Dusseldorf. At the start of the new stock market week, the Dax struggled to find a clear direction. At the end of the trading session, the leading German index was trading unchanged at 25,254 points. On Friday it was still up 1.2 percent at 25,231 points. The MDax with the medium-sized German stocks and the Eurozone leading index EuroStoxx 50 also closed unchanged.
Market participants are on guard because of higher bond yields in some European countries, such as France and Spain. The political uncertainty in these countries – and in Germany – is causing restraint on the markets. The high energy prices and bond yields are likely to keep investors busy in the coming days. At the same time, they continue to look at the effects of expensive oil on the economy.
The new economic data week began on Monday with the barometer from the consulting firm Sentix on the expectations of stock market professionals for the economy in the euro area in October. In addition, the purchasing managers' indices for the services sector in the eurozone and the USA were published for September and the producer prices for the eurozone in August. On the corporate side, Deutsche Telekom dedicated its first investor day to the topic of artificial intelligence (AI).
The euro fell to its lowest level since May 2025 on Monday. The common currency temporarily fell 0.8 percent to $1.1161 in Asian trading. Investors are increasingly concerned about political and fiscal risks in the eurozone.
France in particular is in focus. The premium for French government bonds over German federal bonds reached its highest level since 2011 last Friday. At the same time, reports of possible early elections in Spain increased uncertainty.
“Bond and foreign exchange markets are clearly signaling investor unease over the increasing instability of the French government and the erosion of the country’s fiscal anchor ahead of the 2027 elections,” said Lombard Odier’s Homin Lee.
JPMorgan strategists also see further downside risk for the euro. The common currency has not yet fully priced in developments on the French bond market and could weaken further, particularly against the Swiss franc and the yen.
In addition, the euro is being weighed down by the stronger dollar. The Bloomberg Dollar Spot Index rose to its highest level since late June on Monday. Following recent developments in France, investors are increasingly turning their attention to the fiscal situation of other heavily indebted countries in the Eurozone.
Germany and the other G7 countries agreed at the weekend to use emergency oil reserves in view of rising fuel prices worldwide. From now on and over four months, 100 million barrels of crude oil and diesel should actually be released under the coordination of the International Energy Agency (IEA).
100 million barrels roughly corresponds to the daily demand for crude oil that the IEA assumes worldwide. It is not yet known which country will contribute how many barrels. Investors in the oil market were unimpressed by the measure on Monday.
A barrel (159 liters) of US light oil WTI for delivery in November costs 0.5 percent less on Monday evening. However, a barrel of Brent crude oil, the most important type of oil for Europe, costs around 0.5 percent more at around $102.
Geopolitical risks have also increased again since the weekend. The Houthi militia in Yemen said it had fired rockets at facilities belonging to the Saudi Arabian oil company Aramco. There was initially no confirmation from Saudi Arabia.
Aramco boss Amin Nasser warned of ongoing bottlenecks. It could take up to two years to replenish global stocks, Nasser told a conference in London on Monday. "The system is already at its limit." The market for refined products is particularly tense.
Incoming orders in German mechanical and plant engineering fell in August. Orders fell by five percent in real terms compared to the previous year, as the industry association VDMA announced on Monday. All indicators declined: domestic demand fell by two percent, while a total of six percent fewer orders were recorded from abroad.
The decline from the euro partner countries, at ten percent, was twice as high as that from the non-euro countries at five percent. VDMA chief economist Johannes Gernandt spoke of a “slight setback” after two months of growth.
For the first eight months of 2026, the key German industry recorded an increase in orders of four percent. However, this is based on a weak previous year and two months with many large orders, explained Gernandt.
There is still a lack of new investment dynamics for a lasting upswing. In the less volatile three-month period from June to August, orders increased by a total of seven percent in real terms, driven by exports.
As expected, the mood among service providers in the Eurozone brightened in September. The Purchasing Managers' Index (PMI) determined by S&P Global rose by 1.4 points to 53.0 points, as S&P announced on Monday in London after a second estimate. This is the highest level since November 2025.
In Germany, the largest economy in the Eurozone, the indicator improved and is now above the growth threshold again. The indicator also rose in France. However, the increase was somewhat lower than initially estimated. The indicator for Spain increased unexpectedly and is well above the growth threshold. In Italy, however, the indicator deteriorated significantly. In Spain and Italy no initial estimate is carried out.
Armament: The shares of the armaments companies Rheinmetall and Hensoldt closed on Monday up 2.5 percent and 3.8 percent respectively. Chancellor Friedrich Merz offered Ukraine a comprehensive aid package during a surprise visit on Sunday. According to the federal government, the Ukrainian government and Ukrainian companies agreed on 14 collaborations with German defense companies with a total volume of around 6.6 billion euros.
BMW: According to a study, all European car manufacturers meet the European Union's CO₂ limits. Manufacturers have already met 75 percent of the requirements, according to a study by the lobby organization Transport & Environment, which was published on Monday. They have until the end of 2027 to fully implement it. It is to be expected that many manufacturers will achieve their goal before the deadline. However, BMW's papers closed unchanged.
