European markets are set for a red opening amid rising concerns over bankruptcies and issues at regional U.S. banks. The macroeconomic agenda is quiet. Wall Street remains volatile due to potential U.S. tariffs on China and auto-industry bankruptcies. The ongoing U.S. government shutdown leaves the macro agenda empty. Company news highlights various developments, with Nestlé planning price cuts and Salesforce aiming for growth. Oil prices dropped slightly due to increased inventories.

Industrial activity in the Mid-Atlantic region of the U.S. unexpectedly contracted in October, with increasing prices for inputs and goods indicating potential inflation growth. The Philadelphia Fed’s activity index dropped to -12.8 from 23.2 in September, signalling contraction. Despite rising new orders, shipments declined. Input prices paid by factories increased, with 49% reporting higher costs, while product prices received also rose. These trends suggest tariffs are driving inflation, although opinions vary on whether it’s a temporary or enduring effect.

Olaf Sleijpen, president of De Nederlandsche Bank, highlights the challenges in international cooperation for stricter regulation of non-bank financial entities, such as shadow banks, which now account for half the credit market but often lack oversight. Following the financial crisis, there was strong consensus for regulation, but that unity has decreased. High valuations and vulnerable shadow banks pose significant risks. Sleijpen argues for better data on non-bank activities, and emphasizes the need for a global approach, with Europe taking the lead. Stablecoins pose risks due to reliance on U.S. Treasury bonds.

The 6M Euribor decreased with 1 basis point to 2.10% compared to previous business day. The 10Y Swap decreased with 2 basis points to 2.56% compared to previous business day.

In the attachment, today’s market data on money and capital market rates as well as other rates are presented.

France’s suspension of its pension reform lifted stock markets, with the CAC 40 up 2.5% and the euro 0.2% higher as political stability returned. The delay will cost €400 million in 2026 and €1.8 billion in 2027, risking a further 3–4 percentage point rise in debt-to-GDP over the next decade. Though Prime Minister Sebastien Lecornu targets a 4.7% deficit by 2026, analysts warn France’s debt, already 113% of GDP, may keep climbing without deeper reform.

Investors are increasingly positioning for additional interest rate cuts by central banks, fueling a rally in government bonds worldwide and pushing yields lower. The yield on the U.S. 10-year Treasury has slipped to around 4%, its lowest level since April, amid mounting evidence of an economic slowdown. Rising trade tensions and shifting expectations for Federal Reserve policy have further intensified the move into government debt.

Gold surged past $4,200 per ounce for the first time, closing at $4,195, an increase of 1.3%, as investors bet on imminent U.S. rate cuts and sought refuge amid renewed U.S.–China trade tensions. The metal has gained more than 60% this year, fueled by geopolitical strains, central bank demand, and strong ETF inflows.

The 6M Euribor increased with 1 basis point to 2.11% compared to previous business day. The 10Y Swap decreased with 2 basis points to 2.58% compared to previous business day.

In the attachment, today’s market data on money and capital market rates as well as other rates are presented.

The International Monetary Fund expects the global economy to expand by 3.2 percent this year. Growth is being supported by lower interest rates, a weaker dollar, and substantial investments in artificial intelligence, though the IMF warns of risks such as rising fiscal pressures, economic fragility in China, and potentially disappointing returns on AI investments.

Unemployment in the United Kingdom rose slightly to 4.8 percent in the three months to August, according to government figures released yesterday. Meanwhile, wage growth eased to 4.7 percent, in line with economists’ expectations.

Confidence among small U.S. businesses declined in September, according to figures released yesterday by the NFIB. The confidence index fell by 2 points to 98.8, marking the first drop in three months, as business owners grew increasingly concerned about inflation, weaker sales, and a tight labor market.

The 6M Euribor is unchanged at 2.10% compared to previous business day. The 10Y Swap decreased with 3 basis points to 2.60% compared to previous business day.

In the attachment, today’s market data on money and capital market rates as well as other rates are presented.

Bank of England MPC member Megan Greene said further easing is still on the table but warned the UK’s disinflation “may be slowing,” noting that policy remains restrictive even after the Bank Rate was lowered to 4.0%. She flagged that headline CPI was 3.8% y/y in August and is expected to be around 4% in September, still well above the 2% target and the highest among G7 peers. Markets currently anticipate the next reduction no earlier than 2026, reflecting caution over lingering upside inflation risks.

Gold extended its record run, with spot touching about €3,547/oz and U.S. futures near €3,565/oz, as renewed U.S.–China trade tension and expectations of additional Fed easing boosted safe-haven demand. Earlier in the session, prices printed a fresh record around €3,526.34/oz. Banks have lifted targets, with BofA now seeing €4,322/oz in 2026 (avg. €3,803), while flagging scope for near-term corrections.

