markets have taken the pause in tariffs as a positive sign, but it is unclear whether this means the likelihood of tariffs being imposed is reduced," Barclays analysts wrote in a report.

China Trade War: Playing to Get Ahead

Trump escalated trade tensions last week by first imposing tariffs on Canada and Mexico, then suspending them while keeping tough tariffs on Chinese imports.

Chinese Tech on the Rise

In Asia, investors showed increased interest in the Chinese tech sector. The Hang Seng Tech Index (.HSTECH) hit a three-year high on Thursday, helped by a breakout performance from innovative startup DeepSeek.

Despite the temporary relief, the market remains on edge as the threat of a full-scale trade war lingers.

Hong Kong Index Posts Impressive Gains

Hong Kong stocks posted strong gains on Friday, with the benchmark Hang Seng Index (.HSI) adding more than 2% to end the week up 5%. It's the fifth straight week of gains, making the current reading the best in four months. Investor optimism has been fueled by a rebound in the tech sector and robust economic signals from China.

Regional Markets Gain, but Japan Loses Ground

MSCI's broad index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) rose 0.37%, approaching a two-month high set on Thursday. However, Japan's Nikkei (.N225) ended in the red, losing 0.8%. Despite Friday's decline, the Japanese market nevertheless continues to show solid weekly growth.

Inflation signals from the US: the market is holding its breath

Fresh data from the US, published on Thursday, showed a significant increase in producer prices in January. These figures strengthened market participants' belief that the Federal Reserve (Fed) will not rush to cut interest rates and will probably postpone this step until the second half of the year.

However, there were also encouraging moments in the inflation statistics. Some components of the data that go into the calculation of the personal consumption expenditure (PCE) indicator, a key indicator of inflation for the Fed, showed a muted increase. This gave hope that the final PCE figure could be lower than current forecasts.

Consumer price index surprises markets

These data came shortly after the consumer price index (CPI) on Wednesday posted its sharpest increase in 18 months. Such rapid dynamics have once again cast doubt on the prospects for an early easing of monetary policy.

Bond yields: unexpected decline

Amid this news, the yield on the benchmark 10-year US Treasury note remained stable at 4.531%. The day before, it fell by 10 basis points - this was the largest daily drop in the last month.

Dollar loses ground after sudden fall

The US currency came under pressure: the dollar index, which measures its exchange rate against a basket of other world currencies, fell to 107.13 points. This 0.8% drop, recorded on Thursday, was the largest one-day decline since January 20. Investors continue to revise their expectations about the future policy of the Fed, which is putting pressure on the dollar.

Outlook remains uncertain

Global markets remain cautious. Despite the positive dynamics of Asian indices, global economic uncertainty related to inflation processes and geopolitical risks continues to keep investors on edge. In the coming weeks, market participants will closely monitor further signals from the Fed and the dynamics of trade relations between the United States and its key partners.

The euro consolidates at a two-week high

The European currency demonstrated cautious dynamics on Friday, hovering around the $1.0453 mark, the highest value in the last two weeks. Investors are closely monitoring macroeconomic signals that may affect the further trajectory of the euro, including the European Central Bank's statements on the outlook for interest rates.

The oil market breaks a streak of declines

Oil prices have begun to recover after a three-week decline. The rise in quotes is associated with increased demand for fuel amid seasonal factors and improved expectations for global economic activity.

Thus, Brent crude futures added 0.2%, reaching $75.17 per barrel. American WTI oil also showed growth - by 0.14%, stopping at $71.39 per barrel. Investors hope that a gradual recovery in industrial demand and stabilization of global trade flows will support the current upward trend.

European stock markets froze after record levels

On Friday, European stock markets took a break after an impressive rally that lasted several sessions in a row. However, even a short respite did not prevent the pan-European STOXX 600 index (.STOXX) from staying on track for an eighth consecutive week of growth - the longest streak since March 2024.

