Newsquawk European Market Wrap - 23rd October 2026

• European bourses were hit on the back of poor earnings from several key companies; US cash indices opened weaker.
• G10s were broadly lower against the USD; JPY and Kiwi fared a little better, whilst the CHF underperformed.
• Crude benchmarks moved higher as the geopolitical situation remains tense.

EQUITIES

• A softer end to the week for the vast majority of Europe, Euro Stoxx 50 -0.9% and Stoxx 600 -0.6%, as the US tech-led (SOX -6.7% on Thursday) pressure reverberated into the region, before being exacerbated by a set of dismal French data and poor earnings from several pertinent names.
• Focus on two earnings in Europe. Kering, -16%, after missing marginally on overall revenue, but more pertinently as they highlighted traffic as an ongoing constraint and particularly within China, not expecting a H/H margin performance and Q4 thus far has been in-line with Q3. Also hit, and at their lowest ever share price, Volvo Car, -26%, hit by a dire set of earnings where China revenue fell near 50% Y/Y.
• US cash bourses saw a weaker start to the day, lower by around -0.5% across the board, continuing the tone seen in peers into a packed week. Major movers include: Bloom Energy, -8%, amid margin concerns; SpaceX, +1.8%, in talks to access 80k US cell sites, benefitting Crown Castle, +12%; American Express, -2%, Beat and lifted guidance, but to cut 5% of its workforce.

FX

• G10s were initially mixed against the USD, but are set to end the London session mostly lower. The Kiwi fared a little better vs peers, after hawkish calls by analysts at ANZ, with the firm now pencilling in three more hikes by the RBNZ. To the downside, the Swiss Franc was the slight laggard on the back of widening yield differentials.
• DXY was a touch firmer today, and held within a 101.48 to 101.85 range; the peak for the day was a couple of pips short of its 21-DMA. Price action was lacklustre, with the index now looking towards next week’s FOMC announcement and PCE report.
• EUR was pressured following a dismal French PMI report, which surprisingly fell into contractionary territory. The EZ-wide figure held in expansionary territory, but did fall from the prior, with inflationary pressures to blame for the slowdown in October. Across the channel, the GBP digested cooler-than-expected Retail Sales, which underscored the Middle East situation and uncertainty heading into next week’s Autumn Budget. The UK’s PMI report was a little more upbeat, but price pressures remain a key concern.
• JPY fared a little better vs peers, taking positive impetus from a stronger-than-prior Japanese CPI report overnight, and a hawkish-leaning BoJ source report, which confirmed market expectations that the Bank could tighten in December. USD/JPY is set to end the London session around 156.79.

FIXED

• A mixed start for benchmarks, as the complex took a bit of a breather from the recent rally in core counterparts as growth concerns dominated the narrative for debt that is not focused on domestic political and fiscal concerns.
• USTs spent the morning lower by a handful of ticks. In a modest pullback from the 106-16 peak from Thursday, rather than in reaction to the energy and risk moves, though they may have influenced. A narrative that has remained the case across the session, looking to enter the US afternoon lower by a handful of ticks in 106-01 to 106-14+ parameters.
• Bunds in-fitting, in a c. 40 tick band. Upside was seen on the first set of PMIs this morning, with Bunds peaking on the German series at 122.54, and since falling back to gains of just a few ticks into the end of the main European day.
• OATs are, of course, the focus for today. This morning’s Flash PMIs were dire. All three main components fell into contractionary territory. A finding that does not bode well, as recent civil unrest and spread widening will not have been fully accounted for by the respondents. Further, we still await Moody’s verdict on the sovereign tonight, with a downgrade a real possibility given recent events and price action. A downgrade that could spark forced selling of French debt among the major holders.
• Nonetheless, given the scale of recent moves and likely some positioning into this evening, OATs are the relative outperformers, bid by around 25 ticks.
• Gilts marginally lag European peers within 84.84 to 85.36 parameters in a modest reversal of the prior day's action, limited move to the morning's retail metrics, and now looking to next week's budget.
• UK DMO said it is to hold tender for up to GBP 1bln of 0.25% Treasury Gilt 2031 on October 29.

