European Midday Briefing: Shares Rise as Oil Eases After Russian Diesel Deal

MARKET WRAPS

Stocks:

European shares kicked off the week in the green while oil prices eased.

Shares in the financial and utilities sectors gained while semiconductor companies were mixed following a selloff in South Korean stocks exposed to artificial intelligence.

Oil prices fell after President Trump said his administration reached an agreement for Russia to supply large amounts of diesel to the U.S. and global markets.

The prospective Russian diesel exports could provide some relief to a market facing fuel shortages, though their impact will depend on Ukraine's continued attacks on Russian oil infrastructure, Commonwealth Bank of Australia said.

Meanwhile, concerns about fiscal problems in France linger. "Focus will continue to be on developments in France with parliament set to start debating the revenue side of the budget this week," said Danske Bank.

Looking ahead, final consumer-price inflation data for September are due in the coming week. Figures for Germany are due Tuesday, followed by Spain Wednesday, France on Thursday, then Italy and the eurozone as a whole on Friday.

U.S. Markets:

Stock futures were up Monday ahead of Wall Street banks starting off the third-quarter earnings season on Tuesday.

Investors are also awaiting U.S. inflation data on Wednesday for clues on future interest-rate decisions.

Forex:

The euro was firm. The currency remained vulnerable to renewed losses due to ongoing French fiscal risks, ING said. The dollar traded steady as investors weighed President Trump's announcement of a Russia-Ukraine energy ceasefire against attacks in Saudi Arabia. Bonds:

Eurozone government bond yields fell in opening trade as oil prices were marginally lower. There is no impulse from Treasurys as the Treasury market is closed due to Columbus Day. Higher yields create a better starting point for bonds, but yields are higher for legitimate reasons, with potentially further to go, Madison Investments said.

Jefferies said that for long-term investors, a 5% yield on five-year Treasurys is a very attractive level to buy. Capital Economics said Treasury yields were expected to fall further, although the inflation picture and the Federal Reserve may be stiff near-term headwinds. Energy:

December Brent crude futures fell 0.2%, while December West Texas Intermediate futures dropped 0.4%.

However, a more meaningful decline in refined product prices will require normalized conditions in the Middle East, according to ING. "Not just in the amount of oil flowing from the Persian Gulf, but also in the way this oil is coming out."

Goldman Sachs raised its Brent crude forecast for December to $90 a barrel from $85, warning that persistent supply risks could keep oil prices elevated even as producers in the Persian Gulf adapt to disruptions.

Metals:

Gold prices edged lower as investors awaited a series of U.S. economic releases this week for fresh signals on the outlook for interest rates and inflation.

Copper

Copper prices rose above $14,600 a metric ton on the London Metal Exchange in early European trading, extending monthly gains on hopes of stronger Chinese demand and concerns over supply disruptions.

Iron

Iron ore prices were flat as steel mills struggled with low profitability. With 90% of Chinese steel mills operating at a loss, they remain cautious about iron ore procurement and keep inventories low, Tongguan Jinyuan Futures said.

EMEA HEADLINES

U.K. Government Faces Test of Budget Credibility

The U.K. government presents its annual budget later this month, but may find it difficult to reassure bond investors that it can lower its debts even if an independent watchdog judges that it remains on track to stick to its self-imposed rules.

The path to bringing borrowing down already requires tight limits on spending toward the end of this decade. But the jump in energy prices since the start of the war between the U.S. and Iran has increased the cost of providing public services, so the current spending allocations won't do as much as intended.

Trump Pushes Russia-Ukraine Energy Ceasefire as Export Deal Draws Criticism

President Trump pushed Russia and Ukraine to agree to halt strikes on each other's energy infrastructure, as the White House continued to face bipartisan criticism over moves in recent days to ease U.S. pressure on Moscow and shift blame for the continued fighting to Kyiv.

"Effective immediately, there is an ENERGY CEASEFIRE in the War between Russia and Ukraine. Both parties have agreed," Trump posted on Truth Social on Sunday, despite Moscow's rejection of such a deal so far and no sign that there was an agreement in place.

Iran-Backed Militants Are Tightening the Screws on Saudi Arabia's Crown Prince

DUBAI-Saudi Crown Prince Mohammed bin Salman started the year on a high note. He had just visited the White House where he was embraced by President Trump. Even after the war with Iran kicked off, Saudi Arabia looked relatively well positioned. It could export oil through a pipeline that bypassed the blocked Strait of Hormuz.

