European Midday Briefing: Oil Prices Slip, Global Bond Markets Take a Breather

MARKET WRAPS

Stocks:

European shares were up Thursday while oil prices fell despite ongoing worries over a further escalation in strikes between the U.S. and Iran.

Brent crude edged below $95 a barrel, but prices remained elevated. President Donald Trump told the press in the Oval Office on Wednesday that the U.S. is ready to launch more strikes at Iran at "any time," but that renewed fighting would not last "too long."

"Shipping markets now price a 'no-Mideast-deal' status quo for longer," Goldman Sachs said. "However, increasing market adaptability to the conflict, including a rise in dark transits and the price sensitivity of China crude imports, will likely continue to moderate the upside to crude prices, even in the case of prolonged disruptions in the Middle East."

Lower oil prices helped push yields lower, as well as signals from a Federal Reserve official that there isn't an urgent need to raise interest rates.

New York Fed President John Williams said in an interview with CNBC that he doesn't see clear-cut evidence right now that the Fed must raise interest rates to respond to persistent inflation.

However, ​CIFC Asset Management said bond yields have more room to rise due to multiple unresolved issues, conflicts, and no clear resolution timeline anywhere.

Investors were also on alert as the Japanese yen strengthened to a one-month high against the dollar, amid chatter that authorities could again intervene in foreign-exchange markets.

U.S. Markets:

Stock futures were higher Thursday as both oil prices and bond yields eased.

Investors will be keeping an eye out for the Institute for Supply Management's August report on business services purchasing managers' index due today.

Forex:

The dollar declined, driven by lower oil prices and no urgency by the Fed to raise interest rates.

Bonds:

Eurozone government bond yields fell in opening trade, taking a breather after hitting successive multiyear highs in previous sessions.

Treasury yields fell in early trade as oil prices retreated, albeit remaining at elevated levels.

Energy:

Brent crude futures fell 0.7%, while WTI is down 0.7%. Both benchmarks settled higher in the previous trading session, with Brent climbing above $95.

Metals:

Gold prices rose more than 1% after U.S. private payrolls data pointed to slower job growth in August. Prices could still decline, despite their recent bounce, said Tickmill. The precious metal may be weighed down by Fed Chair Warsh's recent hawkish remarks and oil-driven inflation concerns from the renewed U.S.-Iran tensions.

Copper

Copper prices were flat in early European trading, but still above the $14,200-a-metric-ton mark as persistent supply issues continue to provide support. Renewed attacks between the U.S. and Iran raised concerns that high energy prices could hit economic activity and metals demand.

EMEA HEADLINES

Swiss Inflation Jumps on Higher Energy Prices

Swiss inflation jumped in August, reversing several months of cooling price growth as renewed tensions in the Middle East pushed global energy costs higher.

The annual rate of inflation was 0.8%, compared with 0.4% in July, Swiss data agency FSO said Thursday. This marks the highest level of inflation since 2024.

European Stocks Have Powerful Catalysts for Growth, Says This Market Strategist

From the artificial-intelligence boom to the effects of the Iran war, global investors face myriad opportunities and risks. Kristina Hooper, chief market strategist at Man Group, studies the possibilities, advising portfolio managers and clients of the global alternative investment management firm how to navigate macroeconomic shifts. She also draws a bead on which markets are poised to outperform.

Before joining Man Group in 2025, Hooper was chief global market strategist at Invesco, and worked at Allianz Global Investors. Man Group is headquartered in London, with offices around the world. Hooper is based in New York.

Uber, Wayve Bring Robotaxis to London

Uber Technologies and British startup Wayve are rolling out their robotaxi service in London, securing a head start in a key battleground for autonomous-vehicle players.

Starting Thursday, passengers using Uber's app in the U.K. capital could be matched with a vehicle outfitted with Wayve's autonomous-driving technology. However, the service will come with a human driver behind the wheel to monitor and take over if needed, as the companies work to secure further regulatory approvals for fully driverless operations.

Saudi Nuclear Agreement Could Open a Path to 20% Enrichment

New details of the Trump administration's agreement to provide Saudi Arabia with a civilian nuclear program are spurring criticism that the landmark deal doesn't do enough to head off the risk of nuclear proliferation.

