European shares, euro slide as energy shock, fiscal worries bite
SPY•European stocks and the euro fell as oil rose above $100 and concerns about France’s fiscal outlook weighed on sentiment. The STOXX 600 dropped 1.02% to 630.12, Brent rose 1.2% to $101.83 a barrel, and the euro fell 0.62% to $1.1188.
1. European stocks fall
European stocks fell on Wednesday as oil prices rose above $100 amid renewed Middle East tensions and concerns about France’s fiscal woes. The STOXX 600 was down 1.02% at 630.12, after reaching 624.85 last week, its lowest level since June 12. Brent crude rose 1.2% to $101.83 per barrel.
2. French debt concerns
The yield spread between French and German government bonds widened 11 basis points to 139.50 basis points, after narrowing for two days. French bonds have faced pressure from expectations of higher European Central Bank rates and political uncertainty before the 2027 election, which have raised doubts about France’s ability to fix its finances.
3. Euro and US rates
The euro fell 0.62% to $1.1188 as concerns about energy costs, fiscal sustainability and rate divergence weighed on the currency. The dollar index rose 0.49% to 102.34. Investors were watching US Treasury auctions and the Federal Reserve’s September meeting minutes; traders cut the odds of an October Fed rate hike to 19% from about 50% a week earlier.
