Newsquawk European Market Wrap - 27th October 2026

Saudi Arabia's Ras Tanura refinery was reportedly hit by missiles, with the Houthis claiming the strike; Iran's Supreme Leader called for proposals outlining acceptable conditions to end the war. European bourses are mostly firmer; the FTSE 100 lags on disappointing HSBC earnings and Mercedes cut its FY26 guidance; US indices opened firmer, led by Tech. DXY holds above 102.00, fixed income contained, crude is flat after a choppy session, while spot gold reclaimed USD 4k/oz. EQUITIES European bourses (STOXX 600 +0.2%) rebounded as Tuesday's session continued, with the majority of indices set to close in the green. The FTSE 100 (-0.7%) was the outlier, as it held onto its earlier losses. The downside in HSBC (-6.0%) was the cause of the underperformance, after PBT and revenue missed estimates. Sectors were mixed. Basic Resources topped the sector pile, followed by Tech and Construction. Optimised Personal Care was the sector laggard, with Autos and Food, Beverages & Tobacco rounding out the sector laggards. Key movers include: Mercedes-Benz -3.4%, cut its FY26 guidance; Novartis +0.9%, adj. operating income and EPS beat while lifting its FY26 operating income guidance; BE Semi +10.5%, as Applied Materials plans to raise its stake to 20% (currently 9%); Reckitt -4.8%, lowered its FY26 core LFL net revenue guidance; Vistry +5.0%, appointed Helen Miles as CFO; UMG, reportedly considering going private. US cash equities opened mixed, with the NDX (+0.6%) outperforming as the session extends into the second hour of trade. Royal Caribbean (+7.0%) is gaining after it beat on profit and lifted its FY view, while Cintas (-6.3%) and UniFirst (-13.2%) are under pressure after Semafor reported that the FTC will block their merger. Focus turns to Seagate and Visa earnings after-hours, ahead of a busy slate tomorrow, which includes the FOMC policy announcement and earnings from Microsoft and Alphabet. FX DXY extended further above the 102.00 handle in the European morning, with currency-specific newsflow light as participants await this week's slew of risk events, including the FOMC, BoJ and ECB meetings, the UK Budget and Mag-7 earnings. US data was mostly firmer: Conference Board Consumer Confidence jumped to 91.7 (exp. 81), Durable Goods Orders rose 1.8% (exp. 1.5%), though the ex-Transport measure missed slightly (0.5% vs exp. 0.6%), and New Home Sales came in at 676k. Attention also turns to the Israeli election, with exit polls due at 20:00GMT/16:00EDT. EUR/USD extended beneath Monday's 1.1173 trough and trades at the bottom end of a 1.1135-1.1177 range, largely moving in tandem with the Buck. The ECB's Bank Lending Survey showed banks tightened Q3 credit standards for firms further. The ECB is widely expected to hold rates on Thursday. GBP/USD is a touch softer within a 1.3307-1.3349 range ahead of tomorrow's Autumn Budget. Earlier, BRC Shop Price Inflation ticked higher (2.1% vs exp. 1.6%), while The Times reported that Chancellor Healey will announce plans to raise the minimum wage by nearly 4%. EUR/GBP is a little lower around the bottom of a 0.8363-0.8377 range. USD/JPY climbed throughout the session and sits at the top end of a 157.42-157.93 range. Japan's FinMin Katayama said the government will respond to FX trade damage with a sense of urgency. Traders look ahead to the BoJ decision on Friday, but before that, the FOMC tomorrow. The Antipodeans outperformed after the surge in tech stocks overnight and with sentiment mostly higher; NZD/USD trades towards the top end of a 0.5671-0.5708 range, with money markets pricing an over 93% chance of an RBNZ hike tomorrow, while AUD/USD holds within a 0.7009-0.7038 band ahead of Australian CPI, also due Wednesday. USD/CAD is firmer within a 1.4009-1.4036 range. FIXED INCOME Overall, a somewhat contained European session for fixed income. Bunds saw some modest outperformance, peaking at 122.28 with gains of 23 ticks at best, before waning back towards the 122.00 figure towards the European cash equity close. Modest outperformance in Bunds, a function of the pullback in Dutch TTF, after it