JPM International Market Intelligence | Morning Briefing

20 SECONDS: Global Narrowing, Tech Broadening – Setting up for Rebound in Broadening Trade? Positioning & Macro Supportive. EU Macro Resilience but Challenging Politics – Germany and France in Focus. Catalysts.

• Global Equities higher this morning, led by Tech. “Very successful” talks between Bessent and Chinese counterparts (focused on AI), boosting sentiment despite news of Anthropic’s IPO delay.

• Lower oil also helping risk, as Trump willing to meet Iran president and resilient ME oil flows.

• Global narrowing, tech broadening has largely defined equities regime throughout September, but extent of moves could be setting up for a rebound in the broadening trade (chart below). No clear catalysts yet but Geopolitics could drive a shift (off-ramps incl. US/Iran, Trump & Xi).

• Global macro remains strong and a broadening business cycle is a key support: global corporate profits boomed 35%oya in 2Q26, and the profit surge is fueling the

strongest (and broad-based) capex gain in two decades. Notably, the sharp profit upswing has also been seen Europe.

• Positioning Intel tells us re-grossing persisted with +2z gross added globally last week. US crowding is still a drag, but medium-term set-up suggests a potential trough. Europe also rolled over (EU TPM ~25th %-tile since 2015; EU CTA 20th %- tile 12m) with a notable “tactical upside” signal emerging in EU TPM.

• EU macro resilience has been a key theme this year, but challenge for Europe is politics.

o Germany’s CDU suffered another big loss to AfD in this weekend’s state elections. Merz vowed to stay on as Chancellor, but odds he is out by 2027 spiked. Could we see a similar playbook to the UK’s Labour party? Approval has started to turn for Labour vs Reform (chart below).

o Growing fiscal concerns in France saw OAT-Bund spread break above 100bps for the first time in 14yrs. There is an attractive dislocation between political risk priced in Equities vs Bonds – we like to Short FR vs EU Domestics.

• Key catalysts THIS WEEK incl. slew of Fed speak; G7 foreign ministers meet; EU consumer confidence; UN General Assembly; US Treasury Market Conference; Global S&P PMIs; Zuckerberg gives keynote speech at Meta Connect; OECD publishes interim economic outlook; Trump-Xi Summit; US U.Mich Consumer Confidence