The dominant macro driver entering the week is the convergence of a hotter-than-expected US August core CPI print of 0.3% m/m — against a 0.2% consensus — and a fresh surge in crude oil, with Brent settling near $104.61/bbl on Friday after an intraday spike above $109 and further moves above $107 reported on Monday morning, driven by Hormuz and Red Sea supply disruption fears. US 2-year yields jumped 13 bp to 4.56% and the 10-year rose 12 bp to 4.95% on Friday, pricing Fed hike odds for the 16 September FOMC at 86–90%; the combination of sticky inflation and an energy shock is compressing the window for any near-term policy pivot, with a second Fed hike by December now priced in. The VIX fell 11.21% to 15.84 on Friday's equity recovery, but US futures are pointing lower this morning as oil reasserts and AI-sector concerns weigh.

For European investors, the cross-asset read-through is concentrated in energy costs, rates, and currency. The ECB's 25 bp hike on 10 September — lifting the deposit facility rate to 2.50%, effective 16 September — combined with staff inflation projections of 3.0% for 2026 and upward revisions through 2028, signals the ECB is in a tightening mode that mirrors, rather than diverges from, the Fed. German 10-year Bund yields bucked the US trend, falling 7.6 bp to 2.97%, possibly reflecting a flight to relative safety within Europe even as the ECB tightens, while TTF gas rose 4.05% to €82.51/MWh, directly pressuring chemicals names such as BASF — which fell 2.83% on Friday — and keeping EU Carbon ETS near €85.52/tCO2. EUR/USD slipped 0.21% to 1.161 and GBP/USD fell 0.32% to 1.3509, reflecting broad USD resilience as the DXY edged up 0.03% to 99.12, while EUR/GBP ticked 0.09% higher to 0.8594, suggesting the euro held marginally firmer against sterling on ECB hawkishness. Sectors most exposed this morning are energy-intensive industrials, chemicals, and rate-sensitive real estate, while banks and basic resources ended Friday as relative outperformers in the European sector table.