Euro: Recovery holds as currency softens – BNY
BNY’s Geoff Yu argues that the Eurozone recovery remains intact even as the Euro (EUR) weakens. Manufacturing PMIs and business surveys in Germany and across Europe point to strengthening demand, while fiscal stress and a softer European Central Bank (ECB) stance weigh on the currency. The bank maintains its view that the Euro will decline despite stronger economic performance.
Growth resilient as Euro slides
"Last month, we argued that the Eurozone economy was recovering, led by broad-based gains in manufacturing. The Eurozone manufacturing PMI held at a four-year high in September, while factory output is expanding at its fastest pace in nearly five years. New orders and backlogs continue to rise, pointing to a clear strengthening in demand."
"Stronger data and another ECB rate hike haven’t prevented a 1.4% decline in the EUR’s nominal effective exchange rate since the beginning of September. The decline began well before concerns about France’s fiscal position became a central source of weakness and volatility. At the time, the euro was overvalued and interest-rate expectations appeared stretched, while limited short positioning and hedging left room for adjustment."
"Lagarde has already acknowledged that current front-end interest-rate levels would “slow growth.” Recent moves in global bond markets are tightening financial conditions further through the fiscal channel, a point echoed by ECB Chief Economist Philip Lane. The French government has announced fiscal consolidation measures, with legislation expected to pass in Q4."
"Consequently, expectations for year-end ECB rates have fallen below pre-decision levels, adding to EUR weakness."
"Unlike in 2011–2012, we see no spillover from OAT volatility into FX markets. Ten-day realized EURUSD volatility remains within its range since May, even as realized volatility in OAT futures has spiked. The ECB’s retreat from firm rate guidance has already helped dampen volatility."
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
TD Synnex to Acquire BlueStar
11:10 AM EDT, 10/07/2026 (MT Newswires) -- TD Synnex (SNX) said Wednesday it agreed to acquire BlueStar, a specialty technology distributor. Financial terms of the transaction were not disclosed. The deal will combine BlueStar's specialized expertise and portfolio with TD Synnex's global reach and resources, expanding opportunities for customers and vendors. TD Synnex and BlueStar will continue operating independently until the transaction closes. Shares of TD Synnex were down more than 2% in Wednesday trading. Price: 272.39, Change: -6.00, Percent Change: -2.15
Dow Jones Top Financial Services Headlines at 11 AM ET: Venture Firm Behind Chip Startup Groq Targets $10 Billion Megafund | How ...
Venture Firm Behind Chip Startup Groq Targets $10 Billion Megafund Winning bets on hot AI startups are vaulting a little-known Dallas firm into a small group of firms raising gigantic funds. ---- How one trend-following fund outperformed rivals by bringing humans back into the decision-making process One trend-following fund has outperformed rivals this year by deciding to take profits. ---- Financial Services Roundup: Market Talk Find insight on Tower, Banco Santander and more in the latest Market Talks covering financial services. ---- Wall Street Bonuses Are Expected to Hit Another High This Year New York reports that the industry is now on pace for $90 billion in profits this year, leading to higher compensation. ---- Fintech Plaid Bets on Credit Scores to Fuel Next Phase of Growth EXCLUSIVE: Plaid is doubling down on its credit-scoring business with new AI models as the company aims to chart its next era of growth with a suite of products beyond its core business. ---- Companies Raise More Than $1 Trillion in Equity Markets, But AI, Bond Yields Sour Mood Markets had been expecting a bumper quarter following an ebullient start to the year crowned by SpaceX's record-breaking IPO. ---- Forbion Raises $2.6 Billion in Boost to European Biotech Industry Dutch haul comes despite European drugmakers and investors warning the region is losing ground. ---- Hackers Use Chinese AI Tool to Hit South Korean Banks, Exposing New Risk The attacks were the latest to highlight the vulnerability of even hardened targets to hackers using freely available artificial-intelligence tools. ---- KKR Strikes Deal to Buy Private-Capital Fund Administrator Gen II Private-capital funds have proliferated in recent years as investors seek to reduce reliance on public markets. ---- NYSE Owner Launches Gold Futures in London The contract began trading Monday alongside new futures for silver, platinum and palladium. ---- Dan Ives Launches Another AI Fund Amid Conflict of Interest Questions A new closed-end fund carrying Dan Ives' name seizes o
French political crisis impacts European bank stocks! Société Générale (SCGLY.US) and Deutsche Bank (DB.US) fall over 5%. JPMorgan says the pullback may offer entry opportunities.
European bank stocks faced another round of sell-off on Wednesday, with Societe Generale and Deutsche Bank shares both dropping by more than 5% at one point.
BUZZ - BKV shares rise due to equipment supply agreement for Texas power project
On October 7, natural gas producer BKV Corp (BKV.N) saw its shares rise by 10.3% to $24.33 after the company signed an equipment supply agreement for a planned gas-fired power generation project in Texas. This project is backed by a cost support agreement with a hyperscale cloud services provider. The supplier will provide approximately 1,200 megawatts of power generation equipment, with deliveries beginning in September 2028. The cost support agreement covers about 90% of the payments BKV is due to make under the equipment supply contract by March 31, 2027. All 11 brokerages have rated the stock "buy" or higher, with a median target price of $35, according to data compiled by LSEG. Including intraday fluctuations, BKV shares are down 10.5% year-to-date. (For the convenience of non-English speakers, Reuters provides automated translations of its reports into several languages. Since automated translation may contain inaccuracies or fail to capture intended context, Reuters does not guarantee the accuracy of such translations and provides them solely for readers' convenience. Reuters accepts no liability for any damages or losses arising from the use of automated translation features.)