got to within a few euros of the EUR 100/MWh mark at the start of the week. Otherwise, the ECB BLS spurred no move, but points to a continued tightening of financial conditions and factors into thinking for the ECB on Thursday, where a hold is expected. USTs, by slight contrast, spent much of the day under modest pressure. Hit a 105-30+ base and hasn’t really moved from this, though only posted downside of a handful of ticks at that low. Specifics have been somewhat light as we count down to the Fed on Wednesday. Gilts opened with gains of just over 10 ticks, and then climbed to an 85.43 peak. Upside was driven by the minimum wage reporting being digested, as it mechanically provides Chancellor Healey with a significant headroom win. However, as crude picked up across the day, Gilts fell from best, and while WTI and Brent are currently flat, this has not allowed the benchmark to return towards its earlier best, and is set to end the pre-budget session relatively unchanged. Germany sold EUR 3.79bln 3.0% 2028 Schatz: B/C 1.3x (prev. 1.1x), average yield 3.08% (prev. 3.10%), retention 24.2% (prev. 24.6%). Italy sold EUR 2.0bln (exp. 1.5-2.0bln) 3.00% 2028 BTP: b/c 1.72x (prev. 1.64x), average yield 3.55% (prev. 3.64%). UK sold GBP 4.5bln 4.625% 2032 Gilt: b/c 3.51x (prev. 3.07x), average yield 5.026% (prev. 4.84%), tail 0.3bps (prev. 0.4bps). COMMODITIES Crude benchmarks have been choppy throughout the session. Prices initially dipped in the APAC session, then climbed in early European trade after Iranian state media IRIB reported that Saudi Arabia's Ras Tanura refinery (550k BPD) was targeted by missiles. The Houthis later claimed they struck the refinery with a ballistic missile, causing major fires. The complex saw a brief knee-jerk lower after Iran's Supreme Leader called for proposals outlining acceptable conditions to end the war. WTI Dec'26 ultimately traded softer within a USD 100.08-102.82/bbl range, while Brent Jan'27 is subdued within a USD 109.26-111.91/bbl range; both near Monday's lows. Dutch TTF is lower by c. 1.5% within a EUR 93.40-96.70/MWh range, after Monday's gains. Qatar extended force majeure on LNG cargoes to Italy's Edison until the end of December, while at the GECF summit in Moscow, Russian President Putin said global gas prices have risen sharply but could also fall sharply. Spot gold climbed back above the USD 4,000/oz mark in the afternoon and now trades firmer at the top end of a USD 3,989-4,038/oz range. Spot silver is little changed within a USD 52.67-54.23/oz range. 3M LME Copper is firmer by c. 0.5% within a USD 14,322.18-14,500.83/t range. Russian President Putin said Russia should avoid going too far with the green agenda and must consider ending the ongoing conflict and lifting sanctions. Tanzania announces discovery of 23bcf of estimated natural gas reserves in Mnazi bay. Russian President Putin said global gas prices have risen sharply but could also fall sharply, RIA reported; Putin proposes that gas-exporting countries cooperate to optimise fuel supply routes, TASS reported. Senior Ukrainian official said the ceasefire in Oleshky will last until November 1st. Russian Deputy PM Novak said a fourth tanker carrying Russian diesel is expected to arrive in the US on October 28th, Interfax reported; said Russia can reroute and sell all its gas supplies elsewhere if Europe rejects them, TASS reported. Qatar extends force majeure on LNG cargoes to Italy's Edison (EDNR IM) until the end of December, Reuters reported. OPEC+ is reportedly expected to maintain December oil production targets at Sunday's meeting, sources say. Iranian President Pezeshkian and the Emir of Qatar discussed expanding political, economic, and energy cooperation and strengthening coordination among gas-exporting countries. Saudi Arabia's Ras Tanura refinery (550k BPD) was reportedly targeted by missiles, triggering powerful explosions and large plumes of smoke, Iranian state media IRIB reported, citing Arab media. EUROPEAN DATA European Loans to Households (Sep YY) 3.1% vs. Exp. 3.1% (Prev. 3.1%). European M3 Money Supply (Sep YY) 3.5% vs. Exp. 3.4% (Prev. 3.5%). European Loans