EMEA Morning Briefing : Hope for U.S.-Iran Peace Talks Spurs Risk Appetite

MARKET WRAPS

Watch For:

No major economic indicators expected; trading updates from Kering, Publicis Groupe, Imperial Brands, Givaudan

Opening Call:

European stock futures were tracking higher early Tuesday in tandem with gains in Asian stock benchmarks; the dollar and Treasury yields were little changed; oil fell; while gold futures rose.

Equities:

Stock futures in Europe point to gains on hopes for further U.S.-Iran talks. The blockade of Iranian ports went into effect Monday after talks over the weekend failed to persuade Iran to relax its hold on the Strait of Hormuz.

President Trump said the "right people" in Iran still want a U.S.-Iran deal after talks in Pakistan over the weekend ended without an agreement.

Iranian Foreign Minister Abbas Araghchi told French Foreign Minister Jean-Noël Barrot that there had been progress in the negotiations on many issues, echoing comments by the Trump administration that suggest both sides see room to continue talking.

Risk sentiment has improved as Trump signaled that Iran had reached out seeking fresh negotiations, Commerzbank Research analysts said.

Forex:

The U.S dollar was little changed. The U.S. blockade of the Strait of Hormuz will probably "test the durability of the fragile cease-fire and threatens to push the USD back up if the cease-fire collapses," CBA's Carol Kong said.

Bonds:

Treasury yields were little changed as Mideast developments remain in focus. The U.S. blockage of the Strait of Hormuz raises more concerns about economic growth than about inflation. Futures markets keep pricing a prolonged Fed hold, while bets on a cut inch higher. The U.S. PPI inflation, due later, is forecast to accelerate to 1.1% from 0.7%.

Energy:

Oil futures were lower early Tuesday. "Financial markets continue to look through the conflict to possible barrels being back on the market," ANZ Research analysts said. "However, the continued closure of the Strait [of Hormuz] raises the risk that the recovery of supplies will take much longer than it would have if this disruption had ended in a few weeks," the analysts added. ANZ strategists project oil to remain above $90 a barrel for the rest of the year.

Metals:

Gold edged higher amid dollar weakness, which makes the precious metal cheaper for holders of non-dollar currencies.

"Any signs of diplomatic progress may help ease inflation concerns and support a recovery in bullion," Exness' Inki Cho said, noting U.S.-Iran talks in Pakistan over the weekend ended without an agreement.

"Gold's direction will remain closely tied to developments in the Middle East and their impact on energy prices and inflation expectations," the financial markets strategist added.

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Aluminum led gains across the base metals complex as U.S. President Trump's blockade of the Strait of Hormuz heightens concerns over further supply disruptions, ANZ Research analysts said.

Several producers in the Middle East, which account for 9% of global aluminum output, have declared force majeure as they are unable to fulfill deliveries. However, elevated prices may already be curbing demand, ANZ added.

TODAY'S TOP HEADLINES

Saudi Arabia Is Pressing U.S. to Drop Its Hormuz Blockade

Saudi Arabia is pressing the U.S. to drop its blockade of the Strait of Hormuz and return to the negotiating table, fearing President Trump's move to close it off could lead Iran to escalate and disrupt other important shipping routes, Arab officials said.

The blockade is aimed at raising the pressure on Iran's already crippled economy. But the officials said Saudi Arabia has warned Iran might retaliate by closing the Bab al-Mandeb-a Red Sea chokepoint crucial for the kingdom's remaining oil exports.

The Bond Market Is 'Moving On' From the Iran War

Wall Street traders have become preoccupied by one particular market indicator.

Some refer to it as the Treasury breakeven inflation curve and, while that's a bit of a mouthful, it's simply the market's expectation of average inflation over two periods.

How an Image Depicting Trump as Christ Sparked a Backlash on the Religious Right

WASHINGTON-President Trump's decision to post an AI-generated image depicting himself as a Christ-like figure sparked outrage on the religious right, triggering the most significant pushback from his Catholic and evangelical Christian supporters since he returned to the White House.

"We are a little bit beside ourselves," said John Yep, CEO of Catholics for Catholics, a nonprofit that has hosted faith events at Trump's Mar-a-Lago club and maintains close ties to the administration.

Blockade Plunges Oil Market Into Fresh Round of Turmoil

President Trump's order to blockade Iranian trade through the Strait of Hormuz and Tehran's promise to continue to choke the strait are leaving global energy markets in even deeper trouble than they were just days ago.

It isn't clear how ships can satisfy both U.S. and Iranian conditions on leaving the Gulf, according to shipbrokers and analysts. Tehran says international ships need to pay up to get through Hormuz, but Trump said he had instructed the Navy to interdict vessels that have paid a toll.

Louis Vuitton Owner Misses Revenue Views as Middle East War Dims Rebound Hopes

LVMH Moet Hennessy Louis Vuitton posted weak sales for the first quarter as the war in the Middle East held back growth and weighed on hopes of a rebound in demand for high-end goods.

The French group, regarded as a pacesetter for the industry, on Monday reported first-quarter revenue of 19.12 billion euros, equivalent to $22.42 billion. The figure marked a 6% decline in reported terms from a year earlier, but a 1% increase on an organic basis.

FedEx CFO to Step Down When Freight Spinoff Is Complete

FedEx announced after the closing bell on Monday that CFO John Dietrich will step down from his role on June 1 after the spinoff of the company's freight business is completed.

The parcel carrier said that Dietrich will no longer serve as executive vice president and chief financial officer as of June 1 "upon the successful completion" of the spinoff, which separates FedEx Freight into a new publicly traded company.

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Expected Major Events for Tuesday

05:00/FIN: Mar CPI

06:00/ROM: Mar CPI

06:00/SWE: Mar CPI

06:00/GER: Mar WPI

07:00/CZE: Mar CPI

07:00/SPN: Mar CPI

07:00/SVK: Feb Employment and average monthly wage in selected branches

07:00/SVK: Feb Turnover in selected branches of economy, incl Industry & Construction

08:00/EU: Mar Long term interest rates statistics

08:00/BUL: Feb Trade with third countries - preliminary data

08:00/BUL: Jan Trade with EU Member States - preliminary data

08:00/BUL: Mar CPI

08:00/FRA: Apr IEA Oil Market Report

11:00/UKR: Feb Trade

23:01/UK: Mar UK Nations and Regions Growth Tracker

All times in GMT. Powered by Onclusive and Dow Jones.

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This article is a text version of a Wall Street Journal newsletter published earlier today.

(END) Dow Jones Newswires

04-14-26 0015ET