Market News

IC – Europe Fundamental Forecast | 09 October 2026

What happened in the Asia session?

Friday is being driven by rising oil prices, inflation concerns, and weaker market sentiment. Middle East tensions are supporting oil prices, while high bond yields and concerns about the technology sector are weighing on Asian stocks. The Bank of Japan’s warning about wider inflation pressures is also keeping the yen and Japanese interest-rate expectations in focus.

What does it mean for the European & US sessions?

Today’s market focus is on oil prices, U.S. interest-rate expectations, and continued weakness in the euro. Lower oil prices amid possible U.S.–Iran talks could ease inflation concerns, but supply disruptions may push prices higher again.…

European stocks are enjoying a solid rebound at the open today, with the retreat in bond yields offering some respite for equities as we head into the final stretch of the week. The positive start also reflects a bit of catching up to Wall Street, after US stocks managed to pare some of their losses late in yesterday's session. That came well after European markets had closed, with major indices in the region seeing red.

To start the day, the gains are rather convincing across the board as seen below:

• Eurostoxx +0.8%
• Germany DAX +0.9%
• France CAC 40 +0.9%
• UK FTSE +0.8%
• Spain IBEX +0.9%
• Italy FTSE MIB +0.9%

The pullback in bond yields is helping to ease some of the pressure on equities for now, after the relentless rise in borrowing costs earlier…

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Remember the days when oil prices were just something you needed to worry about whenever you stopped at a petrol station? These days, the sad reality is that the impact goes well beyond the fuel pump. Whether it be your next holiday or even your weekly grocery run, oil prices have a way of showing up where you least expect them to.

Just think about it this way. When oil prices surge higher, airlines will then have to pay more for jet fuel. And if those costs keep climbing, some of that could eventually find its way into your airfare.

It is the same for groceries as well. Higher transportation costs mean businesses will need to spend more in order to get products onto supermarket shelves. And guess who has to end up footing the bill in this…

FUNDAMENTAL OVERVIEW

Gold erased its weekly losses after Trump said on Truth Social yesterday that the US was having productive discussions with Tehran and would not attack Iran before the midterm elections.

Markets reacted immediately, unwinding the escalation premium that had accumulated following earlier reports that Trump was weighing military strikes against Iran ahead of the midterms. Oil prices, real yields and the US dollar all fell after Trump's post, triggering a rally in gold.

Looking ahead, Iranian Foreign Minister Araghchi said yesterday that Tehran was reviewing Washington's response to Iran's proposal and expected to reply within the next few days. A positive…

The deal turns SpaceX from a wholesale satellite partner into a credible direct rival to US wireless carriers, and early reports pointed to telecom shares falling on the news. AST SpaceMobile is the clearest loser, having openly pursued the same licences, and its shares are exposed to a reassessment of its spectrum position. Low-band coverage was the main technical weakness in a satellite-plus-ground offering, so its arrival raises the competitive threat to incumbents’ rural and indoor coverage advantage. FCC approval remains the key gate for the spectrum deal and timing risk for investors.

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SpaceX has secured the low-band spectrum it needed to reach phones indoors, and won approval for a much larger direct-to-phone fleet, putting it on…

Coming up later today, we'll have the University of Michigan consumer sentiment survey at 1400 GMT. And while the headline estimate will offer some insight into how US consumers are feeling about the economy, I reckon the standout figure will be the inflation expectations figures.

As a reminder, year-ahead inflation expectations jumped to 4.6% in September from 4.0% in the month before. Meanwhile, the five-year outlook edged higher to 3.4% in September from 3.3%.

So, what should traders be looking out for this time?

With oil prices having surged again recently, the first thing to watch is whether short-term inflation expectations continue to rise. Having said that, do also pay attention to the long-term reading as another jump there could…

There are a couple of key expiry levels to take note of on the day, as highlighted in bold below.

The first ones are for EUR/USD with the expiries at 1.1200 and 1.1250, sandwiching the current spot price near 1.1230. Given the size and potential for the expiries to act as near-term magnets, especially if price action is rather subdued, then that could very well contain movement in the currency pair to between the 1.1200 to 1.1250 region in the session ahead.

Dollar sentiment will of course continue to be a key driver on its own though, influenced by what is happening in the bond market. Treasury yields retreated yesterday and that saw the dollar pull back slightly on the week, with EUR/USD finding some conviction to push back above 1.1200.

Ah, here we go again. Just when you think that the bond market is finally starting to hold governments accountable for their fiscal decisions, along comes the ECB with a reminder to everyone that it has tools to come to the rescue. How convenient.

ECB president Lagarde remarked yesterday that the central bank has the necessary tools to counter "unwarranted" market dynamics, in what surely is a reference to the ongoing turmoil in European bond markets.

Now, I don't have a problem with the ECB stepping in when markets genuinely become dysfunctional. However, there is one thing that really bothers me about her statement. What exactly constitutes to an "unwarranted" market move in this particular case?

Well, it is not difficult to draw a…

Gold is finally catching a bit of a break after much pushing and pulling in the past week, with the precious metal finding some respite as Treasury yields retreat from their recent highs.

The bounce started from overnight trading before gaining further momentum today, with price now pushing back up towards $4,180. The latest pullback in Treasury yields is helping to ease some of the pressure on gold, especially after the relentless surge in yields in earlier in the week. 10-year Treasury yields have retreated to 5.23%, down from multi-decade highs around 5.36%, providing some breathing room for the non-yielding precious metal.

From a technical perspective, there are some encouraging signs for buyers.

Looking at the hourly chart, gold has…

Record crack spreads show that refined products, not crude, are where the tightest supply squeeze sits, with diesel leading. That keeps upward pressure on fuel costs for consumers and businesses, feeding the inflation concerns that are holding up Treasury yields and Fed hike expectations. For oil markets, strong refinery margins encourage maximum crude runs, which supports demand for crude itself, particularly US grades. Refiner shares already at highs leave the sector exposed to any de-escalation in the Iran conflict or a reopening of Hormuz, either of which could compress margins quickly.

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War has been terrible for fuel buyers and very good for the people who make fuel, and US refiners’ third-quarter numbers are about to show exactly how…