European Trading Session Report | October 01, 2026 | Analysis during European hours (8:00 AM – 5:00 PM CET)

**European Markets Struggle as Risk Sentiment Sours** European equities are under pressure in early trading, with the Euro Stoxx 50 down 0.43%, while Germany’s DAX and France’s CAC 40 are sliding 0.56% and 0.67%, respectively, as lingering concerns over ECB policy and weak regional demand weigh on sentiment. The FTSE 100 is underperforming with a 1.17% drop, dragged lower by mining and energy stocks amid softening commodity prices. The euro is weakening against the dollar, with EUR/USD down 0.13%, as markets digest mixed signals from ECB officials, some of whom continue to advocate for caution despite easing inflation. The pound is holding relatively steady, with GBP/USD dipping just 0.03%, as traders await tomorrow’s UK GDP data for further clarity on the BoE’s rate path. EUR/GBP is edging 0.09% lower, reflecting slight sterling resilience despite broader risk-off flows. The Swiss franc is softening, with USD/CHF up 0.19%, as safe-haven demand eases slightly following a calmer Asian session. Meanwhile, USD/JPY is rallying 0.57% as the yen retreats on fading bets of imminent BOJ intervention. Overnight, US markets closed mixed, with the Nasdaq 100 gaining 0.23% on tech resilience, while the Dow Jones slumped 0.86% amid renewed concerns over consumer spending. Asian equities were subdued, failing to provide a positive lead for Europe. Sector-wise, European banks are lagging as rate-cut expectations temper net interest margin optimism, while autos are also under pressure amid softening demand signals from China. Investor sentiment remains cautious ahead of key US CPI data tomorrow, which could reshape Fed expectations and reverberate across global markets. With little major Eurozone data today, trading is likely to remain range-bound, though volatility could pick up if ECB commentary shifts the dial on June rate-cut probabilities.

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