Newsquawk European Market Wrap - 19th October 2026

European bourses were broadly lower on French civil unrest and elevated Dutch TTF prices. DXY slightly firmer; Aussie outperformed on strong Chinese activity data, whilst CAD reacted to cooler Canadian CPI. A breakthrough is expected to be announced this week to halt the escalation between Washington and Tehran, Al Araby Al Jadeed reported citing a source. EQUITIES European bourses held onto their earlier losses, with all indices set to close in the red. Spain’s IBEX (-1.7%) is to be the underperformer, given its large number of banks. The downside across the European equity space is two-fold: 1) continued Russia-Ukraine strikes, and 2) protests across the EZ (Italy, Portugal, Spain, Belgium, France). Sectors maintained their negative bias, with Tech the only sector in the green. Banks was the clear laggard, followed by Autos and Utilities. Top stories include: DHL -1.7%, despite Q3 revenue beat and raised its FY26 guidance; Barclays -3.4%, the BoE’s PRA is examining potential misrepresented illiquid private credit loan exposures; EQT -1.5%, acquired Cleanaway Waste Management for AUD 3.095/shr; Fuchs -0.7%, despite a raise in its FY26 EBIT forecast. US cash equities opened entirely in the green, with outperformance in the NDX as it rebounds from last week’s tech-led selloff. With the US data docket light this week, focus turns to Tesla and Meta earnings on Wednesday. FX G10s were mixed against the USD. The Antipodeans held towards the top of the pile, with outperformance in the Aussie following on from better-than-expected Chinese activity data overnight. The JPY was the slight underperformer, on widening yield differentials and after PM Takaichi touted the use of debt issuance to fund the consumption tax cut, though this was later clarified by Chief Cabinet Kihara that it was in the context of the broader budget formulation. USD/JPY sat just above the 158.00 mark, within a 157.70-158.39 range, with markets on watch for potential jawboning. The EUR was also hampered amidst ongoing civil unrest, and elevated Dutch TTF prices. DXY was a touch firmer this afternoon, and traded within a 101.76 to 102.08 range. US specific newsflow was lacking throughout the day, with action ultimately to be dictated by geopolitical updates. On that note, Al Araby Al Jadeed reported that a breakthrough is expected to be announced this week, between the US and Iran; however, expectations remain tempered, given it suggested that concessions would likely be required. The Loonie also held towards the top of the pile, with initial outperformance stemming from President Trump touting a good deal with Canada, whilst BoC Governor Macklem suggested that high energy prices are boosting inflation risk. However, a cooler-than-expected CPI report tempered odds of a rate hike next week, with money markets now assigning a 68% chance of a hike (prev. 74% pre-release). Some mild pressure was seen in the Loonie, rising from 1.4079 to 1.4113, before paring back towards 1.4090. FIXED USTs began the day on the front foot, but waned marginally into the red as the pressure seen in peers continued, despite energy downside. Set to end the European day at the low-end of a 105-12+ to 105-25 band. Specifics were fairly light, aside from energy and geopolitical updates around Iran and Ukraine. More broadly, we count down to PCE towards month end. EGBs in focus, particularly OATs. Hit a 108.67 low, down by over a full point after the weekend’s significant protest activity in France and the widespread political dispute that has followed. Action that took the OAT-Bund 10yr yield spread to a high just shy of 145bps today, vs the recent 151bps peak. Widening, and unrest, that adds impetus to Moody’s on Friday. This was also seen across the EGB space, given spillover selling and protests in other nations. Gilts opened firmer, given the kneejerk from energy being lower by c. 1.50/bbl, but then swiftly disregarded this and fell into the red. A move that occurred as the region has similar fiscal/dissatisfaction themes that sparked the unrest seen in mainland Europe, and thus some spillover selling has occurred. Enough, as it stands, to send Gilts to an 84.20 low, off by around 50 ticks. Bank of NY Mellon (BNY) announces a dollar perpetual non-callable five. Wells Fargo (WFC) files to sell EUR-denominated 4-, 8-year noted. COMMODITIES Crude benchmarks were choppy throughout the session but are ultimately set to end the European session lower by c. 1.5%. The main catalyst for the downside was the easing of sanctions on Russian energy revenues. In response, Russia will initially supply over 300k tonnes of diesel. Fleeting