DAX slides as ECB meeting nears; Brent hits $94

On June 11, European stock index futures were mixed. DAX futures fell by 80 points to 24,160; the index has retreated nearly 6% from its peak this year. Futures linked to France’s CAC 40 and the Euro Stoxx edged higher. U.S. futures for the Dow Jones, S&P 500 and Nasdaq-100 recovered more than 0.35% after a sharp sell-off the previous day.

Traders focused on the European Central Bank decision due later in the day. Markets priced in a 25 basis-point rate rise. A quarter-point increase would move the ECB’s policy rate from 2.15% to about 2.40%.

Recent euro area inflation data showed headline consumer prices rose to 3.2% in May from 3.0% in April. Core inflation, which excludes food and energy, increased to 2.5% from 2.2%. Headline inflation had been 1.7% in January.

Longer-term borrowing costs in Europe rose. Germany’s 10-year yield jumped to about 3.076%, near its highest level since 2011. France’s 10-year yield reached roughly 3.732%, the strongest since 2009. Ten-year yields in Spain and Italy were around 3.53% and 3.86%, respectively.

Markets also reacted to overnight military strikes between the United States and Iran and to statements from Iran. Brent crude rose to about $94 a barrel and West Texas Intermediate traded near $90. The Red Sea handles roughly 12% of global crude shipments and Iranian warnings to close that route were cited as a factor in price moves.

European indices to watch included the DAX, CAC 40, IBEX 35 and FTSE MIB, with traders expecting the ECB decision to influence bond and equity markets across the region. The bank had reduced its policy rate from 4.5% earlier in 2024 to 2.15%.

Market participants were expected to monitor central bank communication, movements in bond yields and further developments in the Middle East for the rest of the trading session.