Newsquawk Daily European Opening News - 5th October 2026

• US President Trump said that he will be making a decision on Iran; Iran said the Strait of Hormuz will not reopen until its conditions are met.
• APAC stocks began the week mostly higher in holiday-thinned conditions; US equity futures pared early upside in the absence of major fresh catalysts.
• DXY strengthened to start the week; EUR/USD weakened overnight to its lowest since May last year, with the single currency not helped by the unrest in France.
• Crude futures ultimately retreated despite the initial upside seen amid the ongoing US-Iran stalemate; 10yr UST futures gradually rebounded.
• Looking ahead, highlights include Global S&P Services/Composite PMI Final (Sep), EU PPI (Aug), and US ISM Services PMI (Sep). Speakers include ECB's Schnabel & Fed's Goolsbee.

As of 06:20BST/01:20EDT

LOOKING AHEAD

• Highlights include Global S&P Services/Composite PMI Final (Sep), EU PPI (Aug), US ISM Services PMI (Sep). Speakers include ECB's Schnabel & Fed's Goolsbee.
• Click for the Newsquawk Week Ahead.

• US President Trump said that he will be making a decision on Iran, while he added Iran has been decimated, so the only question is if it will be the easy way or the hard way.
• US President Trump's cabinet members and top security officials met secretly at Camp David on Friday to discuss the next steps for conflicts in Iran and Yemen, according to Axios.
• US removed all its B-1 bombers from the UK's Fairford air base amid security concerns, while Axios reported that a US official said the base was under threat of attack by Iran.
• Iran said the Strait of Hormuz will not reopen until its conditions are met.
• Iranian Foreign Minister Aragchi stated that Iran is serious and firm in both defending itself and advancing diplomacy, while he emphasised that if the enemies once again take the path of military confrontation, they will face a stronger response than in the past, but noted Iran remains ready to achieve a just and honourable solution through diplomacy.
• Iranian Foreign Ministry senior official said Iran is reviewing Washington’s response to the 7-day proposal sent through intermediaries, as other officials offered differing assessments of whether further negotiations with the US were needed, according to Iran International.
• IRGC's Commander-in-Chief Advisory Group head Fadavi warned that if the US launched a ground attack, Iran will target vessels, bases and any place belonging to the US, while he also stated that Iran has not even wasted a day to strengthen its military capability.
• Iran summoned the Norwegian ambassador in Tehran to lodge a formal diplomatic protest over Oslo’s continued inaction regarding unauthorised Starlink satellite internet operations within Iranian territory, which the US and Israel are said to have weaponised for subversion and espionage.
• Israel's Chief of General Staff Zamir chaired a senior commanders meeting, where it was stated that future military strategy will prioritise preventing sudden war and include a comprehensive expansion of forces.
• Yemen Houthis attacked a Saudi Aramco facility in Riyadh with missiles and drones.
• Saudi-backed Yemeni forces began an operation to reclaim areas held by the Houthis.
• UKMTO received reports of an incident 60 nautical miles south of Yemen's Mocha port, in which a tanker reported multiple explosions nearby, although the crew was reported to be safe and no environmental impact was observed. UKMTO reported earlier on Sunday that it received a report that a tanker was struck in the Strait of Hormuz, causing damage to the engine room.

EQUITIES

• US stock indexes closed the final session of the week in the green, as did all sectors, with Consumer Discretionary and Materials the outperformers. The key risk event on Friday was the soft US payrolls report, as the headline underwhelmed, and the unemployment rate rose, albeit as did the participation rate. Following the release, there was a notable dovish reaction with upside in US equity futures, US Treasuries, and spot gold, accompanied by downside in the Dollar. However, since the data print, the moves had pared into the weekend, where participants await Middle East updates. In the energy complex, which sparked initial downside, French President Macron confirmed that diesel and crude stocks would be released over 4 months, and G7 leaders confirmed the release of up to 100mln barrels of oil and diesel stocks.
• SPX +0.73% at 7,723, NDX +1.00% at 30,808, DJI +0.49% at 51,182, RUT +0.94% at 2,833.
• Click here for a detailed summary.

TARIFFS/TRADE

• US President Trump said on Friday that they didn't jump the gun on the Alaska pipeline and warned if Korea doesn't do the pipeline, they will charge South Korea more.
• US will receive its first potash shipment from Belarus in four years as relations thaw, according to FT.
• China launched an anti-dumping probe into European chemical exports in a tit-for-tat following three similar investigations launched by the EU last week, according to FT.

