EU news monthly October 2026

Erste Bank Research Team Erste Bank

The AfD won two eastern German state elections in September, delivering a major political setback to Chancellor Friedrich Merz.

The EU annual inflation was 3.2% in August 2026, up from 3.0% in July. A year earlier, the rate was 2.4%. The lowest annual rates were registered in Sweden (0.3%), Estonia (1.3%) and Czechia (1.5%). The highest annual rates were recorded in Romania (6.3%) and Lithuania (5.6%).

The demand for cooling could double electricity consumption by 2050. According to the International Energy Agency, global electricity consumption for cooling buildings will rise from approximately 2,900 TWh in 2025 to 6,200 TWh by 2050. Currently, only about one-fifth of households in Europe have air conditioning, compared to 88% in the USA.

Airlines worldwide are cutting back on lower-cost flights due to high fuel prices, which have doubled since the start of the war in Iran.

Volkswagen’s supervisory board has approved a transformation plan for the group that entails cutting a total of 100,000 jobs. At the same time, management is reviewing the future of four German plants and, according to media reports, is considering discontinuing the Seat brand.

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Erste Bank Research Team

Erste Bank

At Erste Group we greatly value transparency. Our Investor Relations team strives to provide comprehensive information with frequent updates to ensure that the details on these pages are always current.

AUD/USD consolidates above 0.6950 amid risk aversion

AUD/USD consolidates in the Asian session on Thursday, trading just above 0.6950 as traders assess developments in the Middle East crisis. The Pentagon reportedly ordered readiness for potential strikes against Iran. This keeps the geopolitical risk premium in play, which, along with hawkish FOMC Minutes and elevated US bond yields, will likely keep the US Dollar underpinned at the expense of the pair.

USD/JPY slips below 158.00 as USD retreats

USD/JPY returns to the red below 158.00 in the Asian session on Thursday amid speculation that authorities will step in to prop up the Japanese Yen. Meanwhile, the US Dollar eases from near an 18-month high on profit taking, ignoring Wednesday's hawkish FOMC Minutes and the risk of a further escalation of tensions in the Middle East, adding to the pair's pullback.

Gold bulls remain on the sidelines as hawkish Fed and Middle East jitters underpin USD

Gold trims its intraday gains and trades near $4,125 during the early European session on Thursday, up around 0.35% for the day. A combination of factors helps the US Dollar retain a bullish undertone, which keeps a lid on the precious metal's bounce from a two-month low, touched the previous day.

Ripple and Stellar test key support amid rising downside risks

Ripple (XRP) and Stellar (XLM) remain under pressure and extend their corrections on Thursday as weakening derivatives metrics and broader macroeconomic headwinds weigh on sentiment. XRP and XLM approach a key support zone after three consecutive days of losses so far this week.

The UK 30-year gilt just hit a 1998 high. Is that good or bad for the British Pound?

The yield on the UK's 30-year government bond, or gilt, went through 6% on October 1 for the first time since early 1998, and on Monday the Pound was at its strongest against the Euro since June 2025. The gilt market's 28-year high is mostly someone else's. Since early May, the 30-year gilt yield has risen about 0.15 of a percentage point and the US 30-year about 0.7.