European Stocks Show Mixed Trend Ahead of US Inflation, ECB Decision, Amazon Earnings

Session summary:

Asset moves:

• Canadian dollar the strongest, Australian dollar the weakest of the session
• Gold declines 1.1% to $4,018
• 10-year Treasury yield falls 2 bps to 5.02%
• WTI crude oil drops 0.8% to $101.95
• Bitcoin loses 1.5%, reaching $80,089
• Most European stocks move up; S&P 500 futures off 0.4%

The post-Fed sessions were not particularly lively, with markets left with minimal material to act on after the previous day's events.

December Fed rate increase bets are still mostly unchanged, so the dollar and Treasury yields have little catalyst to rally. All attention now moves to Wall Street, where Alphabet's results revived concerns about AI investment, overshadowing Microsoft's solid earnings from the prior day.

European equities are mostly more stable on the day, but the drag from technology stocks is weighing on overall risk appetite and could spread further. S&P 500 futures are 0.4% lower, and Nasdaq futures are off 1.1% today.

Oil prices are slightly lower amid hopeful peace talks between the US and Iran, though the chance of escalation in the Middle East remains after the midterm elections. WTI crude slipped 0.8% to $101.95, remaining at elevated levels for now.

This does little to calm bond markets, with 10-year Treasury yields holding near 5.02% today. At those levels, borrowing costs keep broader markets on edge, as the "higher for longer" narrative persists and the Fed is still expected to raise rates in December.

The dollar is more stable among major currencies but only experiencing small adjustments so far. EUR/USD edged down 0.1% to 1.1135, while USD/JPY rose 0.1% to 158.02 today.

The euro and French bonds are set to be in focus in the coming session as the ECB policy decision approaches. But for broader markets and risk, the focus shifts to US PCE inflation data and Amazon's earnings to steer direction in the week's final stretch.