Financial Markets Daily Report03 novembre 2026
Risk sentiment improved at the start of the week as signs of renewed diplomatic engagement between Iran and U.S. triggered a sharp correction in energy prices, easing inflation concerns. Brent crude fell around 10% and Dutch TTF natural gas prices also moved markedly lower, supporting both sovereign bonds and equities.
Government bond markets rallied on Europe, particularly in peripheral markets. Both Italian and French sovereign yields spreads narrowed against Bunds, despite Fitch's unexpected downgrade of France's outlook to negative. Belgium was the exception, with sovereign yield spreads widening following Prime Minister Bart De Wever’s resignation after coalition talks failed to secure approval for a €10bn fiscal adjustment package. U.S. Treasury yields recorded only modest moves.
Equity markets advanced in Europe, while U.S. indices traded mixed. The euro and sterling strengthened against the dollar. Market attention today will focus on the U.S. midterm elections.