COMMODITIES

• Crude benchmarks started the morning on a firmer footing, and gradually moved higher as the session progressed. Focus was on geopolitics, with no diplomatic progress between the US and Iran, ships continuing to be targeted in the Strait, and as Houthi-Saudi tit-for-tat strikes carry on.
• WTI is set to end the London session at the upper end of a USD 98.84-101.83/bbl range, whilst Brent is set to end stronger by USD 2/bbl within a USD 112.74-115.45/bbl range. Some pressure was seen after the US DoE authorised an emergency of exchange of up to 400k barrels of crude oil from the SPR.
• Spot gold remained within a thin USD 3,986-4,034/oz range, with price action relatively stable throughout the day, following the lacklustre action in the USD. Base metals were mixed; 3M LME copper traded with gains of c. 1% and held within a USD 14,059.2-14,319.63/t range.
• Algeria has instructed producers of urea fertiliser to stop supplying France, according to reported; France has raised Algerian trade curbs at EU level. Algeria’s urea export curb follows an informal ban on imports of French products since July.
• Global crude steel output falls 0.2% Y/Y, Worldsteel reported.

EUROPEAN DATA

• UK S&P Global Services PMI Flash (Oct) 53.1 vs. Exp. 51.8 (Prev. 52.1).
• UK S&P Global Manufacturing PMI Flash (Oct) 52.8 vs. Exp. 51.7 (Prev. 51.9).
• UK S&P Global Composite PMI Flash (Oct) 53.1 vs. Exp. 51.8 (Prev. 52.0).
• UK Retail Sales ex Fuel (Sep MM) -0.7% vs. Exp. -0.1% (Prev. 0.9%).
• UK Retail Sales (Sep MM) -0.4% vs. Exp. -0.1% (Prev. 0.7%).
• UK Retail Sales ex Fuel (Sep YY) 0.8% vs. Exp. 1.5% (Prev. 2.9%).
• UK Retail Sales (Sep YY) 0.8% vs. Exp. 1% (Prev. 2.7%).
• European S&P Global Services PMI Flash (Oct) 51.7 vs. Exp. 52.5 (Prev. 53.0).
• European S&P Global Manufacturing PMI Flash (Oct) 52.4 vs. Exp. 52.7 (Prev. 52.9).
• European S&P Global Composite PMI Flash (Oct) 51.9 vs. Exp. 52.7 (Prev. 53.1).
• German S&P Global Services PMI Flash (Oct) 51.7 vs. Exp. 52.5 (Prev. 52.9).
• German S&P Global Manufacturing PMI Flash (Oct) 54.2 vs. Exp. 53.5 (Prev. 53.9).
• German S&P Global Composite PMI Flash (Oct) 52.8 vs. Exp. 53.3 (Prev. 53.8).
• French S&P Global Composite PMI Flash (Oct) 48.4 vs. Exp. 50.5 (Prev. 51.1).
• French S&P Global Services PMI Flash (Oct) 48.4 vs. Exp. 50.7 (Prev. 51.2).
• French S&P Global Manufacturing PMI Flash (Oct) 49.3 vs. Exp. 50.5 (Prev. 50.6).

NOTABLE HEADLINES

• French Interior Ministry said the shooting on the 23rd of October is "clearly a terrorist crime".
• EU capitals moderate plans to help companies operate bloc-wide, FT reported.
• Germany is reportedly in talks around the purchase of thousands of missiles which are made in Europe.
• German spokesperson said an electricity tax cut is a possibility, but it will be dependent on the fiscal situation. Such a cut would hit the fiscal position by c. EUR 5bln.
• UK is expected to make a pre-budget announcement on an AI package on the weekend, Politico reported; Housing Secretary Rayner is booked for the Sunday media rounds, potentially indicating a Housing, Communities & Local Government related update.

TRADE/TARIFFS

• USTR proposes further suspension of Section 301 investigation into China's targeting of maritime, logistics, and shipbuilding sectors for dominance through January 9th, 2027.
• French Trade Minister has requested a US tariff exemption covering cognac and champagne.
• German President Steinmeier to visit China on the 27th of October.
• China's Commerce Ministry urges the US to correct its approach on research ties between the two nations.