Early evidence indicates U.S. firms and consumers are absorbing most tariff costs: researchers tracking 359k products find import prices up approximately 4% since early March and domestic prices up approximately 2%, while average U.S. import taxes have risen from 2% to 17%. Reuters notes duties now total roughly €25.9bn per month; Fed estimates suggest tariffs are adding 30–40 bps to core inflation, with a Boston Fed back-of-the-envelope at 75 bps. Companies from Procter & Gamble to EssilorLuxottica have announced price hikes as pass-through continues.

The 6M Euribor is unchanged at 2.10% compared to previous business day. The 10Y Swap decreased with 1 basis point to 2.63% compared to previous business day.

In the attachment, today’s market data on money and capital market rates as well as other rates are presented.

China’s commodity imports rebounded in September as industrial demand picked up, with iron ore reaching 116 million tons, coal up 7.6 percent, and copper rising 13 percent. Crude oil and natural gas imports slipped, while soybean purchases climbed to a four-month high. The stronger trade flows come despite a sixth consecutive month of manufacturing contraction and renewed tensions with the United States over tariffs.

The dollar regained ground to 99.00 against a basket of major currencies after early losses, as hopes rose that Washington might ease its latest trade escalation with Beijing. Investor nerves eased following President Trump’s 100 per cent tariff threat, while thin holiday trading kept markets subdued. The greenback climbed 0.5 per cent to 151.99 yen as Japan’s political uncertainty weighed on the currency after Komeito’s withdrawal from the ruling coalition.

Dutch pension funds are increasingly looking to invest more within Europe, citing growing political and economic uncertainty in the United States. These investments are expected to focus on energy infrastructure, housing, and defence-related innovation, aiming to strengthen Europe’s self-reliance and resilience. Experts argue that this marks a turning point, with funds shifting part of their portfolios from U.S. equities toward European impact investments that deliver both financial and social returns.

The 6M Euribor is unchanged at 2.10% compared to previous business day. The 10Y Swap decreased with 5 basis points to 2.64% compared to previous business day.

In the attachment, today’s market data on money and capital market rates as well as other rates are presented.

Direct lending, praised for high returns and low default rates, is facing scrutiny following the collapse of auto supplier First Brands Group. Despite the supposed close relationships lenders have with borrowers, lenders like UBS and BlackRock suffered significant losses due to a lack of understanding of the borrower’s true financial state. The sector, which grew rapidly post-financial crisis, has never faced a severe recession test. Tobias Adrian from the IMF warns of impending risks as private credit emerges among retail investors, potentially creating liquidity issues. U.S. banks have significantly increased lending to nonbank financial institutions, which could pose problems if defaults escalate.

The European Central Bank (ECB) policy is considered robust enough to manage changes in inflation outlooks, allowing it to maintain its current course until more clarity emerges, according to recent meeting notes. In September, the ECB kept interest rates steady, suggesting that further policy easing would require significant conditions despite ongoing U.S. tariff impacts. The likelihood of rate cuts this year has decreased, supported by positive data and comments from President Christine Lagarde. While significant downward risks remain, the ECB will continue to assess tariffs and other factors. Investors believe further easing may still be possible due to economic uncertainties in France and Germany.

The Dutch labour market is cooling, with fewer job changes, vacancies, and active job searches. Labour mobility is at a four-year low due to geopolitical tensions, trade wars, political uncertainty, and low consumer confidence. Intelligence Group notes increased reorganizations and reduced demand for highly educated starters due to artificial intelligence. U.S.-like labour market effects are expected to appear in the Netherlands within 12-18 months, with rising unemployment and lower wage growth. A new cabinet must prepare for increased social security expenditures.

The 6M Euribor decreased with 1 basis point to 2.10% compared to previous business day. The 10Y Swap increased with 3 basis points to 2.69% compared to previous business day.

In the attachment, today’s market data on money and capital market rates as well as other rates are presented.

Spot gold surged past $4,000 an ounce for the first time, driven by concerns over US fiscal stability, the government shutdown, and the Federal Reserve’s monetary stance. The metal has jumped more than 50% this year, with bullion-backed ETFs seeing their largest monthly inflow in over three years and central banks continuing to buy gold at a strong pace. Analysts say the rally reflects both a search for safe havens amid geopolitical tensions and expectations of easier monetary policy.

