European equities rise at open as oil retreats and sentiment lifts

European stocks started the session broadly higher.

• Eurostoxx gained 0.5%.
• Germany's DAX rose 0.3%.
• France's CAC 40 added 0.5%.
• The UK FTSE increased 0.4%.
• Spain's IBEX edged up 0.3%.
• Italy's FTSE MIB climbed 0.5%.

A key factor supporting the improved sentiment is the ongoing decline in oil prices. Brent crude dipped to just under $99 today, marking a sixth straight session of losses. The drop reflects improved supply prospects from Saudi Arabia and optimism over US-Iran talks, which have trimmed the geopolitical risk premium.

This is calming inflation worries and relieving some strain on bond markets. The 10-year US Treasury yield remains just below 5%, at about 4.95% today. Similarly, the German 10-year bond yield has eased to around 3.44%, after touching a peak of 3.57% last week.

This mix is proving helpful for European stocks, especially since oil had been a major macroeconomic drag on equities earlier this month.

Another point of attention today is the preliminary September PMI figures for France, Germany, and the euro area as a whole. They are expected to provide an updated assessment of economic activity and price pressures.

Apart from that, US futures are offering a more stable support without leading the move. S&P 500 futures are up about 0.1%, while Nasdaq futures are largely unchanged after the Nasdaq Composite set another record high at Tuesday's close.

Overall, markets are showing a moderate risk-on tone at the open today. Still, some caution remains as the bond market stays on edge despite the drop in oil prices.