to Companies (Sep YY) 4.2% (Prev. 4.2%). Spanish Unemployment Rate (Q3) 10.18% vs. Exp. 9.9% (Prev. 9.87%). French Consumer Confidence (Oct) 80 vs. Exp. 85 (Prev. 85). Swedish Trade Balance (Sep) 4.10B (Prev. -11.90B). Swedish Household Lending Growth (Sep YY) 3.4% (Prev. 3.3%). NOTABLE HEADLINES UK is considering new requirements for data centre developers to invest within local communities, FT reported citing sources; measure could be made public during the budget. TRADE/TARIFFS Japan said it will impose anti-dumping duties on cold-rolled nickel stainless steel strips and sheets from China and Taiwan. CENTRAL BANKS US Richmond Fed Services Revenues Index (Oct) 2 (Prev. 0). US Richmond Fed Manufacturing Shipments Index (Oct) 0 (Prev. -5). US Richmond Fed Manufacturing Index (Oct) -2 vs. Exp. 0 (Prev. -2). ECB October Bank Lending Survey: Eurozone banks report further tightening of Q3 credit standards for firms (net 9%) and consumer credit (14%); Gradual but sustained increase in demand for loans to finance AI infrastructure. CNB's Seidler said a 25bps rate hike in November is likely, with the November inflation outlook likely to be revised higher. Domestic demand remains resilient and energy prices are elevated, while global economic uncertainty warrants a meeting-by-meeting approach to monetary policy. BCB said the economy has been expanding at a more moderate pace, and the labour market remains hot, but some indicators show signs of cooling. There are no major risks to financial stability. GEOPOLITICS RUSSIA-UKRAINE Russian Foreign Ministry said Japan must abandon its unfriendly policies towards Russia to restore dialogue, RIA reported. Russian President Putin is looking to meet with the leaders of Finland and Norway, reports suggest. Russian Defence Ministry said Russian forces struck a cargo ship in the Black Sea and an industrial facility producing drones in Kyiv, according to IFX. MIDDLE EAST Yemeni Houthis claim to have struck Saudi Arabia's Defence Ministry in Riyadh with a ballistic missile. Saudi fighter jets attack Bab al-Mandab, reported Tasnim. Iranian Supreme National Security Council Secretary Rezaei meets Yemen's ambassador. US CENTCOM rejects Iranian IRGC Navy claims that US forces have withdrawn from the Strait of Hormuz, saying US forces remain present and that the US and its regional partners control the waterway. Houthis say forces repelled an advance by Saudi-backed forces, under the command of Saudi officer Badr al-Harbi, from the southern direction of Bab al-Mandab. Violating oil tanker catches fire after hitting a mine in the eastern Strait of Hormuz, reported Irib. Saudi Civil Defence said the danger has passed in Riyadh. Explosions reported in Riyadh, Saudi, Naya reported. Saudi crude exports reportedly exceeded 7mln BPD in the first 22 days of October, returning to pre-war levels and suggesting production has risen towards 9-10mln BPD, Bloomberg's Javier Blas reported, citing Vortexa data. Another explosion was reportedly heard in eastern Baghdad's Al-Rasafa district, Iraq, Sabereen News reported. Houthi military spokesperson claims Yemeni forces struck Saudi Arabia's Ras Tanura refinery (550k BPD) earlier today with a ballistic missile, causing major fires at the facility. Iran's Supreme Leader called for proposals outlining acceptable conditions to end the war. Stressed the need to tighten control over the Strait of Hormuz in discussions with Rezaei. Stressed the importance of relations with neighbouring countries based on mutual interests. Yemeni Houthi forces reportedly launched a ballistic missile from south of Yemen's Sana'a, Al Hadath reported, citing sources on the ground. Qatar's foreign ministry said the Qatari delegation's Tehran visit continues mediation efforts, Al Jazeera reported; Iran needs to show good intentions and cease the threats against the Arab states. It also needs to open up Hormuz for mediation efforts to succeed. Iran has reportedly informed Hezbollah that it does not want the group to participate in any future war, Al Arabiya reported, citing sources close to Hezbollah. Explosions were reportedly heard in Saudi Arabia's