A Look at the Day Ahead in European and Global Markets from Vidya Ranganathan

Europe's heavyweight software maker SAP reports third-quarter earnings today. The behemoth will set the tone for German and wider stock markets, as it comprises 15% of Deutsche Boerse (ETR:DB1Gn)'s DAX index with a market value of €261 billion ($284 billion).

SAP's cloud and business-planning software businesses have performed well this year, driving its share price up 53%. This is important context, given the recent volatility in stock markets due to various reports from major U.S. banks and chipmakers like ASML (AS:ASML).

It is unlikely that Monday's earnings report will provide new information regarding a long-standing issue for SAP: a probe by U.S. prosecutors into the firm and its contractors for potential price-fixing in government contracts.

Meanwhile, broader markets are counting down to the Nov. 5 U.S. presidential election, aligning trades with opinion polls that show improving odds for former President Donald Trump over Vice President Kamala Harris.

China's steady rollout of stimulus measures has boosted sentiment, with the latest being a quarter-point lending rate cut on Monday.

Bitcoin has hit a three-month high, rising 18% since Oct. 10, partly due to Trump's improving prospects, as his administration might take a softer stance on cryptocurrency regulation.

The dollar has also been rising, influenced by expectations that Trump's tariff and tax policies could keep U.S. interest rates high, undermining the currencies of trading partners.

Analysts suggest that rising U.S. real rates are driving the dollar higher, especially given that interest rates elsewhere are declining rapidly, providing the dollar with a yield advantage.

The euro has decreased over 3% in three weeks, falling below its 200-day moving average and nearing a 2-1/2 month low.

The gap between U.S. and German 10-year bond yields has widened to approximately 189 basis points (bps), as U.S. yields climb while German yields decline.

Key Developments Influencing Markets on Monday:

• Data: German producer prices inflation, UK house prices
• Speakers/Events: Fed's Lorie Logan, Neel Kashkari, Jeffrey Schmid, and Mary Daly; ECB's Gediminas Simkus; World financial leaders gather for the IMF-World Bank Annual Meetings.
• Earnings: SAP SE (ETR:SAPG), Unipol Gruppo, Bollore SE, Sandvik AB, Nucor Corp (NYSE:NUE)

($1 = 0.9203 euros)

(By Vidya Ranganathan; Editing by Edmund Klamann)