CENTRAL BANKS

• BoJ is expected to continue rapid rate hikes, with focus on December, sources suggest; report suggests that interest rates are still far from neutral, adding that inflation needs to stabilise.
• BoJ Financial Stability Report: Japan's financial system has been maintaining stability on the whole. In the loan market, financial intermediation has continued to function smoothly as firms' demand for loans has continued to rise and banks' lending stance has remained active. Under these circumstances, no major financial imbalances have been seen in current financial activities.
• ECB's de Cos seen as the most likely to succeed ECB President Lagarde, Bloomberg's survey shows; Knot is in second place.
• European ECB Consumer Inflation Expectations (Sep) 3.1% (Prev. 3%).
• Former German Finance Minister Kukies is said not to succeed Schnabel at the ECB.

RUSSIA-UKRAINE

• White House said First Lady Melania Trump successfully secured a ceasefire between Russia and Ukraine, localised to the city of Oleshky. White House said Russia and Ukraine agreed to temporarily stop all military action in Oleshky to allow humanitarian aid to enter and to prepare a civilian evacuation through a designated safe passageway; ceasefire will begin on October 29th.
• Russia's Defence Ministry said Russia hit a railcar depot in the Poltava region in Ukraine and a cargo vessel in the Black Sea, while it also hit the Port of Vilkovo in the Odesa region.

MIDDLE EAST

• While Washington continues to exert economic pressure on Tehran, an American media report said that the US is considering a scenario of several days of attacks on Iran; a scenario that includes missile, drone, energy and nuclear facilities, ILNA reported.
• US representative at UN said it is possible US will be stuck in a deadlock with Iran for another year, IRIB reported.
• Reports of an explosion in Sanaa, Yemen, Sabereen outlines.
• Saudi Arabia has launched a "raid" on eastern Taiz within Yemen, Sabereen reported.
• UAE's Sharjah has temporarily closed Al Hamriyah Beach as a precaution after oil spill from a tanker.
• A US E-3 aircraft has arrived in Sulta, Saudi Arabia, Sabereen reported.
• "Missile launch by the Yemeni Armed Forces towards Saudi interests", Sabereen reported.
• IRGC official said "today we not only possess power but also the will to use power"; "if the enemy wants to commit the slightest folly again, we will deliver an unprecedented blow", Al Mayadeen reported.
• IRGC official said "traffic of violating vessels in the Strait of Hormuz has been completely stopped", Fars reported. "An informed official close to the IRGC Navy announced that after the destruction of the navigational aid systems used by the violating vessels, the hitting of 3 oil tankers yesterday and the destruction of another violating oil tanker last night, the traffic of violating vessels has been completely stopped". "This informed official warned that if oil smuggling resumes, the dealing with violating vessels and their supporting technical systems will be carried out with much greater severity". "He also emphasized that the renewed air intervention of the US military and support for oil smuggling will be met with a more direct and decisive response, and the US military will be responsible for the consequences".
• Israeli PM Netanyahu said "I have instructed the security forces to impose a siege on the city of Hebron and to completely close off the West Bank".

US DATA

• US S&P Global Manufacturing PMI Flash (Oct) 56.0 vs. Exp. 55.5 (Prev. 55.9)
• US S&P Global Composite PMI Flash (Oct) 57.6 (Prev. 58.4)
• US S&P Global Services PMI Flash (Oct) 57.9 vs. Exp. 58 (Prev. 58.8)

A session wrap of this kind is a digest rather than a catalyst, and its value is in the threads it ties together for the week ahead. The dominant live risk flagged is the pending sovereign rating verdict on France: in past episodes where a major agency decision loomed into a weekend, spreads into the event have reflected positioning and positioning unwinds, and the historical sequence has been that an actual downgrade matters less for its informational content than for the mechanical response of mandate-constrained holders, with the spread outcome hinging on how much of the move was pre-traded. The crude complex is carrying a geopolitical premium of the classic kind, where supply-disruption headlines around a chokepoint tend to lift prompt spreads and freight and insurance costs ahead of flat price, and where strategic reserve releases have historically capped rather than reversed such moves. Earnings dispersion of the sort seen in European luxury and autos fits the established pattern of China-exposed names de-rating on traffic and regional revenue misses, with the peer set typically trading as a basket on the read-through. The calendar into next week, a major central bank decision, a key US inflation print, and a UK fiscal event, is the kind of clustering that has tended to compress conviction and keep ranges contained until the first of the events lands. The central bank thread, hawkish source reports out of Japan against soft European survey data, is the familiar divergence setup that expresses itself through front-end differentials rather than through any single day's fixings.