The dominant macro driver overnight is the intersection of Middle East geopolitical escalation and AI capital expenditure anxiety, with Brent crude surging 4.00% to $113.17/bbl — a five-month high — on Houthi strikes against Saudi infrastructure and Strait of Hormuz disruptions, while the Nasdaq shed 1.57% (per close data) as Meta Platforms posted its first negative free cash flow as a public company and guided higher spending, wiping roughly $1 trillion in tech market cap. VIX jumped 9.94% to 19.03, signalling a meaningful repricing of near-term risk, and the German 10-year yield spiked 28.4 basis points to 3.47% — an outsized move that dwarfs the 1bp rise in the US 10-year to 5.13% and demands attention from European fixed income desks. TTF natural gas surged 4.40% to €90.82/MWh, its highest level since December 2022, compounding the energy cost shock heading into winter with EU storage estimated at approximately 75% capacity. Three central bank decisions arrive next week — Fed on 28 October, ECB on 29 October, BoJ on 30 October — with all three currently expected to hold, though markets continue to price further ECB tightening beyond the September 25bp hike that brought the deposit facility rate to 2.50%. The Italian MIB underperformed sharply at -1.40% and IBEX 35 fell 0.94%, reflecting sovereign-sensitive pressure, while the DAX bucked the trend with a +0.27% gain supported by Chemicals (+2.22%) and Banks (+1.36%) sector strength. EUR/USD held firm at 1.1235 (+0.07%) and GBP/USD gained to 1.3396 (+0.17%), with the DXY slipping 0.12% to 101.61, suggesting the dollar's safe-haven bid has been tempered by expectations of a Fed hold on 28 October. The 28.4bp spike in the German Bund yield is the session's most anomalous data point and will be a key focus for European rates traders at the open, as it implies either a significant repricing of ECB terminal rate expectations or sovereign stress contagion from French debt markets, where 10-year yields have topped 5% with spreads versus Germany at their widest since 2011 at approximately 165-175 basis points. European energy-intensive sectors — Chemicals, which led sector gains at +2.22%, and Utilities at +0.84% — face a conflicted backdrop: higher energy prices can benefit integrated utilities but compress margins for industrial consumers. The EUR/GBP decline of 0.11% to 0.8386 reflects sterling's relative outperformance, consistent with UK macro resilience ahead of this morning's retail sales print, while cross-asset pressure is most concentrated in European tech (ASML, SAP both gained on stock-specific catalysts but face Nasdaq spillover risk), Italian and Spanish sovereign-linked financials, and auto names exposed to both energy cost inflation and US tariff risk such as BMW, which fell 1.11%.