The text of the accord was shared with lawmakers last week along with a raft of related documents. It outlines a road map for how uranium might be enriched in the kingdom's territory after further consultations, including at a level of nearly 20%.

GLOBAL NEWS

Japanese Yen Strengthens Amid Intervention Chatter

The Japanese yen strengthened to a one-month high against the dollar, amid chatter that authorities could again intervene in foreign-exchange markets.

A sharp appreciation of the yen in New York trade on Wednesday sparked some speculation that Japanese authorities checked on currency rates, a move considered to be a sign or warning that they are on the verge of intervention.

Malaysia Central Bank Holds Rates as Growth Stays Firm

KUALA LUMPUR-Malaysia's central bank kept its benchmark interest rate unchanged, as expected, as strong economic growth and mild inflation gave policymakers room to remain on hold.

Bank Negara Malaysia on Thursday held its overnight policy rate at 2.75%, where it has stood since a 25-basis-point cut in July 2025.

The Bond Market Is Changing Fast. Investors Need a New Playbook.

The simple part of your portfolio is getting a lot more complicated.

As interest rates rise, bonds are becoming a drag on investment portfolios. Bond prices move inversely to yields, and yields have been climbing all through this year, leaving many investors with subpar performance or outright losses in their so-called safe investments.There is no quick fix for the problems bedeviling the bond market, whether persistent inflation, rising government debt, or the torrent of issuance by corporate borrowers that threatens to crowd out demand for U.S. Treasuries. Thus, bond investors now need a different and more strategic approach to their bondholdings than they did just a year or two ago.

Why Washington's 'Economic D-Day' Against Iran Faces Steep Odds

Last week, the Trump administration unveiled what it billed as an "Economic D-Day" aimed at forcing Iran to reopen the Strait of Hormuz and return to the negotiating table.

But the experience of Western sanctions and economic pressure on autocracies such as Cuba, North Korea, Venezuela and Syria shows the challenges facing Washington in trying to bend Tehran to its will. Indeed, the strongmen ruling such countries have historically used a mix of violence, economic adaptation and political suppression that enables them to withstand economic pain for years, if not decades.

Hegseth Extends Mideast Deployments Into 2027, Escalating Strain on Troops

When the U.S. launched its campaign against Iran six months ago, Defense Secretary Pete Hegseth promised a quick, decisive blow that would avoid a long entanglement. Now, he is quietly extending troop deployments in a sign that the conflict could drag well into next year, according to people familiar with the matter.

It is part of an open-ended military strategy designed to give President Trump options in the war, the people said. But the deployment of 19 warships, air-defense units, fighter squadrons and paratroopers across the region is straining servicemembers and their families and creating a maintenance backlog that could take years to unwind, the people said.

Chinese Warships Are Cruising Too Close for Comfort Off Japan's Shores

SETOUCHI, Japan-The Chinese warships that sail close to the Japanese island of Amami-Oshima make Naruhito Kamada nervous.

A stocky former sumo wrestler, the mayor of this small city here worries there might be a collision one day in the narrow channel that connects the East China Sea with the Pacific Ocean.

Tech CEOs, Trump Administration Ask G-20 to Adopt Pro-AI Policies

CHAPEL HILL, N.C.-Tech executives and Trump administration officials urged policymakers from other leading economies to minimize artificial-intelligence regulations, arguing that strict rules could strangle an industry capable of supercharging global growth and curing diseases.

Nvidia Chief Executive Jensen Huang, OpenAI's Sam Altman, Meta Platforms CEO Mark Zuckerberg and Elon Musk of Tesla and SpaceX were among the speakers at a Group of 20 summit focused on innovation and technology, and they cautioned that aggressive regulations could limit the benefits of AI.

Ted Cruz Is Testing the Waters for a 2028 Run-and Taking Swipes at JD Vance

CLIVE, Iowa-Ted Cruz isn't hiding his presidential ambitions-and he is taking some digs at the presumptive front-runner along the way.

The 2028 contest hasn't started yet, and there is still a midterm election in November. Vice President JD Vance, who is leading in early polls of potential Republican nominees, is campaigning for candidates in tough races and fundraising for the party.

Write to priscila.barrera@wsj.com

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September 03, 2026 05:18 ET (09:18 GMT)