Newsquawk European Market Wrap - 21st October 2026

• European bourses were mostly firmer; EssilorLuxottica (+14.3%) soared post-earnings. Focus on SPCX (+7.5%) after reporting stellar results.
• DXY was steady whilst the Aussie outperformed following hawkish RBA commentary; GBP digests a hawkish inflation report.
• Iran's Secretary of Supreme National Security Council Rezaei informed Pakistan's Army Chief Munir, of Iran's explicit rejection of the American demands.

EQUITIES

• European bourses held onto their earlier gains, rebounding from two consecutive days of losses. Outside of the updates earlier in the day, gradual downside across the energy space also supported equities. A catalyst for the energy downside was unclear; however, the move came amid a write up from Iranian FM Araghchi on the FT showing willingness to diplomacy but caveated that they will defend themselves.
• Sectors are set to end with a positive bias. Tech topped the sector pile, with Real Estate and Banks rounding out the sector gainers. Optimised Personal Care overtook Autos as the sector laggard, with Autos and Telecoms completing the downside movers.
• Key stories include: EssilorLuxottica +14.3%, Q3 revenue beat estimates; Carrefour -14%, cut its FY26 guidance due to the conditions in France; Adidas +3.0%, Q3 metrics beat and lifted its FY26 operating profit guidance.
• US cash equities opened in the green, with the NDX higher on upbeat earnings from SpaceX and Super Micro. Focus now turns to Meta and Tesla earnings. For Meta, EPS is expected at USD 6.67 with revenue at USD 63.31bln, while median consensus for Tesla’s EPS is USD 0.45, with revenue at USD 27.94bln.

FX

• G10s were mostly firmer against the USD. The Aussie (+0.4%) outperformed following hawkish commentary from RBA’s Hauser, whilst the EUR (-0.1%) was the mild laggard as the French fiscal situation remains front of mind.
• DXY held within a 101.64 to 101.83 range, with the peak of the day coinciding with its 21-DMA. The index had little by way of US-specific newsflow/data, so action was fairly light. As for geopolitics, Iran rejected the US demands to Pakistan’s Army Chief; nonetheless, other key officials have struck a more conciliatory tone, showing their openness to peace/diplomacy.
• The Aussie was the outperformer today following hawkish remarks from RBA’s Hauser. He mentioned that the inflation outlook is “materially worse”, blaming AI spending and rising energy costs. Hauser added that Q3 CPI will show inflation accelerating. Money markets have upped their bets of a hike at the November meeting, and now assign a c. 50% chance of such a move. Further adding to the hawkish tone was Goldman Sachs now expecting a 25bps rate hike in November, vs its previous call of no move. AUD/USD topped the 0.70 mark, to trade back towards levels not seen since late-September.
• EUR remained pressured as the negative sentiment surrounding the French fiscal situation remained front of mind; the OAT-Bund spread widened to 156bps. Across the channel, the GBP gained slightly following the region’s inflation report, which played in favour of a hike in November. For reference, Danske, MUFG and Pantheon all expect a hike next month, and Pantheon sees another in February.

FIXED

• Global fixed benchmarks started the European morning relatively contained. USTs held within a narrow range, whilst Bunds and Gilts were under mild pressure amidst higher energy prices; UK paper also had a hawkish inflation report to digest.
• USTs were initially a touch lower, but managed to climb into the green alongside some pressure in the energy complex. The downside comes despite an Iranian rejection of US demands to the Pakistani Army Chief, though markets may be focusing in on the fact that indirect talks are ongoing. Aside from geopolitics, US-specific newsflow was lacking throughout the day; as such, USTs spent the day within a fairly narrow 105-06 to 105-16+ range.
• Bunds were pressured for most of the European day, but are set to end the session around the unchanged mark and within a 121.35 to 121.75 range. Focus in Europe remains on the French fiscal situation, with the OAT-Bund spread widening to 156bps, the worst since 2012. The next point of concern will be on a) how the French civil unrest develops, and then b) how French lawmakers vote on the draft bill (due Oct 27).
• Gilts underperformed early doors, pressured by firmer energy prices and a hawkish inflation report, which plays in favour of a November rate hike. Given that tightening was widely expected at next month’s meeting and the reversal seen in energy prices, Gilts gradually pared the initial losses and are set to end the London session firmer by c. 35 ticks. UK paper currently holds at the upper end of an 83.91 to 84.70 range.

