European Market Wrap - 7th September 2026

---

• European bourses were broadly lower; SMI underperformed.
• G10s were stronger against the USD; JPY the clear outperformer, continuing to build on recent advances.
• Iranian Foreign Ministry spokesperson said the deal with Oman regarding the Strait of Hormuz will be registered soon.
• FT reported that Saudi Aramco Jizan oil facilities were hit in new strikes

EQUITIES

• European bourses started the first trading session of the week with broad losses, with the SMI the underperformer, given losses in Novartis (see more below).
• Sectors held a slight negative bias. Energy topped the sector pile, with Utilities and Technology rounding out the sector gainers. At the bottom was Media, with Real Estate and Insurance completing the sector laggards.
• Key movers include: Novartis (-2.5%), phase 3 CVD trial misses primary endpoints; AstraZeneca (+0.9%), Camizestrant plus CDK 4/6 inhibitor gains approval in the US for breast cancer; Ferrexpo (+21%), restarts production using one pellet line in Ukraine; E.ON (+1.2%), upgraded to buy at UBS.

FX

• Note: US participants are on holiday on account of Labour Day, so expect thin liquidity conditions.
• Snapshot: G10s were firmer against the broadly weaker USD. JPY was the clear outperformer, with USD/JPY slipping to a 154 handle. EUR was steady, and ultimately unmoved by a strong far-right (AfD) victory in Saxony-Anhalt.
• DXY was relatively steady for most of the APAC session, but came under some selling pressure in the European morning. Pressure which came amidst some hefty JPY buying, and as markets pulled-back from upside seen post-NFP.
• JPY was the clear outperformer today. Overnight trade was lacklustre, but the currency received some hefty flows this morning as US-JN yield differentials narrowed. USD/JPY resided towards the bottom end of a 154.05 to 156.29 range. The strength over the past week can be explained by a hawkish repricing at the BoJ, potential intervention/coordinated rate checks with the US, and the extraordinary GPIF meeting in August. The GPIF meeting is perhaps the most interesting of them all. If the world’s largest pension fund opts to raise its domestic bond purchases to the upper end of its target range (from 26.9% to 31%), it would boost purchases by c. JPY 12.3tn, Societe Generale writes.
• EUR was slightly firmer vs USD this morning, and little moved following the far-right (AfD) victory in Saxony-Anhalt. In brief, the party garnered 44% of the vote but fell short of the majority. Markets will be attentive to whether AfD can form a coalition with another party, but this will likely prove to be tricky given that rival parties have refused to work with the AfD. However, a surprise entry of BSW to parliament may open the door for the AfD to feasibly form a majority coalition.

FIXED

• A bearish start to the week for fixed income, weighed on by upside in the energy space as the US and Iran clashed over the weekend. At most, this sent Bunds to a 122.76 base from a peak of 123.01. However, the benchmark was also weighed on by the strength of AfD in the Saxony-Anhalt regional election, with 44% of the vote but a few seats shy of an outright majority. It now remains to be seen if AfD will work with BSW to some degree, or if they will attempt to lead a minority. Additionally, we look to Chancellor Merz’s response, particularly ahead of two more regional elections later in the month.
• Elsewhere, Gilts opened on the backfoot, lower by just under 30 ticks at most hitting a 85.90 base. Focus earlier was on a speech by Chancellor Healey. Overall, the commentary was as expected. The main line was perhaps that he wants to draw a line under the rising costs of living and business, a comment that can potentially be taken as an early signal that there will not be an unwelcome surprise in the Autumn Budget.
• Uber (UBER) reportedly hires banks for its first Euro bond offering.
• Banco BPM (BAMI IM) files to sell EUR-denominated 6-year noted. Guidance seen +115bps to mid-swaps.

COMMODITIES

• Crude futures initially started the week on the front foot, steadily rising to a peak of USD 93.04/bbl and USD 97.93/bbl, respectively, in WTI Oct'26 and Brent Nov'26. Strength which came following US strikes against 3 Iranian crude tankers on Saturday in retaliation for the IRGC targeting US Navy warships with ballistic missiles. Additionally, Iran's navy said it targeted three oil tankers that were travelling through unauthorised routes in the Strait of Hormuz and three additional US vessels in other areas. As the European session got underway, energy benchmarks pulled back to reach session lows session lows; WTI and Brent just shy of USD 91/bbl and USD 96/bbl. The downside came amid comments by the Iranian Foreign Ministry spokesperson, stating that negotiations with Oman on Hormuz has reached the final stages and that an agreement on a temporary Hormuz route will be made in the coming days. However, any pressure ultimately reversed thereafter.
• There was some strength seen in the crude benchmark following an FT report which said Saudi Aramco's Jizan oil facilities were hit in new strikes.
• Spot gold started on the back foot as the energy complex lifted on the aforementioned geopolitical updates. However, as crude prices fell, the yellow metal began to lift off its session low of USD 4384/oz and since regained the USD 4400/oz handle.
• 3M LME Copper traded either side of the USD 14.4k/t throughout the Asia-Pac session before steadily climbing to a peak of USD 14.47k/t amid weakness in the dollar.
• Saudi Aramco Jizan oil facilities were reportedly hit in new strikes, the FT reports citing sources; hit on Monday, damage is being assessed