NOTABLE HEADLINES

• Fed's Goolsbee (2027 voter) said on Friday that the labour market is steady and the inflation side of the Fed's job is more important, while he noted there is plenty of room for anything on the table as far as a rate hike or pause. Furthermore, he is open to seeing if they get evidence they are heading back to 2% inflation and won't rule out any decision at the next meeting.
• US President Trump posted that his administration will, immediately, begin sending checks of nearly USD 100 to over 20mln seniors to help pay for Medicare Part B premiums, which they have already reduced by significant amounts.
• US Treasury Secretary Bessent downplayed concerns over the recent rise in yields, saying it was in line with global trends, while also playing down concerns about an AI bubble. He criticised prominent AI figures' warnings about existential risks posed by AI as alarmist and unhelpful, and called on the industry to police itself and develop solutions. Bessent also stated that he discussed uncontrolled AI agents with Chinese Vice Premier He and that they will talk more in October and November. He also commented that China is substantially behind the US on AI but has advanced.
• White House National Economic Council Director Hassett called on former Fed Chair Powell to leave the Fed's board following an internal report that cited management failures in the renovation of the central bank's headquarters.
• White House AI task force led by National Intelligence Director Clayton, whom President Trump named as his AI czar, will provide a report assessing the risks posed by AI and the federal government's responsibilities regarding the technology.
• US and Mexico have jointly deployed military personnel in a border area in Texas as part of operations, according to the Mexican government.

EQUITIES

• APAC stocks began the week mostly higher in holiday-thinned conditions and following the gains last Friday on Wall St, where stocks were underpinned as Fed rate hike bets were unwound in a knee-jerk dovish reaction to the weak jobs data.
• ASX 200 eked marginal gains with upside in miners, materials and healthcare helping keep the index afloat, although gains were limited by weakness in utilities and consumer stocks.
• Nikkei 225 rallied and briefly reclaimed the 70,000 level amid strength in tech stocks, which seemed to also benefit from the holiday closure in South Korea.
• Hang Seng lagged amid the continued absence of mainland participants and stock connect flows, while automakers were also pressured following reports that the UK is considering imposing tariffs on Chinese electric vehicle imports amid concerns that Beijing is flooding the market with state-subsidised cars.
• US equity futures pared early upside in the absence of major fresh catalysts over the weekend and with ISM Services data due later, while this week's main scheduled highlight is the FOMC Minutes on Wednesday.
• European equity futures indicate a mildly positive cash market open with Euro Stoxx 50 futures up 0.3% after the cash market closed with gains of 1.0% on Friday.

FX

• DXY strengthened to start the week and reclaimed the 102.00 status after rebounding from the post-NFP dip as the greenback benefited from the weakness in its major counterparts, despite the unwinding of October Fed rate hike bets. There were few fresh macro catalysts over the weekend, although there were previous comments from Fed's Goolsbee, who stated that there is plenty of room for anything on the table as far as a rate hike or pause and that he won't rule out any decision at the next rate meeting, while Treasury Secretary Bessent downplayed concerns over the recent rise in yields and stated that it was in line with global trends.
• EUR/USD weakened overnight to its lowest since May last year, with the single currency not helped by the unrest in France, where student protests in Paris forced hundreds of schools to fully or partially close, while the bloc also faces headwinds from trade-related frictions with China launching an anti-dumping probe into European chemical exports in a tit-for-tat following similar investigations launched by the EU last week.
• GBP/USD was pressured and retested the 1.3200 level to the downside, while there is a lack of tier-1 data for the UK this week.
• USD/JPY climbed higher amid the firmer buck and despite the lack of fresh catalysts, while comments over the weekend from Japanese Finance Minister Katayama did little to shift the dial, in which she stated that the FX trend has changed somewhat since the joint FX intervention was announced, and that US Treasury Secretary Bessent questioned whether Japan's government has been sending a unified message to markets.
• Antipodeans began the week on the backfoot, with AUD/USD not helped by mixed tier-2 data, while NZD/USD resumed the weakening trend seen since late August, with the pair dipping to sub-0.5600 territory.
• Brazilian President Lula won around 45.2% of votes, and Flavio Bolsonaro won around 47% of votes in the first round of Brazil's Presidential Election and will head into a runoff on October 25th. Brazil's President Lula said it was an unexpected result and he was convinced that he would win in the first round, while Bolsonaro said he is very happy with the results and that Brazil wants change.

FIXED INCOME

• 10yr UST futures gradually rebounded from the trough seen during Friday's session, where they ultimately reversed the knee-jerk dovish reaction to the weak jobs data, while there was no clear catalyst for the downside pressure, although long-term yields have since eased back with the curve flatter to start the week.
• Bund futures kept afloat but off the recent 3-week high with near-term resistance at the 122.00 level.
• 10yr JGB futures edged higher in mixed price action following a decline in oil and recent weak data releases from both Japan and the US, resulting in a steeper Japanese curve with short-end JGBs outperforming and Japan's 30yr yield hitting a fresh record high.

