European Midday Briefing: Shares Edge Up as ECB Announces Lagarde's Early Exit

MARKET WRAPS

Stocks:

European shares were mostly up Thursday ahead of the European Central Bank interest rate decision.

The ECB is expected to follow the Federal Reserve's move to keep policy rates on hold, even though higher energy costs remain a worry for policymakers.

The decision will come after ECB President Christine Lagarde said on Thursday that she would step down in February 2027.

"That she leaves early is no surprise and does not change the outlook for ECB policies and for the way the ECB deals with French risks," Berenberg said.

The market prices a 86% chance that the ECB will leave rates unchanged and a 70% chance of a move in December.

"We expect a pause this week, especially given the growing risks to economic activity," Neuberger said. Another rate hike in December is likely if the price of gas remains above the level defined in the ECB adverse scenario.

With the ECB expected to leave the deposit rate at 2.50%, Generali Investments said markets will focus on what Lagarde says about tightening financing conditions and the recent widening of the OAT-Bund yield spread.

Meanwhile, technology stocks slid across the globe after earnings from major tech names in the U.S. and Asia reignited worries about how companies can make money from artificial intelligence.

U.S. Markets:

Stock futures were lower as investors were digesting a host of earnings results from Big Tech.

Later today, investors will be watching out for Amazon and Intel quarterly earnings, both scheduled after the closing bell.

Forex:

The euro fell. French fiscal and political uncertainty remains a headwind for the euro ahead of the ECB's policy decision later, DHF Capital said.

The dollar edged higher as investors digested Wednesday's Fed interest rate decision. Sterling's outlook remains positive after U.K. Treasury chief John Healey delivered broadly neutral and widely-anticipated fiscal measures in Wednesday's budget, UBS Global Wealth Management said.

Bonds:

Treasury yields and European government bond yields fell. The Fed left interest rates unchanged, as expected, while the ECB is also set to hold rates, leaving markets focused on when borrowing costs are likely to rise again.

Energy:

Oil prices fell as traders assessed fresh U.S. efforts to revive peace negotiations with Iran against persistent Middle East supply risks and the possibility of renewed military escalation.

Gas

European natural-gas prices retreated after breaking above 100 euros a megawatt-hour in the previous trading session, but remained at their highest level since 2022.

Metals:

Gold prices fell in early trading as investors digest the Fed's policy meeting while waiting for the release of U.S. inflation data later on Thursday.

The precious metal could trade around $5,000 to $5,500 next year Saxo said. In the longer term, gold could rise even higher as central banks haven't finished accumulating the precious metal, which will take some time.

Copper

Copper price may continue to benefit from China's AI development, according to BofA Securities. Copper use in China data centers is likely to rise as the countrycontinues to increase investment in artificial intelligence.

EMEA HEADLINES

Christine Lagarde to Resign Early as ECB President

Christine Lagarde will step down as president of the European Central Bank, vacating one of the continent's top jobs at a time when debt problems and resurgent inflation are looming over the economy.

Lagarde said in a statement Thursday that she would resign in February.

Shell to Launch $5 Billion Share Buyback After Earnings Soar

Shell hiked its quarterly share buyback to $5 billion after earnings doubled and cash flow soared, driven by elevated oil and gas prices caused by the Middle East conflict and exceptional refining margins amid a historic fuel squeeze.

The British energy major's third-quarter adjusted earnings-a closely watched metric that strips out certain commodity price adjustments and one-time charges-nearly doubled to $10.81 billion from the $5.43 billion it reported in the same period last year. Analysts had expected $10.33 billion, according to estimates compiled by Vara Research.

Volkswagen Presses Ahead With Restructuring as Headwinds Mount

Volkswagen backed full-year guidance that was cut last month, but said it must move fast to implement restructuring plans as it continued to face multiple headwinds.

The German automaker slashed earnings guidance in September after flagging around 10 billion euros ($11.15 billion) of impairment charges this year linked to its stake in Porsche, tough trading in China and its restructuring efforts.

TotalEnergies Profit Surges on High Energy Prices

TotalEnergies reported a surge in third-quarter net profit, as the French energy major got a boost from high energy prices and refining margins.

Net profit for the quarter was $8.26 billion, compared with $3.68 billion for the same period last year, TotalEnergies said Thursday.

GLOBAL NEWS

Oil Is Gushing Out of the Gulf. Why Are Prices Still Above $100 a Barrel?

Oil exports from the Persian Gulf have rebounded significantly, at times returning to and even surpassing their prewar volumes. But prices for the global benchmark Brent have once again climbed to around $110 a barrel, a level last seen in late April when exports were about half of what they are now.

The price rally reflects fears of renewed escalation, dwindling oil stockpiles and a makeshift shipping system that remains dangerous and expensive to operate, according to traders and analysts.

ECB Set to Follow the Fed as French Bonds Panic Outweighs Inflation Fears

The Federal Reserve just held interest rates steady-and the European Central Bank is likely to follow suit, even though higher energy costs remain a worry for policymakers.

The ECB is widely expected to keep its key deposit rate unchanged at 2.5% on Thursday. It hiked borrowing costs by a quarter-point in September, citing the run-up in oil and natural-gas prices.

U.S. Treasury, European Bond Yields Fall After Fed Decision, Ahead of ECB Meeting

U.S. Treasury yields and European government bond yields fell in European morning trade on Thursday as markets digested the Federal Reserve's interest-rate decision, with focus now shifting to the European Central Bank's meeting.

The Fed left interest rates unchanged, as expected, while the ECB is also set to hold rates, leaving markets focused on when borrowing costs are likely to rise again.

See the Trump Administration Stock Portfolio That Spans More Than 40 Companies

A slew of quantum-computing investments. A 35% stake in a firm vying for Venezuelan oil. Four equity deals in semiconductors and energy announced last week.

The Trump administration is snapping up stakes in private companies at an unprecedented pace. Since the start of President Trump's second term, the U.S. government has announced 43 deals involving stock ownership or warrants that may be swapped for equity at a later date.

As Missile Stockpiles Dwindle and China Looms, U.S. Turns to Japan for Production

The U.S. and its allies have used thousands of missiles in conflicts in Ukraine and the Middle East. Now Washington is turning to one of its closest friends in Asia to help build more of them.

The U.S. and Japan agreed on Wednesday to establish a facility in Japan for the final assembly and inspection of Advanced Medium-Range Air-to-Air Missiles, Amraam, a key armament for F-35 jet fighters. The two nations also agreed to share technical information to help increase production of SM-3 missiles, which are typically fired by ships to destroy incoming ballistic missiles.

The Hispanic Voters Who Turned on Trump and Put Texas in Play

WESLACO, Texas-Abad Morales, who owns a construction company here in South Texas, was swayed by President Trump's 2024 campaign question: "Are you better off today than you were four years ago?"

Two years later, he is asking himself the same question-and now, he says, life has only gotten worse.

U.S. Expels Cuban Diplomat After Extraordinary U.N. Verbal Clash

The U.S. expelled a Cuban diplomat after the island country's foreign minister loudly interrupted an address by U.S. Ambassador to the United Nations Mike Waltz criticizing Havana's leadership, and the two shouted at one another in an extraordinary exchange at the world body's famous rostrum.

The heated ​words and a battle over a cellphone unfolded Tuesday on the U.N. General Assembly floor during an annual debate about the U.S. economic embargo of Cuba, as Waltz laid out familiar American allegations that the Havana regime has enriched itself as it impoverished the population.

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(END) Dow Jones Newswires

October 29, 2026 07:16 ET (11:16 GMT)