The index was down 0.1% by Friday morning, but had consistently set new all-time highs over the previous four sessions. Market participants are positive about the prospects for the European economy, despite global geopolitical risks.

Luxury Beyond Competition: Hermes Inspires the Market

French luxury goods maker Hermes (HRMS.PA) was the real winner of the day, demonstrating an impressive 4.2% growth in its shares. This jump occurred after the publication of its fourth-quarter sales report: the company reported an 18% increase in revenue, which exceeded analysts' forecasts.

Buyers' interest in the iconic Birkin bags and other luxury accessories remained stably high despite fluctuations in the global economy. Hermes once again confirmed that demand for premium goods among wealthy clients remains stable even during periods of general market volatility.

Domino Effect: Other Brands Also Win

Following Hermes' success, shares of other luxury industry companies also went up.

• Burberry (BRBY.L) rose 1.6% despite earlier concerns about slowing demand in Asian markets;

• Richemont (CFR.S) added 1.4% on positive expectations for jewelry sales in Europe and the United States;

• LVMH strengthened its position by 1.7%, continuing to maintain its status as the world leader in the luxury industry;

• Kering (PRTP.PA) demonstrated growth of 1.4% despite the difficult situation with the Gucci brand.

Experts note that the resilience of the premium segment confirms the global trend: wealthy buyers continue to actively invest in quality and exclusivity despite inflationary unrest and economic instability.

Looking ahead: betting on stability

New challenges await market participants. The euro, oil and European stocks demonstrated confident growth this week, but the future outlook remains uncertain. The decisions of the US Federal Reserve and the European Central Bank on key rates, as well as possible geopolitical fluctuations, could become drivers of further changes in financial markets.

Investors are already bracing themselves for the coming weeks to bring many surprises.

European personal goods market on the rise

The personal goods sector in Europe showed notable gains on Friday. The relevant index (.SXQP) rose by 1.1%, continuing the upward trend set by impressive results of luxury companies. The success of French Hermes with its 18% increase in sales in the fourth quarter became a kind of catalyst for growth for the entire segment.

Investors continue to bet on the stability of demand for premium goods despite economic fluctuations and persistent inflation risks. Analysts believe that interest in high-quality and exclusive brands will remain stable in the near future, especially against the backdrop of the growing wealth of wealthy buyers in Asia and the Middle East.

Medical sector under pressure: Fresenius shares fall

The medical sector (.SXDP) was in the opposite direction, losing 0.7%. The main factor behind the negative movement was a 6% drop in Fresenius Medical Care (FMEG.DE) shares. The sharp decline was caused by the publication of a disappointing forecast by the American company Dialysis DaVita (DVA.N), registered in the United States.

DaVita said that it expects profit for the year to be below the forecast values. Against the backdrop of this news, the company's shares fell by 11% in over-the-counter trading on Thursday. Investors are concerned that the slowdown in the dialysis services sector could put pressure on other market players.

US trade policy: pause instead of tariffs

Meanwhile, the attention of the markets has switched to the situation around American trade barriers. US President Donald Trump on Thursday refrained from introducing new tariffs, which left room for possible negotiations with foreign trading partners.

Earlier, Trump's statements about his intention to impose tariffs in response to the taxation of American imports raised concerns about the outbreak of a large-scale trade war. However, the decision to take a pause at this stage was perceived by the markets as a positive signal.

Experts believe that if the negotiations are productive, this could ease tensions in the global trade arena and support further growth in stock markets. However, there is a risk that in case of failure, tariffs will still be introduced, which will have a negative impact on international trade relations.

The market held its breath in anticipation of the next steps

Thus, the end of the week on global markets turned out to be mixed. While European companies focused on consumer goods are enjoying growth, the medical sector is experiencing significant difficulties. At the same time, investors are anxiously watching the developments in the field of international trade, where much depends on further decisions by the White House.

The coming weeks may be decisive: either the markets will see a strengthening of their positions after diplomatic trade steps, or they will face a new wave of volatility with the resumption of the tariff standoff.