COMMODITIES

• Crude benchmarks were bid throughout the European morning but have since reversed lower and started the cash session in the red. The reversal came amid an FT write-up from Iranian FM Araghchi, which highlighted willingness to diplomacy but warned that they will defend themselves. WTI reached a peak of USD 100.40/bbl before reversing to a low of USD 96.92/bbl, while Brent trades at the lower end of its USD 107.68-111.32/bbl range as US traders step in.
• Spot gold extended on Tuesday’s low of USD 4111/oz early in the APAC session, finding a trough of USD 4106/oz, before gradually climbing to end European trade at the upper end of its daily range (USD 4106-4142/oz).
• 3M LME Copper rose just shy of USD 14.46k/oz before falling to a trough of USD 14.28/oz, despite the upbeat tone across the equity space in Europe and the US.
• Rio Tinto (RIO LN) reportedly agrees with China's State iron ore buyer on a new annual supply contract, according to sources.
• US exporters sell 134k T of Soybeans to China.
• Weatherford (WFRD) expects Middle East activity to remain near current levels, with no recovery factored into its near-term outlook. Despite normalising oil exports, upstream activity remains subdued amid declining rig counts, delayed tenders and continued operational disruptions from regional conflict.
• Russia's Deputy PM Novak said will export only those volumes of diesel fuel that are not in demand on the domestic market, RIA reported.
• UK Energy Secretary Fahnbulleh is edging towards rejecting the Rosebank oilfield, The Guardian reported citing sources.
• US President Trump posted "the U.K. has started drilling in the North Sea, one of the greatest and most prosperous areas of OIL in the World. They should go FULL BLAST!". Full Post: "Great news for the wealth and prosperity of the United Kingdom, and the wonderful region of Aberdeen. The U.K. has started drilling in the North Sea, one of the greatest and most prosperous areas of OIL in the World. They should go FULL BLAST!!! This will make the U.K. very wealthy again. TAKE DOWN THE COSTLY AND RIDICULOUS WINDMILLS! President DJT".
• Hungary considers replacing Rosatom as main contractor in Paks nuclear project, according to reported, citing sources; will make final decision following a review.
• Naftogaz said Russia struck Ukraine's gas production site in the Kharkiv region.
• US President Trump's administration is reportedly to evaluate whether additional loans from the heating oil reserve should occur, sources report; Energy Department to loan as much as one third of the 1mln barrel northeast heating oil reserve.
• French President Macron said "we secured 2 terawatt-hours per month of gas from Qatar during the winter period".
• Russian President Putin said that they could supply fertilizers in large quantities to the American market, Tass reported.
• UK Energy Secretary said that the government will decide shortly on the Rosebank oilfield project.
• UK Energy Secretary greenlights the Jackdaw gas field, saying the regulator can grant consent for gas to be produced at the licensed Jackdaw field. Project will start to supply gas to British homes and businesses from as early as the end of this month.

EUROPEAN DATA

• UK ONS House Price Index (Aug) 0.4% Y/Y (Prev. 1.4%).
• UK Public Sector Net Borrowing (PSNB) ex-Banks (Sep) 24.5B vs. Exp. 23.9B (Prev. 18.3B).
• UK Retail Price Index (Sep YY) 3.9% vs. Exp. 3.9% (Prev. 3.4%).
• UK CPI (Sep MM) 0.4% vs. Exp. 0.3% (Prev. 0.5%).
• UK Retail Price Index (Sep MM) 0.1% vs. Exp. 0.1% (Prev. 0.6%).
• UK Core CPI (Sep MM) 0.2% vs. Exp. 0.2% (Prev. 0.3%).
• UK Core CPI (Sep YY) 2.8% vs. Exp. 2.7% (Prev. 2.6%).
• UK CPI (Sep YY) 3.5% vs. Exp. 3.4% (Prev. 3.1%); Services Y/Y 3.7% (exp. 3.6%, prev. 3.4%).
• UK PPI Input (Sep YY) 8.3% vs. Exp. 7.2% (Prev. 6.7%).
• UK PPI Output (Sep YY) 4.6% vs. Exp. 4.3% (Prev. 3.8%).
• UK PPI Input (Sep MM) 1.5% vs. Exp. 1.6% (Prev. 0.5%).
• UK PPI Core Output (Sep YY) 2.9% (Prev. 2.8%).
• UK PPI Output (Sep MM) 0.8% vs. Exp. 0.7% (Prev. 0.7%).
• UK PPI Core Output (Sep MM) 0.2% (Prev. 0.2%).

NOTABLE HEADLINES

• UK PM Burnham said he is considering removing standing charges from gas bills.
• Bundesbank noted the economy likely stagnated in Q3; See a modest recovery in Q4 from infrastructure. Q3 stagnation was particularly impacted by low Rhine water levels.
• UK's MHRA said that the UK will not require additional approval route for devices already approved by the EU.
• Germany's Federal Finance Agency Director said that Germany's annual borrowing will likely need to stay beyond EUR 500bln over the medium term due to defence/infrastructure spending, Econostream reported.
• Germany's Federal Finance Agency Director said that unconditional European support measures to calm sovereign bond markets could trigger a more serious debt crisis later, Econostream reported.
• French Finance Minister said "we have instruments to pass a budget".

