Market Wrap: Higher commodity prices dampen gains in Europe

Monday morning brought higher crude oil and natural gas prices, primarily due to the lack of progress in US-Iran negotiations. The probability of a lasting agreement between the two countries, as implied by the Polymarket portal, is falling – the portal currently assigns a roughly 40% chance that this will happen before the end of June.

• A Brent barrel currently costs just under $104, whilst a MWh of gas on the Dutch TTF exchange is around $45.

This weighs on European indices, with the French CAC 40 (-1.2%) standing out as the clear underperformer. The pan-European STOXX 600 (-0.2%) and the German DAX (-0.4%) are both printing in red too, with the Polish WIG20 (1%) the only clear winner. 

At the top of the dashboards we find companies from the banking, energy and commodities sectors, which are benefiting from the receding prospect of the war coming to an end. 

Figure 1: European banking sector performance dashboard [1-day % move] (11/05/2026)

Source: xStation, 11/05/2026 (14:05)

Figure 2: European energy sector performance dashboard [1-day % move] (11/05/2026)

Source: xStation, 11/05/2026 (14:07)

Figure 3: European metals&mining sector performance dashboard [1-day % move] (11/05/2026)

Source: xStation, 11/05/2026 (14:06)

From a macroeconomic perspective, the main focus is on inflation figures from China. Both CPI (consumer) and PPI (producer) inflation came in well above expectations. The latter is particularly worrying, having reached a 45-month high (2.8%) in April. This is consistent with detailed data from recent PMI reports, which showed increases in input prices even before the outbreak of war in the Middle East. 

In the environment outlined above, the yuan is performing well – the USD/CNY pair has broken through the 6.80 level in recent days, a level last seen over three years ago.

Inflation has also edged up in Norway. The core measure rose to 3.2%, suggesting the need for further monetary tightening. Last week, Norges Bank raised its key interest rate to 4.25%. Markets are fully pricing in another rate hike later this year, assigning a probability of around 40% to two hikes in the period in question.

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Michał Jóźwiak

XTB Financial Markets Analyst

michal.jozwiak@xtb.com