European Market Wrap - 22nd September 2026

• European bourses were broadly firmer with sentiment boosted after a couple of geopolitical source reports; headlines which weighed on crude benchmarks, yields and the USD.
• Kyodo reported that Iran could reopen the Strait in seven days, once the US ends its blockade; later corroborated by a Reuters source. However, this was subject to pushback from Iran's Fars News Agency.
• Markets await US President Trump shortly.

EQUITIES

• European bourses initially started the day on the back foot, but are set to end Tuesday's trade in the green amid a reversal of energy. The reversal was spurred by 2 constructive geopolitical updates: 1) Iran has suggested to the US administration that it will open the Strait of Hormuz within seven days if the US lifts its blockade on Iranian ports and stops military operations related to Hormuz, according to Kyodo (although this was later rebuffed) and 2) IRGC said that if Iran’s national interests require negotiations alongside war, then it must negotiate.
• Sectors highlighted the positive bias. Retail topped the sector pile, followed by Travel & Leisure and Construction. To the downside were Telecoms, with Energy and Insurance rounding out the sector laggards.
• Key movers included: Kingfisher (+10%) , raised its FY26/27 adj. PBT guidance; Smiths Group (+6.8%), FY26 revenue grew Y/Y and raised its dividend above estimates; Evonik (+3.7%), reports that BASF explored a potential deal with the Co. earlier in 2026; Bureau Veritas (+3.3%), raised its 2027-28 total revenue CAGR guidance; Ericsson (-4.7%), downgraded to Underweight from Equal Weight at Morgan Stanley.
• US cash equities opened entirely in the green, holding onto Monday's surge and ES futures now in touching distance of new record highs. Markets will be on tenterhooks, amid multiple meetings involving US President Trump and world leaders on the sidelines of the UNGA.

FX

• G10s were choppy against the USD this morning, but look to close the London session mixed. The Kiwi outperformed following hawkish commentary from RBNZ Governor Bremen, whilst the CHF and JPY formed the top three. The Aussie and Loonie were the marginal laggards this morning.
• USD was hit early doors following a source report which suggested that Iran could open the Strait of Hormuz within seven days if the US removed its blockade. This was later corroborated by a Reuters source, who also added that Iran had the authority to revive diplomacy in the US. However, a Fars report pushed back on the source reports. Focus today will be on US President Trump, who is set to speak at the UN General Assembly and hold sideline meetings with various countries; CNN suggested that Trump is open to meeting with Iranian officials if “conditions are right”.
• Any progress or hints that the two sides have meet/will meet will no doubt be bearish for the crude complex, and therefore on the USD. Therefore, key levels of support will likely reside at around the 100.00 level and then ~99.60 (a prior resistance level).
• JPY benefited greatly from the aforementioned Iranian source reports, but is now set to end the London session flat. Narrowing yield differentials are, of course, a positive for the JPY, which has recently been under some pressure in the aftermath of the dovishly perceived BoJ meeting from last week.

FIXED

• Fixed income benchmarks continued to be at the mercy of energy prices, with the downside across the crude complex lifting benchmarks and hence pulling yields further away from its recent extremes. The downside in energy was spurred by 2 constructive geopolitical updates: 1) Iran has suggested to the US administration that it will open the Strait of Hormuz within seven days if the US lifts its blockade on Iranian ports and stops military operations related to Hormuz, according to Kyodo (albeit later rebuffed), and 2) IRGC said that if Iran’s national interests require negotiations alongside war, then it must negotiate.
• USTs (+3 ticks) fell to a trough of 105-25+ before reversing to peak at 106-10+, just shy of recent highs of 106-11+. Outside of the above geopolitics, focus will be on comments by Fed's Williams, Jefferson and Barkin, with Williams and Barkin likely to speak on monetary policy. In terms of recent commentary, Williams said that the Middle East conflict and tariffs remain the biggest drivers of inflation, with no second-round effects seen and inflation expectations well anchored, while Barkin questioned the need to raise rates to restore 2% inflation.
• Additionally, a 2-Year Note auction is on the docket. The 2-year yield currently trades around 4.73%, well above the 4.204% high yield at the August auction, providing a substantially greater outright yield for investors.
• Bunds (+10 ticks) and Gilts (+2 ticks) traded in tandem, with Gilts underperforming their peers despite typical outperformance on lower energy prices. A key pointer for this underperformance was the latest borrowing data this morning, which overshot expectations.
• BTPs (+7 ticks) were disappointed by the 2025 deficit/GDP revision, which remained above the key 3.0% mark that determines the EU’s EDP system. As such, we now look to see if Italian Finance Minister Giorgetti moves forward with using the Escape Clause or not. For reference, the BTP-Bund 10yr spread remained steady at 89bps at the time of writing.
• Germany sold EUR 3.735bln vs Exp. 5bln 2.90% 2031 Bobl: b/c 1.21x (prev. 1.56x), average yield 3.28% (prev. 3.09%), retention 25.3% (prev. 22.16%).
• UK sold GBP 4.75bln 4.625% 2032 Gilt: b/c 3.07x (prev. 3.34x), average yield 4.843% (prev. 4.613%), tail 0.4bps (prev. 0.2bps).