COMMODITIES

• Crude futures ultimately retreated despite the initial upside seen amid the ongoing US-Iran stalemate and reports that Houthis targeted an Aramco facility in Riyadh. However, the opening gains were short-lived as participants also mulled recent supply-related headlines, including the announcement on Friday that G7 countries agreed to release 100mln barrels of diesel and crude oil from emergency reserves, while President Trump had also announced that the US would not conduct a diesel export ban. Furthermore, there was little surprise from the OPEC+ meeting on Sunday, in which major producers agreed to maintain production quotas at their current levels for November, while it was also reported that Middle East oil exports in the last week exceeded pre-war levels, according to Kpler data.
• Major OPEC+ producers agreed to maintain oil production quotas at current levels for November, according to delegates.
• G7 countries agreed on Friday to release 100mln barrels of diesel and crude oil from emergency reserves, while pledging to refrain from energy export restrictions following pressure from the US.
• US President Trump said on Friday that they will not do a diesel export ban, while he added that Europe is making a major contribution, and so is the US. Trump separately commented that the US will soon be filling up its strategic petroleum reserve.
• Middle East oil exports last week exceeded pre-war levels, according to Al Arabiya citing Kpler data.
• Iraq said on Saturday that it transported 2mln bbls of crude through the Strait of Hormuz.
• Saudi Arabia set November Arab light crude oil official selling price to Asia at a discount of USD 5 per barrel vs Oman/Dubai average, while it set the OSP to Northwest Europe at a premium of USD 0.85 vs ICE Brent, and set the OSP to the US at a premium of USD 4.60 vs ASCI.
• Iranian Oil Minister Paknejad resigned, while Deputy Oil Minister and Head of National Iranian Oil Company Hamid Bovard was appointed as Acting Oil Minister.
• UK union said Apache workers back a strike that could disrupt the North Sea Forties oil pipeline.
• Spot gold was indecisive following the post-NFP fluctuations and as long-term yields retreated overnight.
• Copper futures gained amid the mostly positive risk sentiment after October Fed rate hike bets unwound on the weak jobs data, but with the upside capped in the absence of its largest buyer.

CRYPTO

• Bitcoin gradually declined in two-way trade but remained above the USD 86,000 level.

NOTABLE ASIA-PAC HEADLINES

• Japanese Finance Minister Katayama said the FX trend has changed somewhat since the joint FX intervention was announced, while she added that US Treasury Secretary Bessent has questioned whether the Japanese government has been sending a unified message to the markets.
• BoJ Deputy Governor Uchida said adoption of AI might have positive and negative implications for productivity and labour markets, while he added that AI has become a key topic of discussion among central banks, including at the BoJ's monetary policy meetings. Furthermore, he said AI has implications for several key monetary policy variables, including the output gap, financial conditions and neutral-rate measures, as well as noted that AI represents a strong positive demand shock, adding upward pressure to both the economy and prices, while it could also influence the supply side, potentially in a positive way by lifting productivity and supporting capital accumulation.
• SoftBank (9984 JT) CEO Masayoshi Son said even he is worried about AI safety risks, as machines rapidly gain more capabilities.
• South Korean regulators urged financial institutions to promptly complete internal security inspections and report the results to authorities after a series of cyber attacks and data breaches.
• Temu’s UK sales more than doubled to USD 171mln last year, as the Chinese ecommerce company exploited a tax loophole that exempts its small parcel imports from customs duty.

RUSSIA-UKRAINE

• Ukrainian President Zelensky said Ukraine will strike Russian refineries in response to Moscow's "new doctrine" of airstrikes.
• Russia said it would intensify attacks on Ukrainian infrastructure, while the Russian Foreign Ministry separately warned that diplomats and foreign officials in Kyiv were in mortal danger.
• Russia said it struck a cargo vessel off Odessa and downed 559 drones. It was also reported that Russia struck an infrastructure facility in Zaporizhzhia, although there were no preliminary reports of casualties in the Zaporizhzhia attack, according to Novyny Live.
• US President Trump's administration's talks with Russia on ending the Ukraine war now include a potential multibillion-dollar oil deal benefitting Middle Eastern business executives with ties to US negotiators Witkoff and Kushner, according to NYT.
• German Chancellor Merz warned of Russia's threat to the West and reiterated Germany's support for Ukraine during a visit to Kyiv. He also announced a fresh EUR 1.35bln in military aid for Ukraine and said Germany would not be intimidated into withdrawing its support.
• Moldova said several Russian attack drones had violated its airspace before exploding.

OTHER

• North Korean leader Kim oversaw the launch of an intermediate-range strategic missile using a hypersonic weapons system, according to KCNA. It was separately reported that South Korea's Blue House convened a national security council meeting regarding the North Korea missile launch.

NOTABLE HEADLINES

• UK Treasury Select Committee Chair Hillier said Chancellor Healey will face pressure this week from top British lenders to back a cut in their capital requirements, according to FT.
• UK government is to announce plans for a social media ban for under-16s in the coming weeks amid concerns that children are being exposed to harmful content, according to The Times's Swinford.
• UK Conservative Party leader Badenoch is using the party's annual convention to call for the abolition of inheritance tax and an expansion of childcare support to higher earners.
• German Chancellor Merz is set to meet former ECB members de Cos and Knot, who are frontrunners to succeed ECB President Lagarde, according to people familiar with the matter
• France's Education Minister said that as many as 500 schools could be partially or fully closed on Monday following clashes between riot police and student protesters.
• EU would “significantly limit” Ukraine’s access to the EU’s agricultural markets and lucrative farming subsidies if Kyiv became a member of the bloc, according to proposals for EU enlargement cited by FT.
• Latvian Prime Minister Kulbergs's party won a record number of seats in the parliamentary elections and is on track to secure 42 seats in the 100-member parliament with 35.3% of the vote.