Newsquawk European Market Wrap - 29th September 2026

• European bourses were broadly firmer today, as markets digested early hopes of US-Iran diplomacy.
• DXY continued rising despite falling energy and yields, with potential month end to keep in mind.
• Crude futures extended their downside as the session progressed amid further signs that US-Iran diplomacy remains alive.

EQUITIES

• European bourses were broadly firmer today, as markets digested early hopes of US-Iran diplomacy, even if the situation remains clouded by uncertainty. Nonetheless, pressure in the energy complex also lifted sentiment across bourses today.
• European sectors hold a positive bias. Tech held towards the top of the pile, whilst Energy was the unsurprising laggard. Movers today include: Airbus (-0.3%, Co. faces slower-than-expected deliveries in September, sources say), Hapag-Lloyd (+5.5%, Co. raises outlook for FY26, citing strong market demand and the ongoing positive development of spot freight rates), Lindt (-7%, issues profit warning), Julius Baer (+8%, FINMA concludes investigation).
• US equity futures are modestly firmer this morning, with mild outperformance in the NQ (+0.3%) vs ES (+0.1%). Key movers in the US today include: Jefferies (-0.6%, sharp decline in asset mgmt. rev. & weaker FI trading but saw record equity trading & IB rev. w/ a profit beat), Goldman Sachs (+0.5%, Board discussed replacing CEO David Solomon w/ President & COO John Waldron around end-2027 or 2028).

FX

• USD - DXY extended its upside through the European session, rising from an earlier 101.17 low towards session highs at 101.50 before finding resistence, also marking the high from the 29th July. The Buck continued to benefit from Friday’s hawkish Fed rhetoric and expectations for further tightening, despite the sharp pullback in oil and yields providing less support as the session progressed, but with potential month end flows to be mindful of.
• EUR - EUR/USD extended its downside as the Dollar strengthened, falling to a 1.1332 low from a 1.1374 high. Bloc-specific catalysts remained limited, leaving the pair primarily driven by broader USD action.
• GBP - GBP/USD similarly extended lower as the Buck strengthened, falling to a 1.3221 low from a 1.3258 high. UK-specific newsflow remained centred on the Labour conference, although price action was largely dictated by the Dollar.
• JPY - JPY gave back much of its earlier outperformance. USD/JPY initially fell to 156.98 following Mimura’s intervention-related rhetoric before reversing higher as the Dollar strengthened, within a 156.98-157.71 range.
• Antipodeans - Antipodeans underperformed, led by AUD following the RBA and Governor Bullock’s more dovish-than-usual presser. AUD/USD fell to a 0.6978 low from a 0.7029 high, while NZD/USD similarly declined within a 0.5642-0.5677 range.
• CNH - CNH was modestly firmer overall despite some weakness after the PBoC cut its one-year PSL rate by 25bps to 1.50% and expanded support for technology and infrastructure financing. USD/CNH briefly moved higher on the announcement before reversing the move.

FIXED INCOME

• Global fixed benchmarks started the London session with mild gains and have continued to trend higher as the day progressed; upside facilitated by US-Iran diplomacy optimism and cooling energy prices. Nonetheless, yields remain near multi-decade highs, with the US10yr holding around 5.25%.
• USTs (+1+ ticks) spent the session with only mild gains, as focus remains on the uncertain geopolitical environment and as markets await a slew of Fed speak later today. Bunds (+45 ticks) gradually moved higher throughout the day, taking bullish leads from cooling energy prices; a couple of ECB appearances and data points had little impact on the benchmark.
• Gilts outperformed early doors as markets awaited the PM Burnham speech, which is currently ongoing at the time of writing; some volatility was seen after Burnham announced that the pension will rise by either prices or 2.5%, becoming a double lock.
• BBVA (BBVA SM) files to sell USD-denominated noted; yield guidance seen at 8.6%.
• The Netherlands sold EUR 5.99bln (exp. 5.0-6.0bln) 3.75% 2048 DSL.
• Italy sold EUR 6.5bln (vs exp. EUR 5.5-6.5bln) 3.95% 2032 and 4.00% 2036 BTPs. 3.95% 2032 BTP: b/c 1.54x, average yield 4.08%. 4.00% 2036 BTP: b/c 1.56x (prev. 1.62x), average yield 4.58% (prev. 4.10%).
• UK sold GBP 4.25bln 4.875% 2036 Gilt: b/c 3.34x (prev. 3.65x), average yield 5.383% (prev. 5.155%), tail 0.5bps (prev. 0.1bps).
• Deutsche Telekom (DTE GY) files to sell EUR 1.5bln three-parter.

