European stocks are opening lower across the board to start the session:
- Eurostoxx -0.7%
- Germany DAX -0.8%
- France CAC 40 -0.6%
- UK FTSE -0.4%
- Spain IBEX -0.4%
- Italy FTSE MIB -0.5%
The softer open stands in contrast to another record-setting session on Wall Street yesterday, with the S&P 500 and Nasdaq both pushing to fresh highs. However, that momentum isn’t carrying through to trading today with Asian and now European investors showing a similarly more cautious tone this morning.
One of the factors keeping risk appetite in check is oil prices. Brent crude is trading back above $100 as markets weigh fresh Houthi attacks on Saudi Arabia alongside potential supply disruption from a storm approaching the Gulf of Mexico.
That is helping to keep the inflation angle firmly in view as bond yields continue to sit at rather uncomfortable levels for equities. 10-year Treasury yields are pushing back above 5.30% today, threatening another run at multi-decade highs.
There is at least some relief coming from France, where government bond yields have eased after Marine Le Pen pledged spending cuts. However, the respite is proving to be brief as 10-year French bond yields have rebounded to 4.83% today from a low of 4.70% yesterday.
Besides that, US futures are little changed for now and that is leaving the broader market mood fairly tentative. S&P 500 futures are flat while Nasdaq futures are down by just 0.1%.
The focus and attention now turns to the $39 billion US 10-year Treasury auction and the Fed’s September meeting minutes later today – both of which could put rates back at the centre of the market conversation.
This article was written by Justin Low at investinglive.com.