European Market Wrap - 14th September 2026

• European and US equity futures pressured on calls to slow down AI development.
• DXY gained alongside US yields as markets increase their bets of rate hikes at the Fed this week.
• Crude benchmarks firmer after Saudi shut a key pipeline and the Iran-Gulf meeting is postponed.

EQUITIES

• European bourses are set to finish mixed with a slight negative bias; only the SMI and FTSE 100 remain the only indices in the green, while the FTSE MIB underperformed. The broad weakness came amid 2 catalysts: 1) higher energy prices following the closure of Saudi pipeline and the postponement of Iran-Gulf talks, and 2) AI leaders pushing for slower development of advanced AI models.
• Sectors lacked a clear bias. Health Care topped the sector pile, with Food, Beverages & Tobacco and Media rounding out the sector gainers. To the downside were Basic Resources, Tech and Construction.
• Main stories included: AstraZeneca (+4.1%), despite its Phase 3 Serena 4 trial did not meet the primary endpoint of PFS in patients with breast cancer; GSK (+5.1%), its Phase 3 ARTEMIS-008 trial met its primary overall survival endpoint in relapsed small-cell lung cancer; Euronext (+2.1%) and Deutsche Boerse (+3.2%), after the Euronext CEO told the FT that they are open to a merger with its German competitor.
• US cash equities opened entirely in the red, with the NDX the laggard. Despite the downside in tech names, particularly Semis, hyperscalers have seen strength. One reason behind this is that that are investors into AI, meaning they spend less into AI and reduce their heavy capex spending.

FX

• G10s were weaker against the broadly stronger USD throughout the London session. The JPY was dragged by widening yield differentials, as traders boosted their rate hike bets ahead of this week’s FOMC announcement. The CHF fared a touch better vs peers, but was still under pressure.
• DXY benefited from increased rate hike bets; a recent Reuters poll showed that 85% of economists expect the Fed to raise rates at the September confab. Also helping the bullish bias was the continued strength in energy prices, which benefited from the shutting of a key Saudi pipeline, and after Iran-Gulf talks were postponed. The index has surged beyond its 200- and 21-DMA, and now eyes its 100-DMA at 99.79.
• JPY was the clear underperformer throughout the session, as yield differentials widened into the Fed and then BoJ meetings this week. USD/JPY bounced off near-term lows, and traded around 154.80, within a 153.37 to 154.90 range. Another bout of strength in the JPY would likely require a more hawkish BoJ than what the markets expect. A 50bps hike remains unlikely, so focus will be on whether or not the Bank points towards a faster pace of rate hikes in the coming months.
• CAD was mildly pressured following the region’s inflation metrics. Headline Y/Y printed in-line with expectations, though Core M/M and Headline M/M was a touch cooler.

FIXED

• Global fixed income benchmarks initially started mixed, with Bunds and Gilts underperforming. As the session progressed, the broader debt space sold off as energy prices continued to climb following an AP report indicating that the Saudi East-West pipeline will be mostly out of service for several weeks.
• USTs (-2+ ticks) topped 106-10+ early in the Asia-Pac session before slipping below the 106-00 handle, resulting in the 10yr reversing at 4.99% as it continues to eye 5.00%. Not much in terms of drivers outside of geopols, with focus being on the Fed meeting on Wednesday, where a hike is more-or-less priced in.
• Bunds (-14 ticks) and Gilts (-30 ticks), similarly, fell and underperformed in comparison to its US peers, given its sensitivity to energy prices. For the latter, focus will be on the UK jobs report pre-market on Tuesday, with inflation data on Wednesday ahead of the BoE policy announcement on Thursday.
• Aon (AON) files to sell USD denominated seven-part bond offering.
• EU to sell EUR-denominated 3yr and 30yr NGEU bonds via syndication.