EUROPEAN DATA

• European GDP Growth Rate 3rd Estimate (Q2 YY) 1.2% vs. Exp. 1% (Prev. 0.5%).
• European Employment Change Final (Q2 QQ) 0.1% vs. Exp. 0.1% (Prev. 0.1%).
• European GDP Growth Rate 3rd Estimate (Q2 QQ) 0.6% vs. Exp. 0.4% (Prev. -0.2%).
• European Employment Change Final (Q2 YY) 0.5% vs. Exp. 0.5% (Prev. 0.5%).
• European Sentix Investors Sentiment 5.1 vs. Exp. 1.6 (Prev. 0.9).
• French Foreign Exchange Reserves (Aug) 380.694B (Prev. 357.050B).
• UK Lloyds House Price Index (Aug MM) -0.2% vs. Exp. 0.2% (Prev. -0.1%); Y/Y -1.6% vs Exp. 0.00%.
• Swedish CPIF Prel (Aug MM) -0.3% (Prev. -0.3%).
• Swedish CPI Prel (Aug YY) 0.3% vs. Exp. 0.6% (Prev. 0.2%).
• Swedish CPIF Prel (Aug YY) 0.7% vs. Exp. 0.8% (Prev. 0.7%).
• Swedish CPI Prel (Aug MM) -0.3% (Prev. -0.3%).
• German Industrial Production (Jul MM) -1.1% vs. Exp. 0.3% (Prev. 0.2%).

NOTABLE HEADLINES

• UK Chancellor Healey said borrowing costs are at a historic high, fiscal discipline underwrites every promise the government makes and the UK must have a buffer to protect against uncertainty. Government spending is to be controlled. Fiscal credibility and growth go hand-in-hand. Recognises the elevated costs of living and costs for businesses. Wants to draw a line under this. Will set out a roadmap to fiscal devolution at the upcoming budget. Will be changing the Treasury Green Book discount rate from 3.5 to 3.0%.
• UK Chancellor Healey (Q&A) avoids the question, when asked if he will confirm there will not be tax increases in the Autumn Budget. Adds that he will not respond to or engage in speculation now with relation to tax, such matters are for the budget.
• Siegmund, the AfD candidate for Germany's Saxony-Anhalt, said he would stand as regional premier if AfD has a stable majority.

TRADE/TARIFFS

• China's Commerce Ministry said they are to collect security deposit on Japanese Dichlorosilane imports from September 8th. Maintaining communications with the US on AI.
• China's Commerce Minister Wang said stable EU ties are important, China seeks to handle trade conflicts with the EU through talks.

CENTRAL BANKS

• UBS sees the Fed hiking rates by 25bps in Sep' and Dec'26 (prev. no change).
• SNB Sight Deposits w/e Sep 7th (CHF): Domestic 425bln (prev. 431.29bln), Total 425.6bln (prev. 457.35bln.

GEOPOLITICS

RUSSIA-UKRAINE

• Russia hits a vessel carrying military supplies at Chornomorsk port and also strikes Izmail.
• Russian President Putin remains committed to escalating his war against Ukraine despite a new US push to revive peace talks, reports Kyiv Independent citing sources.

MIDDLE EAST

• Iran's Parliament Speaker Ghalibaf said that US oil and gas companies across these waters and facilities are threatened; "Strike our assets and you get struck".
• Iranian Foreign Ministry spokesperson said the deal with Oman regarding the Strait of Hormuz will be registered soon. Hope parties will not prevent the implementation of the understanding. Qatar's delegation was present within Iran on Sunday.
• Iranian Foreign Ministry Spokesperson said this is not a war but an overt aggression.
• Qatar Foreign Ministry spokesman said that "we need to realise that a strategic alliance with the US is good, but not enough".
• A military source told Al-Masirah that Saudi enemy airstrikes have resumed in Yemen on the governorates of Al-Jawf, Al-Bayda, Ma'rib, Taiz, and Al-Hudaydah.
• Saudi Aramco Jizan oil facilities were reportedly hit in new strikes, the FT reports citing sources; hit on Monday, damage is being assessed.