But the Saudis' escalating fight with Iran-backed Houthi militants in neighboring Yemen now poses new challenges to the kingdom's security and the crown prince's ambitious but already struggling plans to transform the country's oil-dependent economy.

Volkswagen Vehicle Deliveries Fall on Continued China Weakness

Volkswagen Group vehicle deliveries fell in the third quarter as the German automaker continued to suffer from a deteriorating market in China.

The company, which houses a stable of brands that includes VW, Audi and Porsche, said Monday that group vehicle deliveries fell 14% on year to 1.89 million.

GLOBAL NEWS

Oil Prices Fall as Traders Weigh Russian Diesel Deal, Middle East Supply Risks

Oil prices fell Monday as traders weighed prospects for increased Russian diesel supplies and a potential Russia-Ukraine energy ceasefire against persistent Middle East supply risks.

December Brent crude futures fell 0.2% to $104.53 a barrel, while December West Texas Intermediate futures dropped 0.4% to $90.69 a barrel.

Trump Pushes Russia-Ukraine Energy Ceasefire as Export Deal Draws Criticism

President Trump pushed Russia and Ukraine to agree to halt strikes on each other's energy infrastructure, as the White House continued to face bipartisan criticism over moves in recent days to ease U.S. pressure on Moscow and shift blame for the continued fighting to Kyiv.

"Effective immediately, there is an ENERGY CEASEFIRE in the War between Russia and Ukraine. Both parties have agreed," Trump posted on Truth Social on Sunday, despite Moscow's rejection of such a deal so far and no sign that there was an agreement in place.

China's Auto Sales Fall Despite Traditional Peak Season

China's monthly auto sales weakened yet again in September, with the traditional peak season failing to bring cheer.

Retail sales of passenger cars fell 28.0% in September from a year earlier to 1.62 million units, the China Passenger Car Association said Monday. Sales rose 5.0% compared with August.

Judge Says Pro-Trump Ads Funded by Taxpayers Must Be Taken Off Air

A federal judge ordered the Trump administration to halt any further airing of taxpayer-funded television ads touting the president, ruling they are likely illegal.

U.S. District Judge Jennifer Rochon in New York issued a four-page order late Sunday that barred the administration from using government funds to distribute the ads. The judge, who was appointed by former President Joe Biden, said the administration must cancel "any slot, placement, reservation, or arrangement for the airing or dissemination of the challenged advertisements."

Iran-Backed Militants Are Tightening the Screws on Saudi Arabia's Crown Prince

DUBAI-Saudi Crown Prince Mohammed bin Salman started the year on a high note. He had just visited the White House where he was embraced by President Trump. Even after the war with Iran kicked off, Saudi Arabia looked relatively well positioned. It could export oil through a pipeline that bypassed the blocked Strait of Hormuz.

But the Saudis' escalating fight with Iran-backed Houthi militants in neighboring Yemen now poses new challenges to the kingdom's security and the crown prince's ambitious but already struggling plans to transform the country's oil-dependent economy.

Trump Pushes Russia-Ukraine Energy Ceasefire as Export Deal Draws Criticism

President Trump pushed Russia and Ukraine to agree to halt strikes on each other's energy infrastructure, as the White House continued to face bipartisan criticism over moves in recent days to ease U.S. pressure on Moscow and shift blame for the continued fighting to Kyiv.

"Effective immediately, there is an ENERGY CEASEFIRE in the War between Russia and Ukraine. Both parties have agreed," Trump posted on Truth Social on Sunday, despite Moscow's rejection of such a deal so far and no sign that there was an agreement in place.

The Welfare State Is Crushing Britain

LIVERPOOL-Catherine Wieland got on Britain's welfare rolls in 2021. With a history of emotional trauma, she was too anxious to go outside or carry out simple tasks like washing herself, she told the government.

Soon, she was receiving about GBP700, or $1,000, a month in disability benefits. And, it turns out, going outside quite a bit.

Write to priscila.barrera@wsj.com

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This article is a text version of a Wall Street Journal newsletter published earlier today.

(END) Dow Jones Newswires

October 12, 2026 05:13 ET (09:13 GMT)