Najran and Abha, as well as at Khamis Mushait Air Base, Fars reported, citing Arab sources. Saudi Civil Defence said the danger has passed in Najran, Abha and Khamis Mushait. Yemeni attack targets Abha and Khamis Mushait, in Saudi Arabia, Sabereen reported. Saudi Civil Defence said an emergency alert has been issued in Najran over a potential threat, urging residents to follow safety instructions. Iranian Supreme National Security Council Secretary Rezaei said the US has failed to provide security guarantees to regional countries, adding that security in West Asia must come from within the region without foreign intervention, Tasnim reported. Iranian President Pezeshkian meets Qatar's Emir on the sidelines of the Gas Exporting Countries Forum summit in Moscow, Tehran Times reported. Saudi Arabia contained the fire near the Ras Tanura oil hub following an attack, reports suggest. Houthi official said Egypt's parliament authorising military support for Saudi Arabia amounts to a declaration of war against Yemen, AFP reported. Iranian Ambassador to South Korea said Iran has proposed a seven-day plan to the US and is preparing a response to US feedback; adds that Iran does not want war and seeks to reduce tensions through diplomacy, ISNA reported. Said that the Strait of Hormuz would reopen on the sixth day if Washington accepts the conditions, with negotiations beginning on the seventh day. IRGC Supreme Leader's representative warned that Iran knows the enemy's vulnerabilities and would deliver a more devastating response than before if attacked again. Adds that Iran's resistance has strengthened and the country will never cooperate with its enemies. Saudi Civil Defence said the Najran danger has passed. Iran, Russia and Azerbaijan are discussing a trilateral energy agreement to finalise a gas swap arrangement, with Iran's Acting Oil Minister expecting an imminent deal alongside new Russian investments in Iranian hydrocarbon fields, Press TV reported. Saudi Civil Defence issues an early warning for Najran; thereafter, reports of sirens in the region. Iranian government spokesperson said Iran is prepared for all scenarios, SNN reported. Explosions were reportedly heard at Prince Sultan Air Base in Saudi Arabia, while Saudi Civil Defence said sirens sounded in Al-Kharj and the Eastern Province, ISNA reported. Lebanese sources say Israeli military targets Wadi al-Saluqi with artillery, according to Al Alam. NORTH AMERICAN DATA US New Home Sales (Sep MM) -0.6% (Prev. 6.4%). US New Home Sales (Sep) 676K vs. Exp. 651k (Prev. 684K). New home supply 8.4 months' worth at current pace (prev. 8.5 months' worth in Aug). Homes for sale 0.476mln units (prev. 0.481mln units M/M). US CB Consumer Confidence (Oct) 91.7 vs. Exp. 81 (Prev. 84.2). Consumers' average 12-month inflation expectations declined in October but remained elevated at 5.8%. US House Price Index (Aug) 444.6 (Prev. 443.2). US House Price Index (Aug YY) 2.4% (Prev. 2.5%). US S&P/Case-Shiller Home Price (Aug MM) -0.4% (Prev. 0.0%). US House Price Index (Aug MM) 0.3% vs. Exp. 0.2% (Prev. 0.2%). US S&P/Case-Shiller Home Price (Aug YY) 2.7% vs. Exp. 2.5% (Prev. 2.5%). US Redbook (Oct/24 YY) 9.3% (Prev. 9.0%). US Non Defense Goods Orders Ex Air (Sep) 0.5% vs. Exp. 0.7% (Prev. 1.6%). US Durable Goods Orders Ex Transp (Sep MM) 0.5% vs. Exp. 0.6% (Prev. 0.3%). US Durable Goods Orders ex Defense (Sep MM) 2.2% (Prev. 0.3%). US Durable Goods Orders (Sep MM) 1.8% vs. Exp. 1.5% (Prev. 0.1%). US ADP Employment Change Weekly 16.8K (Prev. 18.5K). US Building Permits Final (Sep) 1.398M vs. Exp. 1.4M (Prev. 1.403M). US Building Permits Final (Sep MM) -0.4% vs. Exp. -0.2% (Prev. -2.1%). LATAM DATA Brazilian PPI (Sep YY) 4.34% (Prev. 2.50%). Brazilian PPI (Sep MM) 1.54% (Prev. 0.36%). Mexican Trade Balance (Sep) -0.606B vs. Exp. -0.4B (Prev. 0.605B). NOTABLE ASIA-PAC NEWS Japanese government expert panel discussed revision to three security-related documents, Kyodo reported citing sources; adding, "tax increases should not be ruled out as an option if necessary". Chinese Foreign Ministry said they are sending envoys to the Mideast to defuse tensions.