Key facts
- European shares rose, led by technology stocks, as oil prices eased.
- US President Donald Trump and Chinese President Xi Jinping are set to meet on Thursday.
- Meta Platforms' AI assistant, Muse, has seen strong demand and usage since its US launch.
- Brent crude futures hovered above $100 per barrel.
- The cost of insuring French government debt against default risk reached its highest level since March 2020.
- Two-year Treasury yields have jumped 36 basis points in the past two weeks.
European shares advanced on Monday, with technology stocks leading the gains as a retreat in oil prices eased market concerns and boosted risk sentiment. The pan-European STOXX 600 index was up 0.56% at 638.98 points by 0710 GMT. Energy stocks slipped 0.62% as oil prices eased amid reports of increased supply, despite ongoing conflicts in the Middle East and Eastern Europe.
World leaders are gathering at the United Nations General Assembly in New York this week, with a key bilateral summit between US President Donald Trump and Chinese President Xi Jinping scheduled for Thursday. Ahead of this meeting, Treasury Secretary Scott Bessent and China's Vice Premier He Lifeng met on Sunday to prepare an agenda on trade relations, AI concerns, and geopolitics.
Oil prices dipped on Monday on hopes that Saudi Arabia would restore some flows through its East-West pipeline and amid reports that oil and fuel shipments had picked up in September, though observable data was less optimistic. Brent crude remained above $100 per barrel, and some refined oil shortages were emerging at US retailers.
In the US, rate markets are recalibrating after the Federal Reserve's recent rate hike, with one more hike fully priced by year-end and a 50-50 chance of a move as soon as next month. Minneapolis Fed boss Neal Kashkari noted that inflation concerns extend beyond oil prices to services inflation. Two-year Treasury yields have jumped as much as 36 basis points in the past two weeks.
The Bank of England is also expected to raise rates by year-end. In Europe, investors are watching the results of state elections in Germany, where projections showed the far-right Alternative for Germany (AfD) emerging as the largest party. France's government faces scrutiny over its high budget deficit, with its 10-year bond premium over Germany's reaching 104 basis points, the highest since 2012, as it plans €54 billion in spending cuts.