COMMODITIES

• Crude - WTI Nov and Brent Nov futures extended their gains after gapping higher at the open, initially supported by the postponement of the Iran-Gulf nations meeting and Saudi Arabia shutting its East-West pipeline. Further upside was seen on reports that the IRGC shot down a US drone and after Iranian Foreign Ministry comments, before crude caught another bid after AP reported the crucial Saudi pipeline will remain mostly out of service for several weeks for repairs. Brent rose to a USD 109.80/bbl high from a USD 106.11/bbl low. WTI similarly climbed to a USD 104.95/bbl high from a USD 101.59/bbl low.
• Natural Gas – Dutch TTF strengthened alongside the broader energy complex amid heightened Middle Eastern supply concerns, rising to a EUR 84.50/MWh high from a EUR 81.40/MWh low.
• Precious Metals – Precious metals remained pressured as the USD strengthened amid increased rate hike bets, while higher energy prices added to inflation concerns. Spot gold extended its earlier downside to a USD 4,262.60/oz low from a USD 4,355.34/oz high. Spot silver similarly fell to a USD 62.33/oz low from a USD 64.47/oz high.
• Base Metals - Base metals remained lower amid the downbeat risk tone and stronger USD. COMEX copper extended its downside to a USD 6.32/lb low from a USD 6.41/lb high, while 3M LME copper fell back under USD 14k/t and traded within a USD 13,965.18-14,236/t range.
• ArcelorMittal (MT NA) said it is halting primary steel production Kryvyi Rih plant in Ukraine while damage and repair needs are assessed following a ballistic missile attack on Saturday.
• Rosatom said it has found a solution to operate Hungary’s Paks-2 nuclear project under low river water-level conditions.
• A crucial Saudi oil pipeline hit in strikes will be mostly out of service for several weeks for repairs, reported AP citing officials.
• US Energy Secretary Wright said he expects Saudi Arabia's east-west pipeline to enter service soon. The US will begin refilling the SPR in the coming months.
• Kazakhstan’s oil production dipped 8.4% between Jan-Aug to 61.7mln tonnes, Interfax reported.
• QatarEnergy has reportedly launched a tender to sell crude for October and November loading from Qatari ports inside Hormuz, according to reported.
• US Energy Secretary Wright said there are no plans for Uranium enrichment in Saudi Arabia; trend in 7-day rolling average of oil shipments through Hormuz is rising and will continue to increase. Oil refining capacity is too tight right now.
• Saudi Energy Minister said that they discovered 110mln tons of raw materials containing Uranium concentrations in Medina.
• Indonesia’s Bayan Resources said it declared force majeure after proposed revisions to a subsidiary’s 2026 mining quota were not published.
• CPC blend oil exports reportedly rose 22% M/M in August, as loading operations stabilised, sources suggest.
• Oman’s Sultan will begin state visits to Pakistan and Bangladesh on Wednesday to deepen cooperation and expand collaboration across sectors.
• UK FCA seeks views on whether tokenising gold could improve how it is traded, transferred, pledged and held in UK markets. Consultation deadline set for 23rd October.
• Shell (SHEL LN) exec said around 36mln tonnes of LNG from the Middle East have been lost to date.
• Exxon (XOM) exec said that they see US LNG supply growing to make c. 30% of global LNG supply by 2030.

EUROPEAN DATA

• Swedish CPIF Final (Aug MM) -0.3% vs. Exp. -0.3% (Prev. -0.3%).
• Swedish CPIF Final (Aug YY) 0.7% vs. Exp. 0.7% (Prev. 0.7%).
• Swedish CPI Final (Aug YY) 0.3% vs. Exp. 0.3% (Prev. 0.2%).
• Swedish CPI Final (Aug MM) -0.3% vs. Exp. -0.3% (Prev. -0.3%).

NOTABLE HEADLINES

• Sweden's Centre Party said they are ready to co-operate with Social Democrats.
• Germany’s Economy Ministry said previously strong economic momentum slowed at the start of Q3.

TRADE/TARIFFS

• Germany will reportedly lobby the EU on new China policy, and may seek more tariffs.

CENTRAL BANKS

• ECB's Cipollone releases a text titled: "The future of euro cash: trusted today, designed for tomorrow".
• ECB's Stournaras said timely ECB action could reduce the risk that future large rate hikes cause pain.
• ECB's Schnabel said recent developments in energy prices are 'quite worrying'.
• ECB’s Kazimir said all options will be considered for the next decision, but action will be taken if necessary.
• ECB's Simkus said he cannot exclude action at any meeting, adding that December is a natural time to assess the situation more.
• ECB's Kazaks said the case is building for more tightening and the ECB can afford to act stepwise without rushing.
• Citigroup expects BoE to hike 25bps in Q4 2026 and a further 25bp in Q1 2027 (prev. saw rates on hold until Q2 27).
• Goldman Sachs expects the BoE to hike rates by 25bp in November 2026 (vs previous forecast for rates to remain unchanged).
• PBoC is reportedly to add new macro prudential assessment metrics for banks, tightening scrutiny on bond durations and fund investment ratio, sources suggest.
• PBoC plans to expand the yuan offshore market and will consider expanding the central bank's macroprudential and financial stability roles, adds will innovate macroprudential policy tools and support steady economic recovery and growth. said:. Backs building a new model for real estate development. Will boost cross-border yuan usage.
• Indian CPI (Aug MM) 0.73% (Prev. 0.88%).
• Indian CPI (Aug YY) 4.82% vs. Exp. 4.8% (Prev. 4.45%).
• Swiss Weekly Sight Deposits (w/e Sept 11) Total: 451.6bln (prev. 452.6bln); Domestic 427.24bln (prev. 424.97bln).