COMMODITIES

• WTI Nov and Brent Dec futures reversed earlier gains and extended sharply lower after a notable shift in tone from the IRGC, which said that if Iran’s national interests require negotiations alongside war, then it must negotiate, contrasting with the IRGC’s usual escalatory rhetoric. The diplomatic tone was initially reinforced by Reuters and Kyodo reports that Tehran could reopen the Strait of Hormuz within seven days if the US eased military pressure and lifted its blockade on Iranian ports, although Iranian sources via Fars later denied those reports as “invalid and untrue”, prompting a modest recovery in crude. Further diplomatic noise included Rubio saying the US remains open to an Iran meeting at the UN, while CNN reported Trump would like to meet Iranian officials if “conditions are right”, although nothing is currently scheduled. Nonetheless, eyes remain on Trump’s UNGA speech. WTI fell to a USD 89.16/bbl low from a USD 93.84/bbl high, while Brent fell to a USD 93.71/bbl low from a USD 97.91/bbl high and trades just above USD 94.00/bbl at the time of writing.
• Dutch TTF extended its downside alongside the broader energy complex as prospects for renewed US-Iran diplomacy reduced some of the Middle East supply-risk premium. TTF fell to a EUR 68.65/MWh low from a EUR 75.22/MWh high before recovering to around EUR 70.50/Wh.
• Precious Metals were mixed and off earlier extremes as lower energy prices and global yields provided some support. Spot gold recovered from a USD 4,291.69/oz low to a USD 4,383/oz high before easing to around USD 4,339/oz. Spot silver similarly rebounded from a USD 64.57/oz low to a USD 66.81/oz high before paring to around USD 66/oz.
• Base Metals remained firmer, with copper supported by the broader positive global risk tone and the sharp pullback in energy prices providing some relief to the inflation and growth outlook. COMEX copper traded around USD 6.77/lb, while 3M LME copper traded towards the upper end of a USD 14,824.00-14,790.00/t range.
• Libya’s National Oil Corporation said the shutdown of the Sharara-Zawiya crude pipeline has cut production by around 130k BPD and warns losses will rise if the shutdown persists.
• Rusal is said to be seeking buyers for its assets in Jamaica and Guyana, reported suggest.
• Mexico reportedly set import quota of 10,000 head of live cattle.
• Endeavour Silver (EXK) said output at its Guanaceví silver mine is temporarily reduced; a mechanical issue at the Guanaceví mine’s primary ball mill has reduced processing capacity, with repairs expected to take around three weeks. The regrind circuit will operate at 600 tonnes per day vs normal capacity of around 1,100 tonnes per day, while mining operations continue uninterrupted.
• US diesel prices hit fresh record at USD 6.527 a gallon.
• Russia's Agriculture Ministry said its grain procurement planned for 2026-27 at 3mln tonnes, IFX reported.
• Saudi Arabia restarts the East-West oil pipeline and prepares to resume crude oil exports from Yanbu port later on Tuesday, according to trade sources.
• Russian Kremlin said they are finding alternative routes for their grain. Ukraine is the reason for the export issues. Discussions with Turkey around the Black Sea have taken place.
• French President Macron is said to be in favour of relaxing rules around diesel and jet fuel, given the ongoing Middle East situation.
• Turkish Ministry said they are to cooperate with the US on small modular reactors.
• Saudi's Aramco has reportedly told Asian refiners that they will be able to pick up oil from Yanbu soon, Bloomberg reported citing sources.

EUROPEAN DATA

• UK CBI Industrial Trends Orders (Sep) -9 vs. Exp. -34 (Prev. -25).
• UK Public Sector Net Borrowing (PSNB) ex-Banks (Aug) 18.3B vs. Exp. 15.7B (Prev. 2.0B).
• Spanish Trade Balance (Jul) -5.22B (Prev. -7.69B).

NOTABLE HEADLINES

• The European Commission and the EIB Group launches the European Institutional Investors Pact, a new voluntary framework designed to channel more long-term institutional capital into Europe's technology and scale-up ecosystem.

