FINWIRES · TerminalLIVE
FINWIRES

German DAX Rises; Euro Area Industrial Production Edges Down

By

Germany's blue-chip DAX index gained 0.62% at the end of Wednesday's session, as investors weighed fresh euro area industrial output data and awaited the US Federal Reserve's latest monetary policy move.

Eurostat data showed a 0.1% monthly decline in the eurozone's industrial production in July, following a revised 0.1% fall previously, and against an expected 0.2% decrease. The downbeat reading reflects reduced production in non-durable consumer goods.

"But while production figures are still [lackluster], sentiment among manufacturing corporates is becoming more upbeat again. The PMI indicated accelerating output in August, despite energy prices rising again. So while manufacturing is unlikely to contribute much to GDP growth over 3Q, there is hope for stronger performance towards the end of the year," ING said.

On the geopolitical front, European Commission President Ursula von der Leyen said the European Union is willing to work with Canada on "opening the door" for the country to become the first associate member of the bloc. In her State of the Union address, she advocated taking the relationship to the "highest level possible" through new partnerships in technology, manufacturing, and critical minerals. According to von der Leyen, the EU's alliances, including the one with Canada, serve both as a "strategic choice" for Europe and a necessary response to the "fracture in the international rules-based system."

In corporate updates, Siemens AG (SIE.F) was up 0.79% after announcing its partnership with Procter & Gamble to roll out an artificial intelligence-based Visual Inspection Cockpit across the US consumer goods company's global manufacturing facilities. Powered by the German technology group's industrial AI and edge computing platform, the jointly developed technology detects defects at high production speeds to improve product quality and reduce waste.

Meanwhile, Metzler Capital Markets affirmed its buy rating and price target of 74 euros on GEA Group (G1A.F), saying its discussions with the German food, beverage and pharmaceutical industries systems supplier's team bolstered its confidence in the company's financial performance through the second half and beyond.

"(1) The positive trends seen in Q2/26 continued into Q3/26, with July and August developing in line with plan. The U.S. remains the strongest growth market, with China recovering, and Europe also growing. (2) The project pipeline remains very strong despite the higher interest-rate environment. GEA is confident that order intake in '26 will be meaningfully above the '25 level," Metzler wrote, noting management comments on strong demand in dairy processing and continuous pharmaceutical manufacturing and the lack of bottlenecks in production capacity, among others. GEA Group rose 0.39%.

What else is happening in Asia Markets?

Asia Markets

Update: US Equity Indexes Retreat as Benchmark Bond Yield Hits 19-Year High Ahead of Fed Rate Increase While Crude Oil Prices Jump

