A look at the day ahead in European and global markets from

Ankur Banerjee

Investors are breathing a sigh of relief for now as the

roadmap for Donald Trump's reciprocal tariffs suggested room for

negotiations, while results from luxury firm Hermes will be the

main event rounding out a series of strong earnings in Europe.

Asian markets also took their cues from Wall Street's

positive reaction to U.S. inflation data, which suggested that

prices remain consistent with the Federal Reserve's target

range, while Chinese tech shares extended their rally

after home-grown start-up DeepSeek's breakthrough last month.

Hong Kong's benchmark index was perched near a

four-month high and on course for its best week since September.

It's also on a five-week winning streak, the longest since 2022.

The Hang Seng's 11% rise so far this year has made it easily

the best performing major stock market in Asia and is among the

top globally. Germany's DAX index is leading the way

with a 14% gain this year, hitting a record high on Thursday.

Swiss, French and Spanish benchmarks

are not far behind, having clocked double-digit gains so far in

2025.

In corporate news, earnings from Hermes will take

the spotlight in Europe, where investors are keen to learn

whether the Birkin bag maker remains best-placed to weather a

downturn in the luxury sector, given its wealthier customer

base.

Luxury goods companies have been grappling with their

slowest sales in years, as consumers in China tighten their

belts, although upbeat results from Burberry ( BBRYF ), Cartier

owner Richemont and others have fuelled hopes the sector

is starting the year on firmer ground.

Traders in Europe may lock in profits after a strong run

this week, with the pan-European STOXX 600 index

closing at a record high every day this week and up almost 10%

year-to-date. Futures point to a lower open for European stock

markets.

For investors, the focus will be on the tariff saga after a

directive from Trump stopped short of imposing fresh duties, and

instead kicked off what could be weeks or months of

investigation into levies imposed on U.S. goods.

And finally, a valentine's day gift for TikTok fans in the

United States as the popular short-video app returned to the app

stores of Apple and Google.

Key developments that could influence markets on Friday:

- Euro zone Q4 GDP and employment data

- Hermes annual results