TRADE/TARIFFS

• Argentina's President Milei US trade deal is under threat as Argentina demands better terms, according to Bloomberg. US policymakers told Argentina that renegotiation of trade deal is not on the table.
• China's MOFCOM said that its Commerce Minister met with the German Auto Industry Association President to discuss bilateral auto cooperation and China-EU trade; said China is not the root cause of EU trade problems.
• UK PM Burnham to call on EU Commission President von der Leyen to allow the UK to partake in the EU's Made in Europe industrial framework, FT reported.
• EU Trade Commissioner Sefcovic is to visit China between October 8th-9th for trade talks. There is genuine engagement from Chinese counterparts in trade talks.
• China's MOFCOM announces the adjustment to the "Catalogue for the Administration of Export of Precursor Chemicals to Specific Countries"; export permits required for US, Mexico and Canada under new rules. China's Ministry of Commerce and four other government agencies added two chemical varieties—methyl 1-phenethyl-4-oxopiperidine-3-carboxylate and ethyl 1-phenethyl-4-oxopiperidine-3-carboxylate—to the export control catalog for specific countries.

CENTRAL BANKS

• NBH Statement: set the medium-term inflation target at 2.5% +/- 1%, bringing it closer to the ECB's target. Forecasts:. 2026 Inflation 1.8% (prev. 1.8%). 2027 Inflation 3.1% (prev. 2.3%). 2026 GDP 1.8% (prev. 2.0%). 2027 GDP 2.9% (prev. 3.0%). Inflation expectations declined significantly and are now around levels observed during the period of price stability. In the long term, a lower inflation target means more moderate inflation, a more predictable economic environment, and lower nominal interest rates and financing costs for the Hungarian economy.
• Hungarian Interest Rate Decision 5.50% vs. Exp. 5.5% (Prev. 5.50%).

GEOPOLITICS

RUSSIA-UKRAINE

• US Secretary of State Rubio said intend to live up to commitments with Saudi Arabia, according to Fox News; on Ukraine war, concerned about US-linked ships being targeted; want to bring to an end on Ukraine war. Energy infrastructure ceasefire in the Ukraine war would be a great idea.
• Radiation monitoring station at the Zaporizhzhia Nuclear Power Plant was damaged in a Ukrainian drone attack, a Russian-installed officials said.
• Russia's Agriculture Ministry said its grain procurement planned for 2026-27 at 3mln tonnes, IFX reported.
• Russian Kremlin said they are finding alternative routes for their grain. Ukraine is the reason for the export issues. Discussions with Turkey around the Black Sea have taken place.
• Russia's oil exports from Black Sea Novorossiysk Port reportedly surged to 650k bpd in September, +50% M/M, sources suggest.
• Ukraine's Naftogaz said that the Russian attack caused critical damage, which makes it effectively impossible to restore it.
• Russian Foreign Minister Lavrov and US Secretary of State Rubio are set to meet on September 23rd, TASS reported.
• Russian Defence Ministry said Russian forces struck an oil refinery in Ukraine’s Kremenchuk, TASS reported.

