European equities traded higher on Friday, supported by generally upbeat corporate earnings and resilient economic data, even as geopolitical risks remained firmly in focus. By 09:30 GMT, Germany’s DAX was up around 1%, France’s CAC 40 had added 0.5% and London’s FTSE 100 was 0.2% higher.
Eurozone economy shows tentative improvement
Economic data pointed to a gradual recovery across parts of the euro area. France’s economy expanded modestly in the fourth quarter of 2025, easing from the strong rebound seen over the summer but still delivering a better-than-expected performance for the year as a whole. Quarterly GDP growth slowed to 0.2% from 0.5% in the third quarter, while full-year growth reached 0.9%, exceeding the 0.7% assumption used in government budget forecasts.
In Germany, labour market data highlighted ongoing weakness, with unemployment unchanged in January. On a seasonally adjusted basis, the number of people out of work held steady at 2.976 million, leaving the jobless rate unchanged at 6.3%. Against this backdrop, the European Central Bank is widely expected to leave interest rates unchanged at its meeting next week, with inflation close to target and signs of stabilisation emerging in the broader regional economy.
Focus turns to geopolitics and the Federal Reserve
Geopolitical tensions continued to weigh on sentiment. Reports suggested the White House is considering further military action against Iran as additional naval forces move into the region. Separately, U.S. President Donald Trump signed an executive order declaring a national emergency and outlining a framework for potential tariffs on goods from countries that trade oil with Cuba.
Trump also said late on Thursday that he would announce his nominee for the next Chair of the Federal Reserve later in the session. Media speculation has centred on former Fed Governor Kevin Warsh as the leading candidate.
Corporate highlights: Adidas, Swatch and Caixabank
On the corporate front, Adidas (BIT:1ADS) drew attention after reporting record sales for 2025 and announcing a €1bn share buyback programme. Swatch (TG:UHR) said sales rose 4.7% at constant exchange rates in the second half of last year, although the Swiss watch group also reported a sharp decline in full-year profit.
In the banking sector, CaixaBank (TG:A2RZTQ) posted net profit of €5.89bn for 2025, up 1.8%, delivering a 17.5% return on tangible equity. The bank also cut its non-performing loan ratio to a record low of 2.1% and raised its dividend by 15%.
In the United States, Apple (NASDAQ:AAPL) comfortably beat profit and revenue expectations for its fiscal first quarter, benefiting from its strongest quarterly iPhone sales growth in more than four years.
Oil and gold retreat from recent peaks
Commodity markets pulled back from recent highs. Oil prices eased on Friday, although both benchmarks remained on track for strong weekly gains amid concerns that a potential U.S. strike on Iran could disrupt supplies. Brent crude slipped 0.8% to $69.03 a barrel, while U.S. West Texas Intermediate fell 0.8% to $64.87. Despite the daily decline, both contracts were heading for weekly gains of around 5% and their first monthly rise in six months, with Brent up more than 16% in January and WTI set to gain over 14%.
Gold prices also dropped sharply, retreating from record levels after news that President Trump is expected to announce his choice for the next Fed Chair later in the day. Kevin Warsh, now seen as the frontrunner, is viewed as less dovish than other candidates, prompting a rebound in the U.S. dollar and pressuring dollar-denominated commodities. Spot gold fell 5.4% to $5,061.59 an ounce, while April gold futures slid 6.4% to $5,024.68. Even so, gold prices remain up more than 20% so far in January, on track for a sixth consecutive monthly gain and their strongest monthly rise since 1982.
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