📆 Monday, October 7
► European equities erased earlier gains as geopolitical tensions in the Middle East continue to weigh on investor sentiment. The Stoxx 600 index dropped 0.25%, led by declines in the basic resources and chemicals sectors. Germany’s factory orders contracted by 5.8% M/M in August, while the UK’s Halifax House Price Index rose 4.7% Y/Y in September. Treasury yields in Europe also edged higher, with Germany’s 10-year yield rising to 2.25% (4 bps). Investors remain cautious as they monitor geopolitical risks and wait for key economic data releases. Eurozone retail sales were slightly weaker than expected in a year-on-year comparison (0.8% vs. 1% expected).
► US futures pointed to a lower open, following Friday’s rally driven by stronger-than-expected jobs data. The S&P 500 gained 0.9% last week, as the labor market report bolstered optimism of a “soft landing” for the economy. Goldman Sachs cut its recession probability to 15% following the positive employment data. However, sentiment is tempered by ongoing tensions in the Middle East, with attention turning to this week’s Fed minutes and consumer price index (CPI) report. Analysts expect inflation to have moderated in the third quarter, potentially influencing the Fed’s November interest rate decision.
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