EMEA Morning Briefing: Treasury Yields Maintain Uptrend

MARKET WRAPS

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Germany foreign trade; trading updates from Tesco, Imperial Brands

Opening Call:

European stock futures edged lower early Thursday mirroring declines in Asian stock benchmarks; the dollar and Treasury yields edged higher; oil futures and gold gained.

Equities:

Stock futures point to a lower open in Europe amid tensions in the Middle East and fears of a fiscal crisis in France.

"The main theme was a modest risk-off tone," Commerzbank Research analysts said. "Lingering fears over a fiscal crisis in France was the dominant driver behind the sell-off in Europe," the analysts added.

Meanwhile, Houthi militants have escalated their conflict with Saudi Arabia, attacking two airports in the kingdom.

"Attacks on vessels in the Middle East continued," ANZ Research analysts said in a research report. "The U.K. Maritime Trade Operations has reported at least nine attacks in the" Strait of Hormuz so far this month, the analysts noted, adding this amount was already half the number recorded for the entire month of September.

The yield on U.S. 10-year Treasurys remained near multidecade high in Asia on Thursday. Higher U.S. Treasury yields alone may not be enough to change the Fed's policy stance, particularly if broader financial conditions remain supportive of growth, Tiger Brokers market strategist James Ooi said.

Forex:

The U.S. dollar strengthened slightly as investors sought cover from risk. The somewhat hotter inflation expectations read from the NY Fed survey alongside a less downbeat jobs outlook underpin views of further Fed tightening, said Vishnu Varathan at Mizuho Securities.

This leaves the dollar in a precarious pole position flattered by a dismal euro and yen, he said, adding that underlying sentiments remain fragile.

Bonds:

The recent selloff in French government bonds reflects both carry-trade unwinds and a growing reassessment of French fiscal risk, said Masahiko Loo at State Street Investment Management.

"The bigger issue is that bond investors are increasingly questioning France's fiscal trajectory," Loo said noting that France has not run a budget surplus since 1974.

While policymakers have signaled their intention to address fiscal challenges, the timeline and details behind the proposed consolidation are likely to face significant implementation hurdles. Volatility is likely to remain elevated into the April-May 2027 presidential election cycle, Loo added.

Energy:

Oil rose amid rising Middle East tensions that could intensify supply-disruption fears. Attacks claimed by Houthi militants damaged two airports in Saudi Arabia. The Houthis have taken a lot of territory in a recent offensive against Saudi-backed Yemeni forces, giving the group more control over the Bab al-Mandeb Strait, a vital chokepoint for global energy market.

"Renewed Houthi attacks in Saudi Arabia as well as storm-related U.S. Gulf production shut-ins" have helped boost oil prices, InTouch Capital Markets' analysts said.

Metals:

Gold gained. ANZ Research analysts said that any losses were likely to be partially offset by strong central-bank buying. The People's Bank of China--among the world's biggest gold buyers--expanded its reserves in September, they noted.

Copper advanced. Reported strike action in Chile is threatening to disrupt supplies of the base metal, ANZ Research said. Output from the Centinela mine will likely be hit within two weeks if the workers' strike continues. "The renewed supply risks add to a market already fretting over shortages triggered by concerns over U.S. stockpiling in anticipation of a levy on imports," it said.

TODAY'S TOP HEADLINES

Trump's Tariffs Put a Spotlight on Forced Labor. It Isn't Going Away.

The Trump administration resurrected its global tariffs by shining a light on forced labor. The tariffs face a court challenge, but the spotlight isn't going away.

After the U.S. Supreme Court in February shot down President Trump's global tariffs-which relied on emergency economic powers-the administration turned to a new theory to partially revive them, accusing America's trade partners of failing to take action against forced labor.

Rising yields are quietly crashing the stock market's earlier winners of 2026

Surging Treasury yields have begun to hammer parts of the stock market that might easily be overlooked, especially with the spotlight once again shining brightly on a small group of glamorous tech companies.

Re-energized enthusiasm for tech helped the S&P 500 SPX this week reclaim the lead over the Russell 2000 RUT for 2026, as small-cap stocks drop toward correction territory under the weight of higher Treasury yields.

Spain's Leader Pins Political Survival on Public Anger Over Housing Crisis

If Spanish Prime Minister Pedro Sánchez still has a shot at staying in power, it is partly because of a woman known as Maricarmen who died on Wednesday.

Sánchez this week called snap elections following nationwide protests over the country's housing crisis. María del Carmen Abascal became the face of that crisis last month, when she was evicted from her flat in Madrid after a court order. Cameras rolled as she was carried away on a stretcher, prompting instant public outrage.

Rogue Pilots Have Become One of the Biggest Threats to Airline Safety

A pilot's suspected attempt to crash a Boeing 737 MAX bound for Israel shows how one of aviation's biggest safety threats is in the cockpit.

As commercial flying has become safer, the death toll from suspected intentional crashes increasingly stands out. At least 800 people worldwide have died since 2005 in airline crashes that have been suspected by U.S. government officials or confirmed to be intentionally caused by pilots, according to accident data.

Oracle, Broadcom and SpaceX Seek Blockbuster Debt Deals to Pay for AI Chips

Big players in artificial intelligence are lining up a series of blockbuster financing deals to pay for computing hardware, part of a rush for capital as data-center build-outs race forward.

In recent weeks, Broadcom has been working to arrange more than $50 billion in financing for OpenAI's custom artificial intelligence chip, which the firms are developing together, according to people familiar with the discussions.

The AI Price War Is Heating Up-and OpenAI Is Gaining Ground on Anthropic

Anthropic edged to the front of the AI race earlier this year with cutting-edge models and a coding tool that corporate America loved. By some measures, OpenAI is now hot on its heels.

Demand for Anthropic's Claude Code was so strong in the spring that the company faced frequent outages and a computing crunch.

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Expected Major Events for Thursday 04:30/NED: Aug Consumer Spending

05:00/FIN: Aug Industrial Production

06:00/FIN: Aug Foreign trade

06:00/GER: Aug Foreign Trade

07:00/CZE: Aug Retail trade

07:00/AUT: Jul Foreign Trade

08:00/CZE: Sep Unemployment data

08:30/UK: 3Q Bank of England Credit Conditions Survey

08:30/UK: 3Q Bank of England Bank Liabilities Survey

09:00/CYP: Sep CPI

09:00/GRE: Aug External Trade (provisional data)

09:00/CRO: Sep PPI

10:00/IRL: Sep CPI

23:01/UK: Sep BRC-Sensormatic IQ Footfall Monitor

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(END) Dow Jones Newswires

October 08, 2026 00:15 ET (04:15 GMT)