MARKET WRAPS

Watch For:

Manufacturing PMI data for EU, U.K., France, Italy, Germany; EU unemployment; U.K. Nationwide House Price index; no major corporate events expected

Opening Call:

European stock futures traded lower early Thursday. Asian stock benchmarks were higher; the dollar rose; Treasury yields were flat; oil futures weakened and gold gained.

Equities:

Stock futures point to a lower open in Europe, at the start of the fourth quarter and bond yields surging.

Stocks weathered seasonal headwinds amid a surge in yields in September, as healthy economic data continued to signal a buoyant corporate earnings outlook, leaving investors satisfied with current valuations, said José Torres, senior economist at Interactive Brokers.

Investors are focusing on U.S. economic data this week amid the continuing Mideast tensions. Minneapolis Federal Reserve President Neel Kashkari said price pressures remain elevated after the latest batch of inflation data released Wednesday.

Kashkari's comments came after the Fed's preferred inflation measure, the personal consumption expenditures price index, rose by 3.4% over the past 12 months in August.

Forex:

Further euro weakness against the dollar isn't ruled out, said UOB's Global Economics & Markets Research. The steep decline of the euro versus the dollar recently hasn't yet stabilized, though the daily relative strength index is now at its most oversold since March 2026. "Deeply oversold conditions do not necessarily signal an imminent recovery."

However, the pace of any further weakness may begin to moderate, and "it remains to be seen whether the next technical target at 1.1215 is within reach during this phase of weakness," it added.

Bonds:

U.S. Treasury yields were unchanged. The 5% level on the U.S. 10-year Treasury yield was an important psychological threshold for investors, effectively marking the upper end of the range since the post-Covid period, said David Clewell, portfolio manager for multi-asset global income strategy at T. Rowe Price. Once a key technical level like this is breached, systematic and quantitative positioning can amplify the move and lead to further selling, he said.

Given the resilience of U.S. economic growth, there is a credible case for the 10-year Treasury yield to rise toward 5.5% to 6.0%, Clewell added.

Energy:

Oil prices edged lower on signs of rising crude exports from the Middle East. Exports from the Persian Gulf have been growing strongly over the past week, with some estimates putting the flows near levels before the U.S.-Iran conflict, ANZ Research analysts said.

Satellite tracking firm Kpler estimates that shipments reached 12.5 million barrels per day during the week ended Sept. 27, just 1 million barrels per day below the pre-conflict baseline, the analysts noted.

Metals:

Gold gained. The price action is "not so convincing," with sentiment remaining sluggish and prices struggling to sustain gains even after softer core PCE inflation lowered expectations for an October Fed hike, OCBC Group Research said.

Softer inflation alone may not be sufficient while the broader yield and oil backdrop remain unfavorable for gold. The focus for now remains on whether U.S. Treasury yields can find a peak, but the precious metal faces near-term pressure, it added.

Copper prices were flat as trading activity continues to ease, suggesting investor caution after their recent rally, Huatai Futures analysts said. With momentum losing steam and buying interest moderating, copper prices are expected to trade in a high range in the near term. China's weeklong National Day holiday is also likely to dampen trade in the region.

TODAY'S TOP HEADLINES

Fed's Kashkari Says Inflation Still Too High, Latest Data Didn't Change View

Minneapolis Federal Reserve President Neel Kashkari said price pressures remain elevated after the latest batch of inflation data released Wednesday.

Kashkari's comments come after the Fed's preferred inflation measure, the personal consumption expenditures price index, rose by 3.4% over the past 12 months in August. Despite revisions to PCE lowering the year-over-year trend, economists project the central bank will largely stay committed to achieving price stability on a timely basis.

Surging Yields Bring the Bond Market Back to the Turn of the Century

The bond market keeps turning back the clock.

Relentless selling pressure pushed the yield on the 10-year U.S. Treasury note above 5.3% Wednesday-blowing past its 2007 peak to reach its highest level since 2002, according to Tradeweb.

Europe's Luxury Carmakers Are Supersizing Their SUVs for Americans

BMW, Audi and other European carmakers are trying to revive their sales with a new generation of supersized luxury SUVs in America.

BMW is looking to make a supersized sport-utility vehicle specifically for the U.S., it told investors in Munich this week. Volvo Cars has said it would introduce a larger SUV in the U.S. as part of a major portfolio revamp. And Audi recently launched the Q9, its first full-size SUV, on the roof of a New York hotel.

U.K. Prime Minister Burnham Pitches an Unapologetically Socialist Makeover

LIVERPOOL-Just over two months into his tenure as U.K. prime minister, Andy Burnham is laying the groundwork for an unabashedly socialist overhaul of the British state.

This week, a tieless Burnham strode across the stage at his Labour Party's annual conference in Liverpool, delivering an emotional and upbeat pitch that eschewed the oft-repeated promises of short-term economic growth and instead focused on a long-term vision of big state intervention aimed at uniting Britain's political left wing.

Tech CEOs Privately Questioned Amodei for Sounding AI Alarm Bells

WASHINGTON-After agreeing to sign a statement of principles to keep artificial-intelligence models safe Tuesday, AI chief executives surrounded President Trump outside the White House to present the image of a unified industry addressing the public's fears.

Behind the scenes, industry leaders including Jensen Huang of Nvidia had just questioned Anthropic's Dario Amodei about his warnings about the dangers of AI, people familiar with the matter said.

Google Unveils New AI Model Gemini 4 Argon, Sending Alphabet Stock Higher

Google announced its newest artificial-intelligence model Wednesday, sending the tech giant's stock higher as it attempts to keep up with rivals in the race to build powerful AI models.

Google is rolling out the new model, dubbed Gemini 4 Argon, to a set of cybersecurity companies before making it available to developers, customers, and consumers at a later date.

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Expected Major Events for Thursday 00:01/IRL: Sep Ireland Manufacturing PMI

04:30/NED: Aug Retail turnover

05:00/NED: Sep Netherlands Manufacturing PMI

06:00/UK: Sep Nationwide House Price Index

06:30/SWI: Aug Retail Sales

06:30/SWI: Sep CPI

07:00/TUR: Sep Turkey Manufacturing PMI

07:00/POL: Sep Poland Manufacturing PMI

07:15/SPN: Sep Spain Manufacturing PMI

07:30/CZE: Sep Czech Republic Manufacturing PMI

07:30/SWI: Sep procure.ch Purchasing Managers' Index

07:45/ITA: Sep Italy Manufacturing PMI

07:50/FRA: Sep France Manufacturing PMI

07:55/GER: Sep Germany Manufacturing PMI

08:00/GRE: Sep Greece Manufacturing PMI

08:00/EU: Sep Eurozone Manufacturing PMI

08:00/ITA: Aug Unemployment

08:30/UK: Sep S&P Global UK Manufacturing PMI

09:00/EU: Aug Unemployment

10:00/POR: Aug Industrial production index

16:59/AUT: Sep Unemployment figures

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