European markets wobble as Middle East tension spikes oil and rates stay high

Middle‑East fighting between the United States and Iran has revived concerns on European financial markets. Recent attacks have lifted crude prices by roughly ten percent, pressuring energy‑related equities and pushing the 6‑month Euribor in the euro area to a record 2.72 %. The surge has also fed expectations that central banks may keep policy rates higher for longer.

In Germany, the European Central Bank left its key rate unchanged, prompting a further rise in attractive fixed‑deposit offers – average twelve‑month rates now sit just above 3 %. At the same time, German stock‑market commentary notes that despite strong index highs, sectors such as semiconductors, AI and space are seeing sell‑offs, signaling vulnerability to a correction.

The Swiss franc has weakened against the dollar, reaching 0.8132 CHF per USD – its weakest level since June – as investors chase higher yields elsewhere. Analysts point to rising energy prices and a still‑elevated risk appetite as drivers.

U.S. President Donald Trump has floated a plan to use frozen Iranian assets to compensate for damage to commercial shipping, adding a geopolitical layer that could affect global supply chains and market sentiment. Investors are also watching the upcoming Federal Reserve rate decision for clues on future monetary tightening.