COMMODITIES

• Crude - WTI Nov and Brent Dec futures extended their downside as the session progressed amid further signs that US-Iran diplomacy remains alive. Qatar said mediation efforts were ongoing and focused on building common ground between Washington and Tehran, while Iran said its seven-point plan had been shared with the US via Qatar and mediators were reportedly working towards an understanding that could revive the Islamabad agreement. Nonetheless, this morning, Iran reiterated that if it cannot sell oil, no one in the region will sell oil, while VP Vance said Iran must abide by the rules for any agreement to be reached. WTI fell to a USD 90.13/bbl low from a USD 94.74/bbl high, while Brent fell to a USD 95.85/bbl low from a USD 100.28/bbl high.
• Natural Gas - Dutch TTF extended its downside alongside the broader energy complex as hopes of diplomatic progress reduced some of the Middle East supply-risk premium. TTF fell to a EUR 69.01/MWh low from a EUR 73.10/MWh high.
• Precious Metals - Precious metals recovered from earlier lows as the sharp pullback in energy prices provided some relief from inflation concerns, although the firmer Dollar continued to cap upside. Spot gold rebounded from a USD 4,113.60/oz low to a USD 4,161.28/oz high. Spot silver similarly recovered from a USD 60.30/oz low to a USD 61.08/oz high.
• Base Metals - Base metals remained softer despite the pullback in energy, with the firmer Dollar and subdued broader risk tone continuing to weigh. COMEX copper traded within a USD 6.58-6.65/lb range. 3M LME copper resided in a USD 14,386.00-14,518.20/t range.
• Investment at Venezuela's Bare oilfield estimated at USD 7bln and production could reach 90k BPD by 2038.
• Oman plans to more than double oil storage capacity at Duqm; Oman OQ mulls buying two supertankers for floating storage.
• IEA's Birol said another oil stock release is not at the top of the agenda.
• ECB's Escriva said Spain is not considering moving its gold reserves.
• Iran said it has discussed expanding energy trade with Azerbaijan.
• Lufthansa (LHA GY) expects jet fuel prices to rise about 18%, increasing its costs by roughly EUR 1.5bln.
• Italy's Energy Minister said he will speak with US Energy Secretary Wright is to seek clarification on a possible US diesel export ban.
• Gas production in Iran's South Pars Phase 11 reaches 1bln cubic feet, IRIB reported.
• Iraqi Oil Ministry announces the start of trial operations for the storage capacity project at the Nasiriyah gas depot, INA reported.
• EU Energy Commissioner Jorgensen said they do not want to relax methane rules, but rather to delay their implementation.
• Spanish Energy Minister said that Spain, Portugal and Luxembourg sent a letter to the Commission asking for a new renewable energy capacity. Spain wants the EU to consider measures to capture windfall profits from high energy prices. Spain is still waiting for a response to the proposal. Spain wants a permanent levy on the oil and gas industry to raise climate funds.
• UK PM Burnham says UK will adjust pension triple lock promise in 2030; pension will rise by either by inflation or 2.5%, it will become a double lock, with wages taken out.

EUROPEAN DATA

• Spanish Business Confidence (Sep) -1.6 (Prev. -3.8).
• Spanish Core CPI Prel (Sep YY) 3.1% (Prev. 2.9%).
• Spanish Retail Sales (Aug MM) 0.3% (Prev. -0.9%).
• Spanish HICP Preliminary (Sep MM) 0.6% (Prev. 0.7%).
• Spanish CPI Prel (Sep MM) 0.3% (Prev. 0.7%).
• Spanish Retail Sales (Aug YY) -0.4% (Prev. -0.3%).
• Spanish HICP Preliminary (Sep YY) 5.0% (Prev. 4.6%).
• Spanish CPI Prel (Sep YY) 4.9% vs. Exp. 4.7% (Prev. 4.3%).
• French Unemployment Benefit Claims (Aug) -61.3K (Prev. 21.5K).
• French Jobseekers Total (Aug) 3081.7K (Prev. 3143K).
• Italian PPI (Aug MM) 2.4% (Prev. 2.3%).
• Italian PPI (Aug YY) 10.9% (Prev. 7.8%).
• Italian Industrial Sales (Jul YY) 4.8% (Prev. 3.1%).
• Italian Industrial Sales (Jul MM) 0.60% (Prev. -1.00%).
• European Selling Price Expectations (Sep) 20.3 (Prev. 16.9).
• European Industrial Sentiment (Sep) -3.8 vs. Exp. -4.7 (Prev. -5.0).
• European Services Sentiment (Sep) 6.1 vs. Exp. 6.5 (Prev. 5.6).
• European Consumer Confidence Final (Sep) -16.5 vs. Exp. -16.5 (Prev. -16.5).
• European Consumer Inflation Expectations (Sep) 35.2 (Prev. 33.0).
• European Economic Sentiment (Sep) 97.9 vs. Exp. 99 (Prev. 98.4).
• UK Net Lending to Individuals (Aug MM) 6.874B vs. Exp. 6.2B (Prev. 6.300B).
• UK BoE Consumer Credit (Aug) 2.464B vs. Exp. 1.9B (Prev. 2.097B).
• UK Mortgage Lending (Aug) 4.41B vs. Exp. 4.4B (Prev. 4.08B).
• UK Mortgage Approvals (Aug) 54.92K vs. Exp. 56.1K (Prev. 55.93K).
• UK M4 Money Supply (Aug MM) 0.4% vs. Exp. 0.1% (Prev. -0.3%).
• Swedish Consumer Inflation Expectations (Sep) 6.3% (Prev. 6.8%).
• Swedish Consumer Confidence (Sep) 102.2 (Prev. 98.4).
• Swedish Business Confidence (Sep) 109.3 (Prev. 107.5).
• Swedish Economic Tendency Indicator (Sep) 107.1 (Prev. 105.1).