TRADE/TARIFFS

• Canadian PM Carney is expected to announce tariff support measures for the steel and automotive sectors.
• China and the EU promise deeper antitrust enforcement cooperation and to uphold fair competition across global markets.
• Japan and India to hold 2+2 meeting in mid-November, Kyodo reported citing officials; aims to strengthen cooperation in maritime security and economic subjects.

CENTRAL BANKS

• ECB's Kazaks said that some more policy tightening might be necessary if inflation continues to reside above target; recent rise in yields has already tightened financing conditions, Econostream reported. Monetary policy cannot cure the French situation.
• ECB's Nagel said Europe must deepen its banking and capital markets integration, Econostream reported.
• Indonesian Central Bank leaves the BI rate unchanged at 5.75%, raises the Deposit Facility rate to 5.00% (prev. 4.75%). To cut its reserve ratio by one percentage point starting in November.

RUSSIA-UKRAINE

• Russia's Kremlin said US envoy Witkoff briefed Russian President Putin on his talks is Oslo and new approaches, but nothing of real use in context of a peace settlement. Putin is ready in principle to resume trilateral peace talks in mid-November, with discussions also covering security guarantees for Russia and Ukraine after the conflict. Witkoff indicated Trump would be very satisfied with a decision discussed during the talks. Implementation of the Russia-US diesel deal was an important part of talks. Russia and the US discussed major joint economic projects, with some nearing realisation. The Chinese are working to prepare for a possible three-way meeting between the leaders of Russia, US, and China.
• Russia's Envoy Dmitriev said Russian President Putin's call with US Special Envoy Witkoff was productive, TASS reported.
• Russia's Deputy PM Novak said will export only those volumes of diesel fuel that are not in demand on the domestic market, RIA reported.
• Naftogaz said Russia struck Ukraine's gas production site in the Kharkiv region.
• US President Trump posted "Numerous people, who requested that sanctions be immediately imposed on Russia, have called to apologize... they didn’t know that he was negotiating the release of Stephen Hubbard". Full post:. "Numerous people, who requested that sanctions be immediately imposed on Russia, have called to apologize to President Trump in that they didn’t know that he was negotiating the release of Stephen Hubbard, a truly big and important deal for the U.S. If sanctions would have been placed, certainly those negotiations would have come to a complete and total halt.".
• Ukrainian President Zelensky said trilateral meeting at minimum is necessary, according to Fox News; Important that Ukraine to be in any meeting and would also be better with Europeans; any deal would require a referendum. Need freeze, and then talks and US security guarantees.
• SpaceX (SPCX) must restore all services to Ukraine, the European Commission states.
• Russia's Kremlin said they will look at the US' proposal, but it is largely dependent on Ukraine. Adds, conversation between Russian President Putin and US President Trump will be both long and serious. If Ukraine does not make the necessary decisions, the situation will deteriorate. Putin-Trump-Xi meeting possible, but no agenda.
• Russian President Putin has invited US Envoy Witkoff for discussions on the prospect of a meeting between Putin and US President Trump in China, IFX reported.
• Russian President Putin said that they could supply fertilizers in large quantities to the American market, Tass reported.
• US Special Envoy Witkoff said talks in Oslo were productive and that there is forward progress on the issue of Ukraine, IFX reported. A basic foundation exists for a ceasefire in Ukraine. Hopes that Russian President Putin will consider resuming US-Ukraine-Russia talks. Emphasised that Russia and the United States have prospects for developing economic relations after the end of the conflict in Ukraine.
• Russia’s Foreign Ministry said it views Japan’s supply of drones to Ukraine as a hostile act; Russia will respond.
• Russia's President Putin tells US Special Envoy Witkoff that Russia is interested in restoring economic ties with the US, IFX reported.
• Russian President Putin has begun a meeting with US Envoy Witkoff, TASS reported.
• Russian strikes targeted energy facilities in Kyiv, Volyn, Odesa and Mykolaiv regions.
• Russia's Presidential Aide Ushakov said talks between Russian President Putin and Special Envoy Witkoff will be on Wednesday; said to be early on in the day; adds that Envoy Dmitriev also attending, TASS reported.