French markets edged higher as caretaker Prime Minister Sebastien Lecornu signalled optimism on the budget ahead of the final day of government formation talks. Ten-year yields fell five basis points to 3.52% and the spread over German bonds narrowed to 83 points, while the CAC 40 rose almost 1%, mainly caused by rising bank shares. Investors remain focused on whether a budget deal will be reached before Wednesday’s deadline, with progress seen as crucial to avoid political uncertainty or snap elections.

U.S. Treasury yields held steady as the government shutdown entered its second week, leaving investors wary amid delayed economic data. The 10-year note traded near 4.13 percent while the 2-year note hovered around 3.59 percent, as markets continue to price in another Federal Reserve rate cut in October. The muted reaction followed Fed minutes showing uncertainty over future policy moves, while attention turned to upcoming remarks from key officials for further guidance.

The 6M Euribor increased with 1 basis point to 2.11% compared to previous business day. The 10Y Swap decreased with 4 basis points to 2.66% compared to previous business day.

In the attachment, today’s market data on money and capital market rates as well as other rates are presented.

In August, the number of new factory orders in Germany declined once again, statistics office Destatis reported yesterday. Compared with July, orders fell by 0.8 percent, while they were 1.5 percent higher than a year earlier.

Inflation in the Netherlands stood at 3.3 percent in September, up from 2.8 percent in August, according to final figures from Statistics Netherlands (CBS). The increase was mainly driven by higher prices for fuel and holiday accommodations. Compared to the previous month, prices edged down slightly.

In the second quarter, households in the eurozone further increased their savings. The savings rate rose to 15.4 percent, while household investment remained stable at 9 percent. Households are building financial buffers and restoring wealth that was eroded by the post-pandemic inflation surge.

The 6M Euribor is unchanged at 2.10% compared to previous business day. The 10Y Swap decreased with 1 basis point to 2.70% compared to previous business day.

In the attachment, today’s market data on money and capital market rates as well as other rates are presented.

French assets retreated as the new government collapsed within hours of being appointed. The CAC 40 slipped >1.3% with major lenders BNP Paribas, Société Générale and Crédit Agricole down 3–4%, while mid-caps fell 2.6%. The 10-year OAT yield climbed by almost 9 bps to around 3.56%, pushing the OAT–Bund spread to 85 bps (near the highest since January), and France 5Y CDS rose to 41 bps. The euro eased to $1.172, as investors judged there was no quick fix to France’s fiscal and political impasse.

The U.S. dollar advanced as fiscal-policy uncertainty weighed on Euro and Yen. USD/JPY briefly touched 150.47, its biggest daily gain since May, while EUR/JPY hit a record 176.25. EUR/USD slipped to 1.171 (intraday low 1.1649). Futures implied >95% odds of a Fed 25 bps cut in late October (with additional easing priced for December).

Bitcoin set a new record, rising to $125,836 yesterday. The move has been supported by strong institutional demand and a softer U.S. dollar backdrop (the DXY 98.09, down nearly 10% YTD), with policy signals also seen as constructive. Momentum indicators point to a strong up-trend after reclaiming $125k, though some strategists expect consolidation after the breakout.

The 6M Euribor increased with 2 basis points to 2.10% compared to previous business day. The 10Y Swap increased with 3 basis points to 2.71% compared to previous business day.

In the attachment, today’s market data on money and capital market rates as well as other rates are presented.

Hungarian Prime Minister Viktor Orbán has announced a new low-interest loan program for small and medium-sized businesses, offering 3% fixed-rate loans up to 150 million forints, as he faces a tough (re-)election next year. The move follows other pre-election spending measures such as subsidised home loans and wage hikes, aimed at boosting consumption and growth. Economists warn that these policies could raise fiscal risks and push Hungary’s budget deficit above 5% of GDP in 2026.

Italy is urging the U.S. to drop a planned tariff of 91.74% on Italian pasta imports, which would nearly double their price. The U.S. Department of Commerce claims Italian producers sold pasta below fair value, but Rome disputes this and is coordinating with the EU to defend its exporters. The U.S. is a key market worth about $800 million in pasta exports, and new tariffs could hurt Italy’s trade and growth outlook.

Labour markets in major economies have largely frozen as uncertainty over trade, taxes, and AI makes employers hesitant to hire or fire, and workers reluctant to change jobs. Employment growth in the US and other G7 countries has slowed sharply, though unemployment remains low. Experts say the stagnation reflects demographic shifts, post-pandemic caution, and structural challenges rather than an outright downturn.

The 6M Euribor is unchanged at 2.08% compared to previous business day. The 10Y Swap increased with 1 basis point to 2.68% compared to previous business day.

In the attachment, today’s market data on money and capital market rates as well as other rates are presented.