NOTABLE HEADLINES

• UK PM Burnham said he is putting the country on a new path, with a new economy. Nationalisation:. Burnham talks about things that went wrong, “homes, water, energy, transport, care - broken up and sold off”. Wants more control of the basics. Government will present a strengthened water bill to parliament to repeal the ban on public ownership of water companies. Energy:. Wants cost of energy to be in-line with peers within 10 years. We will be pragmatic when it comes to the North Sea. Will draw up a national energy plan. You will see VAT disappear off electricity bill on Thursday. Housing:. Will give councils the power to make compulsory purchases of empty homes. Fiscal:. Have to be honest about what the country can do within fiscal rules. Social Care:. Need a social care service and will build one.
• EU-wide digital levy could raise up to EUR 25.2bln annually for the bloc’s next long-term budget, according to European Parliament estimates cited by an MEP.
• EU Court of Justice dismisses Poland’s application to suspend the EU Council’s decision authorising provisional application of the EU-Mercosur agreement.
• IEA Chief Birol said Europe is one of the regions most exposed to the degrading diesel market, which the IEA is monitoring closely. IEA will discuss with member governments whether more strategic reserve releases are needed. IEA is discussing the situation with countries.

TRADE/TARIFFS

• Chinese Vice Premier He Lifeng said China welcomes Japanese companies to develop in China and share market opportunities, Xinhua reported.
• Nvidia (NVDA) and AMD (AMD) are lobbying US President Trump's administration to stop lawmakers from curbing exports to China, Politico reported citing sources; asking that lawmakers hold off on the China-related chip export restriction in the defence bill. The legislation in question has bipartisan support.

CENTRAL BANKS

• ECB's Escriva said we are still not in restrictive territory; what I would start to worry about is the global upward trajectory of long-term rates; this can add pressure to interest rates. High energy prices are concerning if they persist and trigger second-round effects.
• ECB’s Kazimir said the rate hike was unavoidable, energy prices remain a key factor, and January repricing will be key for him; ECB needs flexibility, it has enough time.
• RBA Governor Bullock said inflationary pressures to last longer than expected; inflation is driven by domestic capacity pressures; Board will raise rates again if needed. Will not put too much emphasis on the August CPI number. If inflation comes down, then it's possible no more hikes are needed. She hopes four rate hikes will be restrictive enough to slow inflation. Confident the RBA will get inflation back down.
• PBoC cut the mortgage-supplementary lending rate (PSL) by 25bps, lowering the one-year PSL rate to 1.50% (prev. 1.75%). The central bank said the reduction aims to better incentivize policy banks to support the real economy and national strategic priorities. To include construction of six networks — water networks, new-type power grids, computing power networks, next‑generation communications networks, urban underground pipe networks and logistics networks — and will guide policy banks to step up financing for these projects to help expand effective investment and deepen domestic demand. Raises the re-lending quota for tech innovation and technological transformation by CNH 200bln to CNH 1.4tln and increases the facility's support ratio from 60% to 100%, aiming to steer banks to expand lending to SME tech firms and to support corporate equipment upgrades.
• Hungary Central Bank Deputy Governor said Hungary paused rate-cut cycle on worsening market risks. CPI expectations have consolidated but further efforts are still needed.

