MORNING BID EUROPE-France's debt strains, AI in focus

A look at the ​day ahead in European and global markets ​from Jiaxing Li.

French bonds remain ‌in ​hot water. After the benchmark 10-year yield topped 5% for the first time since 2002, it has continued to creep higher as ‌investors assess France's ability to restore its fragile finances. With more protests planned in the coming days, President Emmanuel Macron pledged on Wednesday to prevent a repeat of last weekend's violence. However, limited progress ‌in addressing the political chaos has left investors on edge, fearing prolonged unrest could complicate government ‌efforts to rein in spending at a time of mounting budget pressures.

Investors will be keeping a close eye on Moody's, which is due to review France's Aa3 sovereign rating on October 23. The ratings agency has a ⁠negative outlook ​on the country, ⁠meaning the next move is more likely to be a downgrade than an upgrade, which could add to pressure on ⁠French borrowing costs. The euro, however, has largely steadied after a month-long slide even with fiscal concerns in ​France and Europe's energy fragility attracting short sellers, as it has emerged as a favoured ⁠channel for bets on a stronger dollar.

Elsewhere, earnings from Wall Street's tech giants boosted the tech-heavy Nasdaq and led ⁠Wall ​Street to a higher close. But while better-than-expected earnings, including SpaceX reporting its first profit as a public company, eased some concerns over the sustainability and profitability of massive AI ⁠build-outs, the mood in Asian markets remained cautious. In early European trades, the pan-region Euro Stoxx 50 futures ⁠were down 0.7% at ⁠6,175. US stock futures, the S&P 500 e-minis, were down 0.63% at 7,751.3.

Key developments that could influence markets on Thursday: - Barclays Q3 earnings

- ‌Lockheed Martin, ‌Blackstone, and Dow Q3 earnings