Opening
Middle East supply risk is reasserting itself. Brent crude climbed to $104.20 in early European trading, the highest level since April 2025, as renewed concern over the Iran-Hormuz corridor adds a geopolitical premium that has proven sticky even as US shale output holds near record levels. The move carries direct implications for European energy importers and sets the tone for a session where macro uncertainty meets a near-decisive ECB meeting on the horizon.
AEX outperforms with a +0.79% gain, driven largely by ASML. The semiconductor equipment maker extended its recovery following two consecutive weeks of institutional accumulation. DAX trails at +0.31%, weighed by automotive exposure — Volkswagen and BMW both soft on lingering EV margin concerns.
What moved
- AEX +0.79%: ASML carries the index, up +1.14% on €694. ASML's EUV order book remains the dominant variable for the index; Q2 guidance revision expected mid-June.
- CAC 40 +0.54%: TotalEnergies leads the French index, benefitting directly from Brent strength. Luxury remains under modest pressure following softer China consumer data last week.
- DAX +0.31%: Chemical and industrial names steady. German industrial orders for April print on Wednesday — consensus expects a modest recovery but risks are asymmetric.
- FTSE 100 -0.18%: Energy gains offset by financials. Barclays and HSBC down ~0.3% each; sterling held above 1.27 limiting currency drag.
- EUR/USD -0.12% at 1.1672: Modest dollar strength after a US PMI reading that came in slightly above forecast. Not a breakout move — the range trade persists.
What to watch today
ECB June 11 (9 days away): Market pricing for a 25bp hike has reached 90%. The question is no longer whether the ECB hikes but what the forward guidance signals. Any hint of a pause signal from council members this week would reprice the rate path sharply — watch for Lagarde speaking at a Lisbon conference at 14:00 CET.
Brent above $104: European airline stocks (Lufthansa, IAG, Air France-KLM) are under pressure at the open. A sustained break above $105 would likely trigger a second wave of selling in transport-heavy names.
German industrial orders (Wednesday 08:00 CET): A key data point for DAX direction into the ECB meeting.
The number
$104.20 — Brent crude's current handle. For context: at $90 in January, $96 in March, and $104 today. Each $10 rise in Brent reduces Eurozone GDP growth by approximately 0.1–0.15 percentage points through the energy import channel. The ECB watches this carefully alongside core services inflation.