GEOPOLITICS

MIDDLE EAST

• US VP Vance said Iran must abide by the rules for any form of agreement to be reached.
• Israeli PM Netanyahu said there are indications that Israel’s enemies will attack before the Israeli elections (27th October), Al Arabiya reported.
• Iran said it has discussed expanding energy trade with Azerbaijan.
• Iran's Ghalibaf reiterates that America should know that in a region where we don't sell oil, no one will sell oil. If our security is not ensured, no infrastructure will be safe.
• Rosatom and Iran discuss options to build new nuclear plants, reported Tass.
• Iranian Foreign Minister said Tehran’s seven-point plan was shared with Washington via Qatar and Iran is awaiting an official US response.
• IAEA Chief Grossi said there are no full-fledged negotiations between the US and Iran yet, but informal contacts are taking place, RIA reported.
• Israeli officials told Channel 12 that a large-scale operation in the Gaza Strip is inevitable, Al Hadath reported.
• Gas production in Iran's South Pars Phase 11 reaches 1bln cubic feet, IRIB reported.
• IRGC reiterates that Iran will never seek a nuclear weapon, Al Jazeera reported; reiterates conflict takes a different form and will bring new weapons to the field. Most of the American bases in the region have been destroyed and can no longer be used again.
• Iranian Parliament Speaker Ghalibaf said if Iran cannot sell oil, no one in the region will sell oil, and warns that if Iran’s security is not ensured, no infrastructure will be safe, ISNA reported.
• Houthis reportedly attacked oil facilities in Yanbu on the Red Sea with a large number of ballistic missiles and drones; satellites showed several giant oil storage tanks at the Al-Mu'ajiz terminal in southern Saudi Arabia ablaze, Al Akhbar reported. According to an economic source close to the Ansar Allah movement, who spoke to Al-Akhbar, Sana'a forces have designated Aramco assets in Jizan, Najran, and Yanbu, valued at USD 100bln, as legitimate targets in the current round of fighting. This phase will be followed by the addition of strategic facilities of equal importance to Aramco's to their target bank.
• N12's Lipkin reported that the commander of Hama's northern Gaza Strip brigade was "eliminated".
• Intelligence sources say that Houthis expand target bank in Saudi Arabia, according to ILNA.
• Israeli PM Netanyahu said there are indications that Israel’s enemies will attack before the Israeli elections (27th October), Al Arabiya reported.
• IRGC Spokesperson said US ships have fled 500km from the Strait of Hormuz.
• Mediators are working on an American-Iranian understanding that paves the way for reviving the Islamabad agreement, reported Al Hadath citing diplomatic sources. Communication channels between Washington and Tehran "remain open.".
• Qatari spokesperson said efforts are currently focused on building common ground between the American and Iranian sides; Qatari mediation efforts are ongoing, and we see no solution other than a peaceful one; Exchanging messages, possible solutions.
• Saudi Civil Defense issued an alert in Najran region to warn of danger; but danger has since passed.
• UKMTO noted of a report in the evening of September 28th; said a vessel was struck by an unknown projectile in the Strait of Hormuz; vessel is underway after a resulting fire was extinguished, with the crew safe.
• Iranian spokesperson Mohabi said they do not fear war, and are not running from negotiations.
• An explosion was reported in the Strait of Hormuz, which is said to be a commercial ship attempting to pass through the southern route of the Strait, Fars reported citing Ambrey.

RUSSIA-UKRAINE

• US President Trump backs Russia sanctions relief on prisoner release, Atlantic reported; Trump expressed support for the plan a few months ago. It would create a path for the US to sign lucrative deals involving Russian oil, diesel, rare earth minerals, and other commodities.
• US official said Russian President Putin’s Envoy Dmitriev had ‘constructive’ meeting on Monday with US officials on peacefully resolving war in Ukraine; Discussed possible US-Russia energy initiatives after the war ends.
• Estonian official said Russia was behind an arson attack on defence maker Milrem Robotics.

OTHERS

• US Secretary of War Hegseth to announce 20% cut to Generals and Admiral positions, reported Fox.
• German Defence Minister Pistorius said Germany is planning to buy 16 A400M transporters from Airbus (AIR FP); order volume will be in the billions.
• Japan and US to hold large-scale joint military drills from October 19th for 11 days, involving seven nations and deploying 1,000km-range surface-to-ship missiles, NHK reported.

NOTABLE NORTH AMERICAN NEWS

• Wells Fargo downgrades S&P 500 Tech to Neutral from Favourable; upgrades Industrials sector to Favourable from Neutral. Cut Gold's 2027 year-end target range to USD 5,200-5,400/oz (prev. USD 5,400-5,600/oz). Forecasts 10-year US Treasury yield at 5.25%-5.75% by 2027-end (prev. 4.50%-5.00%).

NORTH AMERICAN DATA

• US S&P/Case-Shiller Home Price (Jul MM) 0% (Prev. 0.4%).
• US S&P/Case-Shiller Home Price (Jul YY) 2.5% vs. Exp. 2.2% (Prev. 2.2%).
• US Redbook (Sep/26 YY) 8.2% (Prev. 7.6%).
• House Price Index (Jul) 443.5 (Prev. 442.3).
• House Price Index (Jul YY) 2.6% (Prev. 2.3%).
• House Price Index (Jul MM) 0.3% vs. Exp. 0.1% (Prev. 0.0%).
• Canadian GDP Prel (Aug MM) 0.2%.
• Canadian GDP (Jul MM) 0.0% vs. Exp. 0% (Prev. 0.4%).