European equities opened higher on Wednesday as a sixth straight session of falling oil prices eased inflation worries and took pressure off bond yields. Germany's DAX, the UK's FTSE, and France's CAC 40 all advanced, while investors also looked ahead to preliminary September PMI data from the Eurozone.
European stock markets opened higher across the board on Wednesday, with falling oil prices easing inflation concerns ahead of key regional economic data.
Oil's slide takes pressure off bonds
Brent crude has fallen back to just below $99, extending its decline to a sixth consecutive session, as improving Saudi supply flows and hopes for US-Iran diplomacy reduce some of the geopolitical premium in the price. That is easing concerns over inflation and taking some pressure off bond markets as well.
As a result, 10-year Treasury yields continue to sit just under 5%, at around 4.95% today. German 10-year bond yields are also settling down at around 3.44%, after peaking last week at 3.57%.
Indices advance across the board
The combination of cheaper oil and steadier yields is proving supportive for European equities, particularly after oil had been one of the biggest macro headwinds for stocks earlier this month. The Eurostoxx is up 0.5%, Germany's DAX 0.3%, France's CAC 40 0.5%, the UK's FTSE 0.4%, Spain's IBEX 0.3%, and Italy's FTSE MIB 0.5%.
Traders are also watching the preliminary September PMI data from France, Germany, and the wider Eurozone, which should offer a fresh read on both economic momentum and inflation pressures.
US futures lend a steadier hand
Across the Atlantic, S&P 500 futures are up roughly 0.1%, while Nasdaq futures are broadly flat. That follows the Nasdaq Composite posting another record close on Tuesday. US futures are providing a steadier helping hand rather than driving the move outright.
Overall, it's a moderate risk-on mood at the open. Still, some nerves persist, with the bond market continuing to sit on the edge despite the falling oil prices.
Source: Investinglive
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