MIDDLE EAST

• US President Trump reportedly told his advisers that he would like to meet Iranian officials if "conditions are right", CNN reported; nothing is currently scheduled, and unclear if Iran is open to a meeting.
• US President Trump's UN speech is to be on how he will use the US' powers to confront Iran, cartel violence and other threats, Fox reported citing a White House official.
• US Secretary of State Rubio said open to Iran meeting at the UN, according to NBC; don't think anything is scheduled on Trump-Iran; Trump is open to meeting with anybody. Roughly 60-70% of oil shipments have resumed and that share is rising.
• Iranian sources via Fars have declared reported from Kyodo and Reuters, that Tehran is ready to reopen the Strait of Hormuz within 7 days if US military pressure is reduced and blockade of ports is lifted, to be invalid and untrue. In the most recent case, Kyodo and Reuters, citing Iranian sources, claimed that Tehran is ready to reopen the Strait of Hormuz within 7 days if US military pressure is reduced and the blockade of ports is lifted; The news was accompanied by a drop in oil prices. However, Iranian sources have declared these reported to be invalid and untrue. Full Post:. Rumors of negotiations pushed oil prices down. The simultaneous release of positive news about Iran-US negotiations and the possibility of the reopening of the Strait of Hormuz once again affected the oil market and reduced prices. In the most recent case, Kyodo and Reuters, citing Iranian sources, claimed that Tehran is ready to reopen the Strait of Hormuz within 7 days if US military pressure is reduced and the blockade of ports is lifted; news that was accompanied by a drop in oil prices. However, Iranian sources have declared these reported to be invalid and untrue. This happened while the previous day, during a Pakistani official's visit to Tehran, oil prices fell by about 3% and Brent reached the $100 range. The repetition of this trend, from the release of positive news of negotiations simultaneously with diplomatic moves to the drop in oil prices, has become a recurring scenario. In such circumstances, Iranian officials must be vigilant and careful about the consequences of publishing these narratives and their impact on the oil market.
• Iran's Deputy Speaker of the Parliament said resistance has a cost, but surrendering has a much heavier cost, Mehr News reported.
• IRGC spokesperson warns US leaders and the administration against repeating actions previously attempted against Iran that ended in failure.
• Senior Iranian Official said that Tehran welcomes revival of diplomacy if the US takes tangible steps; the Iranian delegation is in the US, with full authority to revive diplomacy in the US, Reuters reported citing an official. Details of an agreement to end hostilities with the US can be discussed in New York via mediators. Iran can reopen the Strait within seven days if the US eases military pressure and lifts the blockade. Iran's proposal was delivered to the US via mediators on September 16.
• Iran's Judiciary Spokesperson said Iran has full control over the Strait of Hormuz, SNN reported.
• Iranian Parliament Speaker Ghalibaf said US President Trump cannot impose his power on Iran, adding that Iran will neither shut down nor surrender. Missile technology is at a stage where Iran can "target anywhere it decides". Will never yield in the conflict.
• Iran has reportedly suggested to the US administration that it will open the Strait of Hormuz within seven days if the US lifts its blockade on Iranian ports, Kyodo reported. "The proposal, which has already been conveyed to Washington through mediators, called for renewed talks aimed at reaching a permanent end to hostilities between the two countries, the official said.". "The official ruled out a meeting between Iranian President Masoud Pezeshkian and U.S. President Donald Trump on the fringes of the gathering, but said progress toward an agreement remains possible.". "There is a possibility of moving toward an agreement," the official said, while adding that Washington must demonstrate "seriousness and commitment" if diplomacy is to advance.". "Iran is seeking signs from Washington that it is prepared to return to negotiations and take steps toward an end to the U.S. military blockade of Iranian ports and a halt to military operations related to the Strait of Hormuz, the official said." and "If such steps are taken, Iran is prepared to reopen the strategic waterway within seven days and return to the negotiating table, according to the official.".
• IRGC said if Iran’s national interests require negotiations alongside war, then it must negotiate; said it will respond to any enemy strike with multiple strikes across different arenas and in various ways, Al Jazeera reported. IRGC said it will have no contact with the US as a military institution, even if Washington requests it and its assessments indicate the US and Israel are not prepared for a new war, but Iran is ready if they miscalculate.
• Israeli Defence Minister said they will bomb Iran for the 3rd time if necessary until the regime is overthrown, Al Arabiya reported.
• Israeli security source said the situation with Iran is sensitive and unstable, adding that the Iranians do not appear ready to back down and the situation could spiral out of control, according to Tasnim citing Israel’s Channel 12.
• Iranian Islamic World Peace Forum Secretary General said a path to negotiations can open if the US accepts Iran’s terms and respects its rights, adding that otherwise Iran will continue to resist, IRIB News reported.
• US President Trump is to discuss preventing the UN from infringing on sovereignty.
• The Israeli government is set to approve the recall of up to 200k reservists, according to sources.
• Iranian President said the US has trampled on the texts of the agreements it made with us, Al Jazeera reported.
• Iranian President Pezeshkian posted "Peoples cannot be forced into submission through force, nor can every action be justified under the guise of combating terrorism.".
• Former Iranian Vice President for Parliamentary Affairs said US President Trump has expressed readiness to meet and negotiate with Iranian President Pezeshkian, but argues Pezeshkian should not hold talks with Trump, Fars reported.
• Iranian President Pezeshkian pledged to defend the Iranian position at the UN General Assembly speech today, Al Mamlaka reported.
• Iranian President Pezeshkian has reportedly boarded a flight to New York to attend the UN General Assembly.
• Saudi Civil Defence issues a warning via the National Early Warning Platform over a potential danger in Najran Province; danger subsequently has passed.

NOTABLE NORTH AMERICAN NEWS

• US President Trump said cowards and traitors would love to say the United States is low on munitions. It's not true. We have more munitions than we could ever possibly think of using, and are building them up now at levels we have never seen before.

NORTH AMERICAN DATA

• US Redbook (Sep/19 YY) 7.6% (Prev. 8.5%).
• US ADP Employment Change Weekly 20K (Prev. 16.25K).
• Philadelphia Fed Non-Manufacturing Regional Activity Index (Sept.): -22.0 (exp. -8.7, prev. -10.6).