Please see the below article from Brooks Macdonald detailing their discussions on global markets. Received this morning 08/09/2026.
What has happened?
With US markets closed for Labor Day, trading was relatively quiet, leaving investors focused on oil prices and developments in Germany. Brent crude rose +0.75%, helping push the German 10-year Bund yield up +4.8bps to 3.39%, its highest level since 2011. Despite higher energy prices and rising rate expectations, European equities proved resilient. The STOXX 600 was little changed, with gains in France’s CAC 40 (+0.33%) offsetting declines in the FTSE 100 (-0.08%) and Germany’s DAX (-0.15%). Economic data was mixed, with Eurozone Q2 GDP revised up to 0.6% from 0.4%, while German industrial production fell -1.1% m-o-m, missing expectations.
Energy Markets Revive Energy Concerns
Geopolitical tensions in the Middle East continued to support energy prices. Following recent tanker attacks and reports of an attack on Saudi oil infrastructure, Brent crude rose to a six-week high of $97/bbl, while European natural gas futures gained +1.93% to €73.34/MWh. The move has rekindled inflation concerns across Europe. The one-year euro inflation swap rose 10.6bps to 3.37%, its highest level since May, while bond yields moved higher as investors reassessed how long central banks may need to keep policy restrictive.
Germany faces a difficult political balancing act
German politics also remained in focus after the AfD won 43.8% of the vote in Saxony-Anhalt’s state election, finishing just short of an outright majority. Chancellor Merz reaffirmed his commitment to the government’s reform agenda, ruling out any change in direction. Attention now turns to coalition maths. Neither the AfD nor the centrist parties can secure a majority alone, leaving the populist BSW in a potentially pivotal position. The most likely outcomes are either an AfD-backed minority government or a period of political stalemate that could ultimately lead to fresh elections.
What does Brooks Macdonald think?
With US markets reopening today, investors will have a fuller opportunity to react to the recent rise in energy prices and bond yields. So far, equity markets have remained relatively resilient, suggesting investors are still comfortable with the broader growth backdrop despite renewed inflation concerns. One area maybe worth watching is commodities. Copper reached a fresh record high on the London Metal Exchange yesterday, supported by supply concerns and the prospect of potential US tariffs. Alongside higher oil prices, this is a reminder that inflation risks have not disappeared entirely.
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Alex Clare
08/09/2026