downside also came amid reports that a breakthrough is expected to be announced this week to halt the escalation between Washington and Tehran, according to Al Araby Al Jadeed. WTI and Brent reside at the lower end of their USD 96.72-99.24/bbl and USD 104.05-106.65/bbl range respectively, heading into the US cash session. Dutch TTF earlier peaked at EUR 89.7/MWh, a level not seen since 2022. As the session continued, the European benchmark pulled back and is set to close near its session low of EUR 87.53/MWh. Precious metals lacked a clear direction to start the week, with spot gold contained in a USD 4155-4190/oz range. US data is light this week, with focus being on the Fed next week. 3M LME Copper found a bid at the start of the Asian session, reaching a peak of USD 14.48k/t, amid strong Chinese activity data, before falling to a low of USD 14.29k/t amid the broader risk-off tone. Qatar's Energy Minister is meeting with Iran's acting oil minister in Doha, where the pair will discuss energy cooperation. Iraq oil exports averaged more than 3.4mln BPD in October to date (vs. 3mln BPD in Sept.). Unite union warns that a 24-hour strike by oil workers in the North Sea could bring down the Forties pipeline, the Guardian reported. India's NMDC has reportedly delayed plans to develop overseas nickel mines and to acquire nickel assets, according to sources. ExxonMobil (XOM) discloses emission at its Joliet oil refinery (275k BPD). NOTABLE HEADLINES Sweden Parliament Speaker said it has asked Centre Party Leader to explore new government formation. US President Trump said France must close its borders as migrants take over. French PM said intelligence agencies have briefed of risk that extreme-left could seek to disrupt Presidential election. French PM said that if declaration of a state emergency is a necessary move, he would do that. French PM Lecornu has given permission for partial curfews to be implemented. Furlough measures available from Tuesday, for businesses impacted. Fully resolved to restore public order. ECB Elderson: "From climate and nature risks to economic resilience and competitiveness". "Building stronger resilience will require a proactive and comprehensive response that combines adaptation and mitigation with sustained investment, effective international cooperation and, above all, the resolve to act before risks fully materialise.". French President Macron refused to accept Interior Minister Nunez's resignation, BFM TV reported. TRADE/TARIFFS The US and Uzbekistan have signed a package of agreements worth USD 12bln. China's MOFCOM said they will further optimise procedures for screening and identifying export control queries on dual-use items. China's MOFCOM announces the tightening of export controls on specific drones, autopilots, engines, radios and related technologies, effective November 18. CENTRAL BANKS UBS expects the ECB to hike rates by 25bps in March 2027, following a December hike vs (prev. saw rates at terminal in December). PBOC Governor said the open market overnight reverse repo rate will correspondingly become the main policy rate; will pilot further facilitation of RMB purchases and sales by overseas financial institutions in the onshore foreign exchange market. The transformation of the monetary policy framework is a gradual and ongoing process, and the PBoC will continue to evaluate and improve it. PBOC Governor said that "we will launch a liquidity support tool for large scale redemptions by non-bank institutions". The PBoC will respond to market demand, enhance high-quality policy supply and promote yuan internationalisation. China will facilitate overseas financial institutions' participation in RMB trading in the domestic foreign exchange market. The PBoC will introduce additional policy measures, including expanding eligibility for standing lending facilities and promoting bond market connectivity. Swiss Weekly Sight Deposits (w/e Oct 16) Total: 457.01bln (prev. 456.39bln); Domestic 435.36bln (prev. 432.59bln). GEOPOLITICS RUSSIA-UKRAINE Russia's spokesman Peskov said the topic of a possible meeting between Russian President Putin, US President Trump and Chinese President Xi, was taken into account at the APEC summit in China, but no substantive proposals were put up. Ukraine's Foreign Minister said Russia, China and the US summit would only encourage Russian President Putin to continue the war. Ukrainian President Zelensky said Russia launched attacks on Kyiv overnight on energy facilities, Russian President Putin does not want to end this war. Did not receive a warning from partners on the Russian ballistic missile. China's Foreign Ministry Spokesperson said there is no information