EU Midday Digest - 11 Nov 2026

Goldman Sachs added a third 25bp Fed hike to its forecast after October CPI printed 0.4% m/m, lifting the 10-year Treasury yield to 4.98%.

Asia-Pacific & European Session

The Nikkei 225 rose 1.31% to 61,249 in the Asia-Pacific session, supported by the AI complex after CoreWeave's outlook raise, while the Hang Seng fell 0.98% to 24,316 as Chinese equities lagged. European indices opened firmer, with the Euro Stoxx 50 up 0.68% to 6,371, the DAX adding 0.71% to 26,535 and the FTSE 100 gaining 0.43% to 10,798, helped by a softer German October CPI print of 2.8% y/y versus 3.3% previously. The VIX eased 4.52% to 18.58, and Brent crude advanced 1.49% to US$ 92.85 as traders weighed mixed signals on the Iran conflict. The dollar index firmed 0.27% to 102.51 while gold rose 0.81% to US$ 4,063, a divergence that reflects simultaneous demand for the greenback and for a hedge against sticky inflation. US equity and rates trading is thinner because the US bond market is closed for Veterans Day while exchanges remain open, leaving equities without real-time Treasury yield guidance.

Key Themes

• US Inflation & Fed Path: October CPI rose 0.4% m/m versus 0.3% expected, with core at 0.3% m/m versus 0.2% expected, marking a third consecutive hotter-than-expected inflation month. Goldman Sachs responded by adding another 25bp hike, bringing its cycle total to three, and flagged that a strong January inflation report could make a January hike the path of least resistance; its asset management arm cautioned that hotter inflation could force a more aggressive tightening cycle extending into 2027. The federal funds target range currently sits at 3.75% to 4%, and Bloomberg reports that hawkish Fed comments have cemented market expectations for a December rate hike. InvestingLive notes that Fed Governor Waller floated a potential 50 bps hike, a more aggressive scenario than Goldman's base case. The divergence matters for front-end pricing: the US 2-year closed at 4.73%, up 17.0 bp, while the 10-year closed at 4.98%, up 10.0 bp, and the 30-year at 5.35%, up 9.0 bp.
• German Inflation & ECB: Destatis reported Germany's October 2026 inflation rate at +2.8% y/y, down from +3.3% in September, with consumer prices falling 0.2% m/m, and attributed part of the moderation to the reintroduction of the tank discount. Despite the softer print, InvestingLive reports money markets pricing roughly a 79% probability of a 25 bps ECB rate hike in December, elevated by low gas storage levels that could lift retail energy prices during winter. Bundesbank President Nagel told Bloomberg the German economy is "on the mend" but stressed that structural reforms are still required. The tension between falling headline inflation and winter energy risk keeps the ECB hike debate alive even as the data soften, positioning energy as the swing factor for December pricing.
• Cross-Asset: Credit, Gold & Oil: The hot CPI print rippled through credit, with HYG closing down 0.43% at US$ 77.18, LQD down 0.75% at US$ 103.88 and EMB down 0.61% at US$ 91.98 on 10 Nov, while senior loans (BKLN) held up with a 0.10% gain at US$ 20.53. Gold nonetheless rose 0.81% to US$ 4,063, suggesting bullion is being bought as an inflation hedge even as higher yields raise its opportunity cost. Brent crude's 1.49% rise to US$ 92.85 adds a second inflation impulse, and the Financial Times cautions that oil traders may be pricing peace into the Iran conflict too quickly, leaving two-sided risk from re-escalation or a hawkish rates repricing. The EIA's upward revision of end-November natural gas storage by almost 70 billion cubic feet from its October forecast provides some offset on the energy complex. Together these moves argue for wider dispersion between inflation-sensitive and deflation-sensitive assets rather than a uniform risk-on or risk-off trade.
• AI Valuation & IPO Risk: CoreWeave's stock rose 11% after raising its outlook, and MarketWatch reported planned prepayments of US$ 9 billion easing debt concerns, while Bloomberg framed the move as reviving appetite across AI equities. Anthropic's IPO is the other focal point: the Financial Times frames the valuation debate as US$ 500bn versus US$ 4tn, an eight-fold range, and separately warns that shadow insider sales and circular supply-chain backing could cause after-market indigestion. Nvidia rebounded 4% per CNBC even as Bloomberg reported an internal probe involving CEO Jensen Huang, a governance overhang for a heavily index-weighted name. The combination of a blockbuster AI IPO, a relieved neocloud print and a governance question at Nvidia makes AI positioning unusually two-sided into the US session.
• Geopolitics & Regional Rates: Qatar announced a two-week window for diplomatic efforts on US-Iran tensions, though lingering differences suggest an immediate agreement may require repricing, per InvestingLive. In Asia, Japan's Ministry of Finance announced November 2026 issuance of 20-year JGBs and a Treasury Discount Bills auction on 18 Nov 2026, while the amended Chiang Mai Initiative Multilateralisation came into effect on 11 Nov 2026. The PBOC set the USD/CNY mid-point at 6.7191 versus a Reuters estimate of 6.6855 and injected 187 billion yuan of overnight reverse repos at 1.25%, a firmer fixing that leans against yuan depreciation. In Europe, the Financial Times identifies France and Belgium as the Eurozone members singled out in a bond sell-off during the Iran war, a re-pricing of idiosyncratic debt sustainability rather than a uniform move. These regional supply and policy signals argue for continued dispersion between core and fragile-member European paper and for continued PBOC management of CNY volatility.

13F Filings

13F holdings are as of quarter end (2026Q3) and describe positions then, not current trading; 15 of 115 tracked funds have filed. FMR (Fidelity) reported US$ 2,314bn across 5,555 positions, First Eagle Investment Management US$ 64bn across 420 positions, WCM Investment Management US$ 59bn across 218 positions and Davis Selected Advisers US$ 23bn across 117 positions. Among the funds that have filed, the most net buying was in CTAS (2 new, 4 added), SKHY (5 new, 0 added), STE (2 new, 3 added) and PLTR (1 new, 4 added). The most net selling was in SNPS (2 exits, 4 trims), BAP (0 exits, 6 trims), PODD (1 exits, 5 trims) and BNY (0 exits, 6 trims).

What to Watch

Fed Governor Bowman delivers "The U.S. Economy and Considerations for Monetary Policy" at the Council on Foreign Relations in Washington, D.C., the day's key central bank comment after Waller's 50 bps remark. Earnings reporting today include Siemens Energy (ENR.DE), E.ON (EOAN.DE), RWE (RWE.DE), ABN AMRO Bank (ABN.AS), Vestas Wind Systems (VWS.CO), Swiss Life (SLHN.SW), Recruit (6098.T), Franco-Nevada (FNV.TO) and Power Corporation of Canada (POW.TO), with Cisco Systems (CSCO), Applied Materials (AMAT), Siemens (SIE.DE), Allianz (ALV.DE) and Munich Re (MUV2.DE) scheduled for Thu 12 Nov. On levels, a break above the 10-year Treasury's 4.98% close would extend the bear-steepening signal, while a move back below the 2-year's 4.73% would suggest the market is fading the December hike; the US bond market's Veterans Day closure means equity trading lacks real-time yield guidance. The Euro Stoxx 50 at 6,371 and the DAX at 26,535 are the European benchmarks to watch against the German 2.8% y/y CPI print, while the Hang Seng at 24,316 remains the laggard. No consensus level identified for the day's scheduled releases beyond the CPI expectations already printed. The open question is whether the December dot plot signals a third Goldman Sachs-style hike or validates Waller's more aggressive 50 bps scenario.