(Updates with index/price moves, comments and geopolitical news from the first paragraph.)US equity indexes fell as the 10-year Treasury yield touched a 19-year high amid near certainty that the Federal Reserve will increase interest rates, and crude oil surged as the war against Iran draws in Saudi Arabia.The Nasdaq Composite fell 0.8% to 25,981.57, the S&P 500 declined 0.5% to 7,585.73, and the Dow Jones Industrial Average dropped 0.6% to 52,093.11 on Tuesday.All sectors except energy and materials fell, with consumer discretionary leading decliners."Stocks are falling basically everywhere but not by much, and on rate and inflation fears plus AI fears either having to do with concern about slowing momentum or the cheery news from AI researchers that all profits will go to zero by decade's end," Derek Holt, head of capital market economics at Scotiabank, said in a note.The Federal Reserve kicked off its two-day monetary policy meeting on Tuesday. Ahead of the Fed's announcements on Wednesday, interest rate traders are now pricing in a 95% probability that the central bank will raise its target rate by 25 basis points, up from 33% a month ago, according to the CME FedWatch tool.Morgan Stanley expects another interest-rate increase in December, following a move up on Wednesday, and then a pause, as the US investment bank anticipates inflation will moderate, according to a research note."We see arguments for both a hike and a hold, but signs of second-round effects from energy prices, strong demand tied to AI-related investment, a neutral rate that is possibly temporarily higher, and concerns about credibility mean the balance of risks now argues for a somewhat more restrictive policy," the research note said. "We expect the [Summary of Economic Projections] to show a median of two hikes this year followed by one cut each in 2027 and 2028."The US Treasury's 20-year auction hit a high yield of 5.420% on Tuesday, up from 5.204% in the previous auction, further evidence that the government is paying more for its borrowings. The bid-to-cover ratio was 2.57, up from 2.53 in the previous auction.Most US Treasury yields were higher in the final leg of trading. The 10-year yield jumped 4.5 basis points to 5.01%, earlier touching 5.04%, the highest since 2007. The two-year yield advanced 3.9 basis points to 4.67%.Saudi Arabia issued security alerts over a range of territory on Tuesday, including in the holy city of Mecca and the second-largest city, Jeddah, following a week of attacks from Iran-aligned fighters that have drawn it deeper into the Middle East war, Reuters reported. The Iran-aligned Houthis in Yemen have carried out attacks on Saudi Arabia over the past week, including strikes on an air base on Monday, the news agency said.The front-month US West Texas Intermediate crude oil contract surged 4.4% to $105.88 per barrel, and the global benchmark North Sea Brent jumped 2.8% to $108.61 per barrel.Gold futures fell 0.4% to $4,334.5, and silver futures were steady at $64.13.President Donald Trump's acknowledgment that he expects the war to end after the midterms, and winter creeping closer, may be prompting financial markets to reassess this geopolitical deterioration, Walt Chancellor, an energy strategist at Macquarie, said in a note.

Dow JonesNasdaq CompositeS&P 500
Asia Markets

Update: US Equity Indexes Decline as Benchmark Treasury Yield Hits Highest in Almost Two Decades, Crude Oil Jumps

(Updates with index/price moves and company/geopolitical news from the first paragraph.)US equity indexes fell as the 10-year Treasury yield touched a 19-year high ahead of a widely anticipated interest rate increase and after crude oil jumped.The Nasdaq Composite fell 0.7% to 25,997.3, the S&P 500 declined 0.4% to 7,586.1, and the Dow Jones Industrial Average dropped 0.8% to 52,001.7 after midday Tuesday. All sectors except energy and materials retreated. Consumer discretionary and communication services led decliners.The Federal Reserve kicked off its two-day monetary policy meeting on Tuesday. Ahead of the Fed's announcements on Wednesday, interest rate traders are now pricing in a 93% probability that the central bank will raise its target rate by 25 basis points, up from 33% a month ago, according to the CME FedWatch tool.Morgan Stanley expects another interest-rate increase in December, following a move up on Wednesday, and then pauses as the US investment bank anticipates inflation will moderate, according to a research note."We see arguments for both a hike and a hold, but signs of second-round effects from energy prices, strong demand tied to AI-related investment, a neutral rate that is possibly temporarily higher, and concerns about credibility mean the balance of risks now argues for a somewhat more restrictive policy," the research note said. "We expect the [Summary of Economic Projections] to show a median of two hikes this year followed by one cut each in 2027 and 2028."Most US Treasury yields rose. The 10-year yield jumped 4.9 basis points to 5.01%, earlier touching 5.04%, the highest since 2007. The two-year yield advanced 2.5 basis points to 4.66%.Yemen's Iran-aligned Houthis launched a new wave of attacks on Saudi Arabia and were digging into positions on the western coast of Yemen along the Red Sea, Yemeni officials said, as urgent deliberations took place in Riyadh over how to respond to their lightning advance, according to a Reuters news report.Iran's semi-official Fars news agency reported that the Iran Revolutionary Guards Corps has shot down another US-developed MQ-1 drone over Hormuz, Al Jazeera, a Middle Eastern broadcaster, said. This is the third such drone downed in the area on Tuesday, the report said, citing the IRGC.The front-month US West Texas Intermediate crude oil contract surged 4.5% to $105.96 per barrel, and the global benchmark North Sea Brent jumped 3.1% to $108.76 per barrel.Gold futures fell 0.4% to $4,336.9, and silver futures slipped 0.3% to $63.95.In company news, Axon Enterprise (AXON) slumped 11%, the worst performer on the S&P 500, after the company said it intends to offer $1 billion of 0% convertible senior notes due 2031 in a registered public offering.Goldman Sachs' (GS) asset management alternatives unit has raised $11.7 billion across its newest private equity funds and other vehicles, Reuters reported Tuesday, citing a statement and an interview with an executive. Goldman shares declined 2.8%, the worst performer on the Dow.