to share on any meeting between leaders of Russia, China and the US. Russian President Putin supports Mishustin's proposals for a cabinet reshuffle, Ifx/Tass. Russian Defence Ministry said that the Kyiv Locomotive depot was attacked, Interfax reported. Adds that a sea vessel with military and dual-purpose cargo was damaged 130km southwest of the Odessa port. Khimvolkno JSC plant was damaged in Kyiv. MIDDLE EAST Iran's Foreign Minister Araghchi said there is no military solution for the region's problems, they must be resolved through diplomacy. Chinese Premier said ready to advance exchanges and cooperation with Iran, Xinhua reported. Qatar's Energy Minister is meeting with Iran's acting oil minister in Doha, where the pair will discuss energy cooperation. IRGC Spokesperson said "if the region becomes unsafe for Iran, there will be no more security in the region" Fars reported. IRGC spokesman said does not have the capacity to create a new conflict, Tasnim reported. Most of America's bases in the region have been deactivated. Its forces are worn out and exhausted and are hundreds of kilometers away from Iran. Technically and militarily, America does not have the capacity to create a new conflict, but since the elections are near, they may want to make achievements. We do not ignore the possibilities and are prepared to respond, and this time our response will be much more severe. Even if America's action is limited, the world will face a serious energy crisis. "America has given Israel the green light to attack air defenses", Iraqi security sources say. US President Trump is reportedly mulling an attack on oil and military facilities in Iran's Kharg Island, ILNA reported citing UAE press. Full Post:. "A UAE media outlet, citing diplomatic sources, claimed that the US government is considering the option of attacking oil and military facilities on Kharg Island; a move that aims to force Iran to reconsider its positions on the nuclear issue and the Strait of Hormuz.". Iran's top general warned the US and Israel against further miscalculations, saying Iranian forces are ready to respond to any new decisions, Press TV reported. "The Yemeni armed forces warn everyone to evacuate Saudi mercenary military camps and move away from these locations", Fars reported. Saudi Civil Defense issues alert over potential danger in Najran; danger has since passed. "A breakthrough is expected to be announced this week to halt the escalation between Washington and Tehran", Al Araby Al Jadeed reported citing a source. Mediation efforts are ongoing to narrow the points of contention between the two sides and urge them to make mutual concessions to prevent a renewed war. A military source told Al-Akhbar that Sanaa will continue to deal with Saudi actions in the border areas; adds that foreign mercenary forces have come to carry out hostile missions, and they will become legitimate targets inside and outside the borders. Israeli PM Netanyahu said they are ready to strike at any moment, Sky News Arabia reported. The Japanese government plans to extend the Maritime Self-Defense Force's Middle East mission by one year to November 2027 to ensure the safety of Japanese-linked vessels, Kyodo reported. Qatar's Deputy PM and Minister of State for Defence Affairs said that they will unveil a partnership with regional entities to develop its defence capabilities, Al Araby reported. IRGC's Naghdhi said "any renewed US aggression will be met with an even more crushing response". NOTABLE NORTH AMERICAN NEWS US President Trump's Administration is removing DeepSeek from civilian government agency IT systems, barring purchase of DeepSeek-related products by government agencies. US White House NEC Director Hassett said inflation looks like it is needing some work, speaking on CNBC. Discretionary travel is a good sign for the economy. Travel and airfare spending is a good sign for the economy. Thinks GDP growth rate is near 4%. The US administration is reportedly preparing to impose financial penalties on Americans who default on their federal student loans in 2027, according to reported. US Secretary of State Rubio and Uzbekistan foreign minister agree to deepen cooperation on critical minerals. NORTH AMERICAN DATA BoC Core Measures, Average (Sep.): 2.0 (prev. 2.2%). Canadian CPI Common (Sep YY) 2.4% vs. Exp. 2.6% (Prev. 2.6%). Canadian CPI (Sep MM) 0.1% vs. Exp. 0.2% (Prev. -0.1%). Canadian CPI Median (Sep YY) 1.9% vs. Exp. 1.9% (Prev. 2.0%). Canadian CPI (Sep YY) 3.1% vs. Exp. 3.2% (Prev. 3.0%). Canadian Core CPI (Sep MM) 0.0% (Prev. 0.1%). Canadian CPI Trimmed-Mean (Sep YY) 1.8% vs. Exp. 1.9% (Prev. 1.9%). Canadian Core CPI (Sep YY) 2.2% (Prev. 2.4%).