BANKSEuropean banks (EXV1.DE, -3.33%) hit a three-month low on Thursday as rising sovereign yields — the German 10-year jumped 11bp to 3.18% — and French fiscal stress compressed valuations. Deutsche Bank (DBK.DE, -4.94%), UniCredit (UCG.MI, -4.18%), and broader sector names including Société Générale (SOGN.PA) and Banco Santander (SAN.MC) led losses in the Euro Stoxx 50. Despite the structural tailwind from higher ECB rates (deposit rate at 2.50%), the market is currently treating rising long-end yields and fiscal risk as net negatives for European bank credit quality and sovereign bond portfolios.
DAXThe DAX closed down 1.18% at 24,806.97, its decline outpacing the CAC 40 (-0.51%) and FTSE 100 (-0.16%), reflecting Germany's heavier weighting toward energy-intensive industrials and financials. The MIB was the weakest major European index, falling 1.35% to 49,298, driven by Italian bank weakness led by UniCredit (UCG.MI, -4.18%). The SMI also fell 1.24% while the AEX was a rare outperformer, gaining 0.31%, supported by Unilever (UNA.AS, +1.26%).
ENERGYEuropean energy stocks outperformed the broad market as Brent crude surged 4.07% to $104.28/bbl on Middle East supply disruption fears, briefly trading above $105/bbl intraday. TotalEnergies (TTE.PA), Shell (SHEL.L), and BP (BP.L) were key beneficiaries. The Basic Resources sector (EXV2.DE) also gained 1.49%, while Oil & Gas (EXH2.DE) fell 1.47% on a net basis — reflecting divergent performance within energy-adjacent sectors as input cost fears offset some commodity price tailwinds elsewhere.
TECH|IFXInfineon Technologies (IFX.DE) fell 5.77% on Thursday, the second-worst performer in the Euro Stoxx 50, as the AI/semiconductor sentiment deteriorated following the FT report that OpenAI's annualised revenue run rate was approximately $50 billion — well below the $68–70 billion previously signalled to investors. European technology as a sector (EXSE.DE) fell 1.23%, with Fresenius Medical Care (FME.DE) also posting a sharp decline of 6.85%, though for sector-specific rather than tech reasons.
EUR|GBPEUR/USD fell 0.47% to 1.1201 and GBP/USD declined 0.39% to 1.3215 on Thursday, with both moves reflecting US dollar resilience on the back of elevated Treasury yields and oil-driven inflation concerns. EUR/GBP edged down just 0.08% to 0.8475, suggesting the EUR and GBP weakened broadly in tandem. EUR/CHF fell 0.37% to 0.933, consistent with modest safe-haven CHF demand, while USD/CHF was nearly flat at 0.833.
ECB|MACROThe ECB's September meeting accounts released Thursday confirmed policymakers view the current inflation spike — with eurozone headline CPI recently at 3.3–3.8% — as primarily energy-driven, with underlying inflation trends described as more benign and long-term expectations anchored near 2%. Officials noted that rising market yields are providing additional de facto tightening, reducing the urgency for immediate rate action. The deposit rate remains at 2.50% following two 2026 hikes, with October a likely hold and December framed as a conditional possibility.