EMEA Morning Briefing: AI Profit Doubts Resurface

MARKET WRAPS

Watch For:

No major economic events expected; trading update for OMV

Opening Call:

European stock futures were higher after Asia stocks were mixed. U.S. Treasurys were flat, the dollar weakened. Gold rose and oil fell.

Equities:

European equity futures rose amid doubts regarding artificial-intelligence profits resurfaced. Stocks were mixed in the U.S. while bonds were volatile.

One strategist said the turmoil in sovereign-bond markets could cause widespread ripple effects because much of the AI-driven economic expansion is fuelled by credit.

"Credit spreads are widening around the world, so the cost of capital is rising on two fronts: the risk-free rate is going up, and the spread on top of it is going up too," said Lorenzo Di Mattia, founder and chief investment officer at hedge fund firm Sibilla Capital.

"Most sectors not tied to AI have already started to go down, particularly cyclical and rate-sensitive ones, but not only those."

Forex:

The U.S. dollar weakened ahead of U.S. data.

Markets are focused on data including the University of Michigan's preliminary consumer sentiment index, UOB Global Economics & Markets Research said.

The print will be closed watched for insights into household confidence, inflation expectations and consumer-spending resilience, it added.

Investors will also continue monitoring developments in the Treasury market after this week's sharp rise in long-dated yields, and any further commentary from Federal Reserve officials for clues on the policy outlook, UOB wrote.

Bonds:

The yield on U.S. Treasurys were flat. Since January, yields on France's 10-year sovereigns have risen by more than that of any other G-7 country, from 3.5% to around 4.90% today, noted Desmond Lachman, a senior fellow at the American Enterprise Institute.

That is the 10-year's highest yield since 2002 and roughly 140 basis points above the German equivalent-the widest spread between those sovereigns since the 2010 euro zone crisis, Lachman said.

Today, France has $4 trillion in public debt, roughly eight times Greece's 2010 debt in today's prices.

"It is teetering on the cusp of a full-blown debt crisis, which would not only roil markets, but also draw sharp attention to other countries' unsustainable debt paths, including the U.S., Japan, Italy, and the U.K.," Lachman said.

Energy:

Oil prices fell but prices remain elevated.

Oil prices are likely to remain at high levels and could rise in the short term, said Hani Abuagla, senior market analyst at XTB MENA.

There are risks to Middle Eastern shipping routes from the conflict, while U.S. production faces constraint as platform shutdowns ahead of a storm curtail around a quarter of Gulf of Mexico production, Abuagla added.

Metals:

Gold prices were higher. The structural drivers behind the gold bull cycle seem intact, State Street Investment Management strategists said.

These drivers include record government debt, robust physical demand from central banks and the Chinese retail sector and heightened geopolitical and economic uncertainty.

Higher rates can exacerbate debt service costs and fiscal imbalances for major economies, they said.

Copper regained some momentum after falling overnight.

Both rising energy prices and a selloff on the tech-heavy Nasdaq exchange overnight have weighed on investors' risk appetite, ANZ Research analysts said.

However, copper is still near its record levels, supported by supply constraints, as workers at Chile's Centinela mine are on strike, they noted.

Copper has also found some support, with Chinese traders returning from a weeklong holiday in a buoyant mood, the analysts said.

TODAY'S TOP HEADLINES

Iran and Houthis Try to Regain Upper Hand in Hormuz With Spate of New Attacks

DUBAI-Just last week, Iran appeared to have its back against the wall in its war with the U.S., its ports blockaded and its leverage over the Strait of Hormuz slipping. Now, Tehran is trying to regain the upper hand.

Iran and its Houthi allies in Yemen delivered a one-two punch against Persian Gulf oil producers in separate attacks on Wednesday night and Thursday morning that sent oil prices sharply higher and further shattered the sense of security in Saudi Arabia's capital city.

In Spain, Grief and Politics Mix After Death of Evicted Woman

MADRID-Hours after the death of an elderly woman known as Maricarmen in Madrid, the political jockeying over her legacy had already begun.

María del Carmen Abascal, 87, died in a hospital two weeks after she was forcibly evicted from a flat where she had lived for decades. Televised scenes of her being carried away from the flat on a stretcher sparked nationwide protests against Spain's housing crisis.

Nvidia-Backed Firmus Scraps Australian IPO, Citing Market Conditions

SYDNEY-Nvidia-backed cloud-computing company Firmus Grid scrapped plans for what would have been Australia's largest initial public offering in almost 30 years, citing market conditions.

The seven-year-old company, which had been looking to raise almost US$5 billion at a market capitalization of more than US$30 billion, said Friday that it withdrew its application to list on the Australian Securities Exchange due to "recent market volatility and prevailing market conditions".

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Expected Major Events for Friday 00:00/UKR: Sep CPI

04:30/NED: Aug Manufacturing output

06:00/DEN: Aug Balance of payments (provisional figures)

06:00/DEN: Aug External trade (provisional figures)

06:00/NOR: Sep PPI

06:00/SWE: Aug New orders & deliveries in industry

06:00/SWE: Aug Industrial Production Index

06:00/NOR: Sep CPI

07:00/SVK: Aug Foreign trade

07:00/TUR: Aug Industrial Production Index

07:00/AUT: Aug Production Index

07:00/SVK: Aug Industrial production

07:00/SWI: Sep Consumer Sentiment Index

09:00/CRO: Aug Foreign Trade

09:00/MLT: Aug Industrial Production Index

09:00/GRE: Sep CPI

09:00/GRE: Aug Industrial Production Index

09:00/LUX: Aug Industrial Production

10:00/IRL: Aug Industrial Production and Turnover

10:00/POR: Aug International trade statistics

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(END) Dow Jones Newswires

October 09, 2026 00:16 ET (04:16 GMT)