European Trading Session Report | September 28, 2026 | Analysis during European hours (8:00 AM – 5:00 PM CET)

**European Markets Edge Higher Amid Mixed Signals; ECB Policy in Focus** European equities are posting modest gains in early trading, with the CAC 40 leading the region (+0.30%) as banking and energy stocks outperform, while the Euro Stoxx 50 (+0.02%) and DAX (+0.05%) remain subdued amid lingering growth concerns. The FTSE 100 is advancing 0.22%, supported by a weaker sterling after softer UK retail sales data. Currency markets are reflecting divergent monetary policy expectations, with the EUR/GBP sliding 0.14% as traders price in a more dovish Bank of England trajectory, while the EUR/USD dips 0.02% near 1.0850 ahead of key Eurozone PMIs later this week. The ECB’s cautious stance continues to weigh on sentiment, with policymakers emphasizing data dependency amid sticky services inflation. The USD/CHF is firming 0.07% as SNB rhetoric remains balanced, while the GBP/USD climbs 0.11% on technical buying despite broader macro headwinds. Commodity-linked currencies are edging higher, with the AUD/USD and USD/CAD up 0.06% and 0.04%, respectively, as oil prices stabilize above $81/bbl. US markets closed firmly higher yesterday, with the Dow Jones surging 0.93% on cyclical strength, while the S&P 500 and Nasdaq 100 gained 0.51% and 0.42% amid mixed tech earnings. Asian equities traded mixed overnight, with Japan’s Nikkei underperforming (-0.34%) on USD/JPY volatility. Investor focus now shifts to Thursday’s ECB minutes and Friday’s Eurozone flash PMIs for clues on the timing of rate cuts. Sector rotation into defensives suggests lingering caution, though credit spreads remain tight, reflecting subdued near-term recession risks.

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