MIDDLE EAST

• Iran's Secretary of Supreme National Security Council Rezaei informed Pakistan's Army Chief Munir of Iran's explicit rejection of the American demands, reported Al Hadath. Rezaei informed Munir that Tehran is aware of Trump and Netanyahu's plans to launch a new strike on Iran. Rezaei stipulated that Tehran's seven conditions must be accepted before negotiations on the nuclear issue can begin. Munir's meeting with Rezaei aimed to de-escalate tensions and open a new path for negotiations. Pakistan understands that Iran must show more flexibility on the nuclear issue.
• Iran's Foreign Minister said "we have not reached a state of peace and are far from it. Therefore, all decisions must be made within the framework of the country's war conditions".
• Iran's Foreign Minister Araghchi said they are ready for diplomacy, but will defend themselves, FT reported; US has shown no willingness to reach an understanding, little reason to expect progress now. Path forward can only be found once the US accepts that there are no military options. US has shown no willingness to reach an understanding, little reason to expect progress now. Obliged to work to diplomacy, even when "hope of success is scant".
• Iranian President said that the US cannot blockade and threaten Iran but expect to have dialogue. Are preparing for dialogue whenever the US recognises their rights and stops threatening them.
• Houthi military spokesperson said "we did not launch any drones toward Medina, Saudi Arabia, on Wednesday".
• "The Houthi missile targeted the runway at Aden airport", Al-Hadath reported; Yemeni spokesperson confirms the attack.
• Pakistan Army Chief Munir, in his meeting with Iranian officials, brought with him the "final warning" from the United States, which called on Iran to submit to the American demand for concessions on the nuclear issue before taking any other steps. Otherwise, a "widespread attack" will be launched against it, specifically targeting its nuclear facilities at Mount Makosh.
• Explosions heard in proximity to Aden airport, Yemen, Sabereen reported; subsequent reported suggest this was targeting a Saudi camp.
• Saudi warplanes have launched airstrikes on the Houthis in Mocha, Al Araby reported.
• "Iraq closes the Al-Shaib border crossing with Iran to travelers, vehicles, and commercial trucks until further notice", sources say.
• Iran's Interior Minister said "Iran will continue its active diplomatic efforts to prevent the imposition of a new war".
• Iranian President said threats and sanctions must be removed in practice to pave the way for dialogue; We cannot increase the intensity of sanctions and pressure every day, close the avenues of interaction, and at the same time talk about negotiations. Dialogue with the language of threats and pressure is meaningless.
• UKMTO received a time late report of an incident 30NM southeast of Al Faw, Iraq; incident occurred on October 20.
• Iranian FM Araghchi presented a report to the members of the Cabinet on the latest status of consultations and negotiations held with delegations that had traveled to the country with the aim of finalizing the conclusions of the talks.
• Iraqi Oil Ministry Spokesperson said "oil exports from the Kurdistan Region are unstable and constantly fluctuating".
• UKMTO receives report of an incident 11NM west of Bukha, Oman.
• IRGC spokesperson said that the Strait of Hormuz is completely closed and we will not allow passage.
• "Four missiles were launched towards ships near Iraqi waters in the Persian Gulf", Naya reported.
• Several explosions have been heard in the Strait of Hormuz, Sabereen reported.
• Iraqi official said "Iraq has launched a mediation project between the warring Gulf states to reduce tensions in the region".
• Iranian FM Araghchi said "We have opened dedicated routes for ships carrying Iraqi oil to pass through the Strait of Hormuz in order to reduce Iraq’s losses".
• Iranian Parliament member Maliki said "Given the experience of past negotiations, there is no reason to renegotiate unless Pakistan uses its diplomatic capacity to force the US to implement the obligations of the Islamabad agreement".

NOTABLE NORTH AMERICAN NEWS

• US President Trump posted that he is watching data centres closely.

NORTH AMERICAN DATA

• US MBA 30-Year Mortgage Rate (Oct/16) 7.41% (Prev. 7.50%).
• US MBA Mortgage Applications (Oct/16) -5.3% (Prev. -2.7%).

A daily wrap of this kind functions as a session map rather than a signal, and its value lies in which threads recur across sections rather than any single print. The cross-currents here follow a familiar pattern: hawkish central bank commentary out of Australia and a firm UK inflation report both push front-end pricing toward tighter policy, while the dominant risk premium sits in energy, where crude reversed sharply on mixed Iranian signals, a sequence that has historically played out whenever headline diplomacy competes with explicit threats around the Strait of Hormuz. The OAT-Bund spread at its widest in well over a decade is the structural story, and episodes of French fiscal stress of this kind have tended to resolve through the legislative process rather than ECB intervention, consistent with the explicit pushback from ECB officials that monetary policy cannot cure it. The distinction worth drawing in the crude tape is between actual supply disruption, strikes on Gulf shipping and production sites, and rhetorical escalation, with the former historically sustaining premia and the latter fading quickly, as it did intraday here. What carries forward is the French budget vote, the November central bank meetings now priced as live hike decisions in both Australia and the UK, and whether the Iran track shifts from verbal rejection to physical disruption of transit.