Europe opens in positive territory, focus on USA inflation data and the Fed

Indices

European equity markets are currently exhibiting stability with selective strength, as most major indices trade near or just below their record highs. The FTSE MIB Index 42521.22 is maintaining a strong upward trajectory, supported by a "strong long" trend signal and reflecting renewed institutional buying, especially in banking and energy sectors. The DAX Performance Index 24238.73 continues to show resilience, with a flat short-term trend but maintaining momentum just below its year high. France’s CAC 40 8218.12 is trading with minor gains and a flat trend, signaling market indecision amid ongoing political developments. The FTSE 100 9587.48 is also flat, reflecting cautious optimism led by energy and financials. Spain’s IBEX 35 15839.1 posts slight gains near its annual peak, with a flat micro-trend. The Euro STOXX 50 5686.6 displays a "strong long" trend, indicating persistent institutional inflows and broad-based confidence. This technical landscape currently favors momentum and trend-following strategies, particularly in indices with clear upward signals.

Stocks

Sector rotation is pronounced, with basic resources and banking stocks outperforming, while autos and technology continue to lag. Steelmakers such as ArcelorMittal (MT:MT), Aperam (APAM.AS), Thyssenkrupp (TKAG.DE), and SSAB (SSABa.ST) have each advanced more than 3, buoyed by recent changes to European steel import quotas. Spanish banks Sabadell (SABE.MC) and Caixabank (CABK.MC) are notable standouts, with year-to-date gains of 67 and 47, broadly supporting the IBEX 35. Conversely, BMW (BMW:GR) has declined 8.9 after issuing a negative earnings outlook, and technology leaders such as ASML (ASML.AS) and ASMI (ASMI.AS) remain pressured by renewed chip export restrictions. French banking names—Société Générale (GLE), Crédit Agricole (ACA), and BNP Paribas (BNP)—have registered losses, weighing on the CAC 40. Current market dynamics favor continued emphasis on resource and banking strength, while caution is warranted in auto and tech segments.

Economic News

Recent economic data have reinforced the cautiously optimistic tone in European equities. Spain’s Industrial Production Year-over-Year for August registered at 3.4, surpassing the previous 2.7, which has directly supported IBEX 35 performance. In contrast, Spain's trade balance for August posted at -6, widening from -4.01 and signaling some weakness for Spanish equities. Euronext’s record fixed-income trading revenues in Q1 2025 further highlight robust investor participation and market volatility, especially benefiting banking and resource sectors. Political risk remains in focus in France, where the government's decision to delay pension reform has helped stabilize market sentiment and contributed to a fall in the 10-year OAT yield to 3.404.

Economic Events

Key macroeconomic events are on the horizon this week. Releases of Eurozone Industrial Production and GDP data, the German ZEW Economic Sentiment Index, and France’s CPI are all expected to be closely watched for growth and inflation guidance. Central bank meeting minutes from both the Federal Reserve and European Central Bank will be scrutinized for forward guidance and could impact rate-sensitive sectors. In Spain, the Consumer Confidence figure for September is estimated at 85, up from 82.9, indicating a possible improvement in sentiment. Additionally, Spanish government bond auctions have recently shown easing funding costs, contributing to a constructive outlook for sovereign debt and broader risk assets.

Market Sentiment

Overall market sentiment across European equities is cautiously optimistic. Sustained inflows into blue-chip indices, particularly the Euro STOXX 50, are underpinned by expectations of improving credit conditions and supportive central bank policy. Strong performance in basic resources and banking is balanced by continued weakness in autos and technology, reflecting a tactical, sector-driven approach among institutional investors. Political and regulatory uncertainties, especially in France and the banking sector, create short-term headwinds, but the technical and fundamental backdrop remains positive, favoring further gains in leading European indices.

Please note that the analysis is for informational purposes only and does not constitute financial advice. Users should conduct their own research.