GEOPOLITICS

RUSSIA-UKRAINE

• ArcelorMittal (MT NA) said it is halting primary steel production Kryvyi Rih plant in Ukraine while damage and repair needs are assessed following a ballistic missile attack on Saturday.
• NATO Secretary General said NATO has all options available to counter Russian hybrid attacks and that its responses will not always be publicly visible.
• Polish Defence Minister said Poland recovered a drone from the Baltic Sea; initial findings suggest the drone was a Russian military drone.
• Russia's Defence Ministry said they hit 2 cargo vessels in the Black Sea, IFX reported.

MIDDLE EAST

• Iran’s Deputy Foreign Minister for economic diplomacy said the basis of new US sanctions has changed, making it easier to sanction individuals and companies in certain sectors, IRNA reported.
• Iran’s Persian Gulf Strait Authority publishes updated list of 77 vessels allegedly violating Iranian Strait of Hormuz protocols. Listed vessels face future passage restrictions, including fines, detention or confiscation. Vessels cooperating with sanctioned ships will also be added to the list.
• Iran's Foreign Ministry Spokesperson said that "We met with the Emirati side at their request and held bilateral talks on regional peace and security".
• Houthi Spokesperson claims the attack on Saudi's King Khaliq Air base; "The Armed Forces will continue to carry out significant military operations towards Saudi territory as long as it continues its unjust aggression against our people".
• Iran's Foreign Ministry Spokesperson said that reported about nuclear activity in Iran's Pickaxe mountain are baseless.
• Iran's Foreign Ministry Spokesperson said that Iran has no interference in Yemen and denies participation in the attacks on a Saudi oil pipeline.
• Iran's Foreign Ministry Spokesperson said that Saudi Arabia insisted that the meeting between Iran and Gulf nations in Oman not to take place; postponed to another date due to the Yemen situation. The memorandum of understanding between Iran and Oman, as the two coastal states of the Strait of Hormuz, regarding determining safe maritime routes, is the result of weeks of intensive negotiations and was drafted with full respect for the sovereign rights of the two countries.
• Iran's Foreign Ministry Spokesperson Baghaei said that the US attacked Iranian vessel near Island of Hengam, killing one, injuring several others.
• Houthi spokesman said they will release an important statement related to Saudi Arabia at 09:00 BST / 04:00 EDT.
• Iran's Akbari said "The Iranian route can be a sustainable alternative to the Red Sea route and ensure the connection of Asia, India, China and Singapore to Europe in times of crisis".
• Iranian Parliamentary speaker Ghalibaf reiterates that Iran has full control of the Strait of Hormuz.
• Saudi defence missile hits a mosque in Yemen, according to Mehr News Agency.
• Israel conducts air strikes on southern Lebanon, according to Tasnim.
• Saudi Crown Prince met the US CENTCOM chief to discuss the latest regional developments, according to Saudi state TV.
• Saudi Civil Defence activates an early warning system in Abha and Khamis Mushait, but the danger has now passed.
• Oman's Energy Minister said that the Strait of Hormuz is to reopen soon; adds that the current situation is short-term and that oil prices are not sustainable.
• IRGC said they downed a MQ1 drone over the Strait of Hormuz, Mehr news reported.

NOTABLE NORTH AMERICAN NEWS

• BofA Total card spending (Aug) +4.5% Y/Y; spending remained robust while discretionary services continue to provide a steady foundation despite moderation in a few categories.

NORTH AMERICAN DATA

• Canadian CPI Common (Aug YY) 2.6% vs. Exp. 2.7% (Prev. 2.7%).
• Canadian Core CPI (Aug YY) 2.4% (Prev. 2.3%).
• Canadian Core CPI (Aug MM) 0.1% vs. Exp. 0.2% (Prev. 0.2%).
• Canadian CPI Median (Aug YY) 2.0% vs. Exp. 2% (Prev. 2.0%).
• Canadian CPI Trimmed-Mean (Aug YY) 1.9% vs. Exp. 1.9% (Prev. 1.9%).
• Canadian CPI (Aug MM) -0.1% vs. Exp. 0% (Prev. 0.5%).
• Canadian CPI (Aug YY) 3% vs. Exp. 3.0% (Prev. 3%).
• Canadian Manufacturing Sales Final (Jul MM) -0.4% vs. Exp. -0.2% (Prev. 0.1%).