EMEA Morning Briefing: Bond Yields March Higher

MARKET WRAPS

Watch For:

EU retail trade; Germany manufacturing orders; France industrial production index; trading updates from Repsol, Norwegian Air Shuttle

Opening Call:

European stock futures traded higher early Tuesday in tandem with gains in Asian stock benchmarks; the U.S. dollar and Treasury yields edged higher; oil futures gained and gold was flat.

Equities:

Stock futures in Europe were tracking higher as investors weighed elevated global bond yields and overnight Wall Street gains.

"Investors remain wary of calling a top in yields after a steady march higher from mid-August as the U.S. economy expands amid booming [artificial-intelligence] infrastructure spending," said Ryan Felsman at the Commonwealth Bank of Australia.

The bond sell-off hasn't dampened exuberance surrounding strong earnings expectations and the AI boom in equities markets.

The third-quarter earnings season begins in the U.S. next week. If large-cap technology companies can continue to deliver strong growth, earnings may remain the market's best defense against elevated bond yields, said James Ooi, market strategist at Tiger Brokers.

Forex:

The U.S. dollar edged higher. Market participants will focus on U.S. data, including August trade figures due later in the day, UOB's Global Economics and markets research team said.

The reading will offer further clues on the U.S. economy's health. Investors will also keep a close watch on commentary from Fed officials, with markets looking for any new signals on the interest-rate outlook, UOB said.

A sell-off in the euro is also supporting the greenback. Markets are fretting about France's financial health, after new figures last week highlighted its ballooning public debt.

Bonds:

Political risk in Spain after snap elections were called could add to selling in eurozone government-bond markets, prompted by concerns over France's indebtedness and fragmented politics, said Aberdeen's Lizzy Galbraith.

"Spain has not been the epicentre of this episode, but its cost of borrowing has started to rise in sympathy with sharper moves in France and Italy."

Spain's comparatively favorable debt dynamics leave its bond markets less exposed than France or Italy, however, Galbraith says.

Energy:

Oil futures gained. Brent crude oil futures remain above the psychologically important $100-a-barrel level even though ship-tracking data show a significant uptick in Middle Eastern oil exports close to prewar levels, said Commonwealth Bank of Australia's Vivek Dhar.

The rise in Middle Eastern exports, lower Chinese imports and non-OPEC+ oil supply growth should see oversupplied conditions in crude oil markets. Still, the market's hesitation to price in oversupply seems justifiable, as it likely considers the current upswing in Middle East exports to be unsustainable, he added.

Metals:

Gold was unchanged. The 10-year Treasury yield touched another fresh high overnight, increasing the opportunity cost of holding non-interest-bearing metals. However, that relationship can change when the risks behind those yields become more important than the income they offer, said GivTrade's Hassan Fawaz.

If a cycle of higher refinancing costs and insufficient fiscal adjustment undermines investor confidence, gold could benefit as an asset that doesn't depend on a government's repayment promise.

Copper rose. The base metals sector is being supported by the U.S. technology-stock rally and supply concerns, ANZ Research analysts said. Copper is a major beneficiary of the artificial-intelligence investment boom, given the amount of metal used in data centers and electricity infrastructure. There are also continuing supply-side issues, including lower copper production in Chile in August, they added.

TODAY'S TOP HEADLINES

Oil Is Flowing From Hormuz Again-Just Not the Kind the World Needs Most

Ships are ferrying almost as much crude oil out of the Strait of Hormuz as they were before the Iran war. But they are barely moving any barrels of the fuel the world needs most: diesel.

For now, the distinction is paramount in American politics. President Trump's team has explored a long list of options to arrest the skyrocketing price of diesel fuel, which factors into the cost of groceries, gadgets and just about everything else moved on semitruck beds.

France's Appetite for 'Magic Money' Has Turned Into a Debt Bomb

France is on the precipice of a dangerous financial spiral.

The global surge in interest rates has exposed the country, once considered an oasis of relative stability in Europe's financial markets, as one of the continent's weakest links. France now pays more to borrow than former crisis hot spots like Greece and Italy. Its government is running a budget deficit surpassed only by the United States among its peers.

Germany and France Are Proposing a New Weapon to Counter Flood of Chinese Goods

Germany and France are proposing a new weapon for Europe to fight back against a flood of cheap Chinese imports, setting the stage for a confrontation with Beijing.

The countries, ahead of a European Union leaders' summit next week, are proposing that the bloc lower its bar for blocking Chinese products and allow the bloc to move faster on such actions. With this new power, the EU could potentially bar Beijing from one of its last major high-income markets in the world within days of the decision being taken.

L'Oréal Taps Advisers to Explore Unloading Chemical-Related Liabilities

L'Oréal has engaged restructuring advisers to explore options for mounting U.S. legal liabilities stemming from its use of talc and other chemical ingredients in some of its cosmetic products, according to people familiar with the matter.

L'Oréal's U.S. subsidiary is working with restructuring counsel Weil Gotshal & Manges and investment bank Ducera Partners to address mass lawsuits from individuals alleging that the talc products have caused illness, the people said. L'Oréal is also among a group of beauty-products companies facing allegations that hair-relaxing products caused users to develop cancer.

NYC Lawmakers Grill AI Executives and Former Employees as City Weighs Guardrails

The former Anthropic researcher whose resignation last month set off fears about artificial intelligence's threat to humanity repeated his warnings at a hearing Monday with New York City lawmakers, who are weighing a spate of bills to rein in the rapidly advancing technology.

"On the current path, I think it is more likely than not that humanity loses control to AI, and it could end in human extinction," Jacob Coxon said at the hearing in downtown Manhattan. "The companies are being extremely reckless."

Write to singaporeeditors@dowjones.com

Expected Major Events for Tuesday 05:45/SWI: Sep Unemployment

06:00/ROM: Aug Retail trade

06:00/DEN: Aug Industrial production & new orders

06:00/GER: Aug Manufacturing orders

06:00/GER: Aug Manufacturing turnover

06:30/HUN: Aug Retail Sales

06:30/HUN: Aug Preliminary Industrial Production

06:45/FRA: Aug Industrial production index

07:00/SPN: Aug Industrial Production

07:00/SVK: Aug Internal trade, incl Wholesale & Retail

07:00/AUT: Sep Wholesale Price Index

08:30/UK: Sep S&P Global UK Construction PMI

09:00/CYP: Sep Registered Unemployed

09:00/EU: Aug Retail trade

10:00/FRA: Aug OECD CPI

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(END) Dow Jones Newswires

October 06, 2026 00:15 ET (04:15 GMT)