Dow JonesNasdaq CompositeS&P 500$AXON$GS
Asia Markets

Exchange-Traded Funds, US Equities Fall After Midday

Broad-market exchange-traded funds IWM and IVV were lower. Actively traded Invesco QQQ Trust (QQQ) fell 0.6%.US equity indexes declined after the 10-year benchmark government bond yield hit a 19-year high and crude oil jumped as a Tehran-aligned militia group continues to pull Saudi Arabia into the Iran war.EnergyIShares US Energy ETF (IYE) and the State Street Energy Select Sector SPDR (XLE) gained 2%.TechnologyThe State Street Technology Select Sector SPDR ETF (XLK) shed 0.1%, while iShares US Technology ETF (IYW) and iShares Expanded Tech Sector ETF (IGM) declined 0.3% each.The State Street SPDR S&P Semiconductor (XSD) advanced 0.8%, while iShares Semiconductor (SOXX) fell 0.1%.FinancialThe State Street Financial Select Sector SPDR (XLF) dropped 0.8%. Direxion Daily Financial Bull 3X Shares (FAS) was 2.6% lower, and its bearish counterpart, Direxion Daily Financial Bear 3X Shares (FAZ), rose 2.5%.CommoditiesCrude oil gained 4.2%, and the United States Oil Fund (USO) was 3.5% higher. Natural gas increased 0.5%, and the United States Natural Gas Fund (UNG) advanced 1.2%.Gold on Comex declined 0.4%, and the State Street SPDR Gold Shares (GLD) rose 0.3%. Silver dropped 0.4%, and iShares Silver Trust (SLV) increased 0.9%.ConsumerThe State Street Consumer Staples Select Sector SPDR (XLP) declined 0.7%. The Vanguard Consumer Staples ETF (VDC) was down 0.6%, and iShares Dow Jones US Consumer Goods (IYK) fell 0.5%.The State Street Consumer Discretionary Select Sector SPDR (XLY) was 1.2% lower. The VanEck Retail ETF (RTH) dropped 1.6%, and the State Street SPDR S&P Retail (XRT) dipped 2.1%.HealthcareThe State Street Health Care Select Sector SPDR (XLV) and iShares US Healthcare (IYH) were 0.1% higher each, and Vanguard Health Care ETF (VHT) was fractionally lower, while iShares Biotechnology ETF (IBB) was down 0.9%.IndustrialThe State Street Industrial Select Sector SPDR (XLI) was 0.2% lower. The Vanguard Industrials Index Fund (VIS) decreased 0.1%, and iShares US Industrials (IYJ) fell 0.3%.CryptocurrencyIn midday activity, bitcoin (BTC-USD) decreased 3.1%. Among cryptocurrency ETFs, ProShares Bitcoin ETF (BITO) dropped 3.4%, ProShares Ether ETF (EETH) shed 4.8%, and ProShares Bitcoin & Ether Market Cap Weight ETF (BETH) was up 1.9%.

Dow Jones^EEM^EXI^FAS^FAZ^GLD^IBB^IGM^IGV^IPK^IVV^IWMNasdaq Composite^IYE^IYH^IYJ^IYK^IYW^PMR^QQQ^RTH^SOXXS&P 500^SPY^UNG^USO^VDC^VHT^VIS^XLE^XLF^XLI^XLK^XLP^XLV^XRT^XSD$BETH$BITO$EETH