MARKET WRAPS

Stocks:

European shares were on the rise after Monday's rally as investors awaited further details on the U.S.-Iran interim peace agreement.

"Markets have clearly stabilised this morning after the surge of optimism that surrounded the deal yesterday," Deutsche Bank said.

"That comes as there's still a lot of question marks over how the deal will be implemented, as we don't have the full details or a text yet."

Oil prices fell as expectations that the Strait of Hormuz will reopen this week continue to unwind the geopolitical risk premium built into the market.

The reopening will remain a challenging logistical process

regardless of the start date, RBC Capital Markets said. "While we anticipate an increase in traffic as ships look to exit after 100+ days on the water in the Gulf, we think it will take months to reach anything close to February 27 levels."

Attention is now shifting to a series of central-bank meetings, with investors particularly focused on the Federal Reserve for fresh signals on the outlook for monetary policy.

The Fed is set to keep interest rates unchanged

Wednesday, but the policy debate is shifting decisively away from cuts, Generali Investments said. "Firmer inflation data make an easing bias very hard to defend."

Investors may need to prepare for a different Fed regime under new Chairman Kevin Warsh

characterized by greater uncertainty, higher volatility and asset prices that are more sensitive to economic data and policy developments, says Arif Husain at T. Rowe Price.

U.S. Markets:

Stock futures paused on Tuesday after the powerful gains that have sent the S&P 500 up 4% over the last three trading days, the best stretch of that timeframe in more than a year.

Investors are now awaiting Wednesday's Fed decision, which comes as the Bank of Japan hiked interest rates to 1%, the highest level in 31 years.

Forex:

The euro traded steady

against the dollar, falling back below $1.16 following Monday's slight recovery.

The dollar was flat

after modest falls in the previous session driven by the U.S. and Iran announcing an interim peace deal.

Bonds:

Eurozone government bond yields were stable , tracking calm trading in U.S. Treasurys, following a U.S.-Iran agreement to end hostilities. "Although yields remain below key marks, the U.S.-Iran deal begins to feel more and more like the ceasefire from late May," Commerzbank said.

Treasury yields remained steady

in early trade after Monday's declines in the wake of the U.S.-Iran interim peace deal. "Reaction so far on the rates market has been predictably muted," ING said.

According to Russell Investments, two-year Treasurys offer good value

as they are reflecting more tightening risk than what it believes the Fed is likely to deliver.

Energy:

In early European trading, Brent crude was down 0.5%, while WTI futures slipped 0.3%.

Lombard Odier reckons that full replenishment of oil reserves will take time , lasting well into 2027. They expect Brent crude prices to average $90 a barrel over the six months from the start of the conflict, and average $78 a barrel over 12 months.

Metals:

Gold prices held near Monday's gains

as expectations of improved energy flows and lower oil prices eased concerns about inflation and further interest-rate increases.

Gold chart

Comex gold futures were poised to test resistance at $4,400 an ounce, based on the daily chart, RHB Retail Research said. The futures staged a rebound for a second straight session on Monday, with latest price movements suggesting that market sentiment has turned positive.

Aluminum

Aluminum prices fell

as markets price out part of the geopolitical premium and increasingly shift toward a de-escalation scenario in the Middle East.

"Among the base metals complex, aluminium was the most exposed to the conflict narrative given the concentration of smelting capacity and key seaborne trade routes linked to the region," Sucden Financial said.

Iron

Iron ore prices across various futures contracts were mixed in early trade, with the most-traded contract on the Dalian Commodity Exchange edging 0.1% higher. Global iron ore shipments remain high despite lower prices recently, Nanhua Futures said.

EMEA HEADLINES

UniCredit's Bid for Shares in Commerzbank Rejected By German Government

UniCredit's bid for shares in Commerzbank was rejected by the German government, citing what it said was an aggressive approach from the Italian lender.

The government said its steering committee supported the independence of Commerzbank, and rejected UniCredit's offer to further exchange shares in the German bank.

Norwegian Air Shuttle to Buy Package Holiday Group Nordic Leisure Travel For $833 Million

Norwegian Air Shuttle agreed to acquire hotel and travel experiences company Nordic Leisure Travel Group for an initial $833 million as it seeks to boost revenue by integrating its flights with a network of hotels and experiences.

The low-cost carrier said Tuesday that the deal would bring together brands such as Ving, Spies, Tjareborg, Globetrotter and Sunclass Airlines with its Norwegian and Wideroe airlines.

After Iran Tensions, Europe Is Just Trying to Avoid a Fight at G-7

Europeans once thought they could win favor with President Trump by lavishing praise on him and pandering to his foreign-policy objectives. Those days are long gone.

As European leaders gather with Trump in person this week for the first time since the start of the Iran war, their goal will be simple: avoid a repeat of the cage match that took place on the White House lawn over the weekend.

Impact of Iran War to Persist Despite Deal Offering Hope for Peace, ECB's Nagel Says

The deal between Iran and the U.S. to end the fighting offers reason for hope, though the impact of the jump in energy prices from the war will continue to be felt, Bundesbank President Joachim Nagel said Monday.

"Fortunately, a ceasefire and the reopening of the Strait of Hormuz are now in sight. There is reason to hope for peace," Nagel said in a speech in Frankfurt. "Nevertheless, even if the Strait of Hormuz becomes navigable again soon, it will take months for the oil supply to return to normal."

GLOBAL NEWS

Bank of Japan Lifts Rates to 31-Year High

TOKYO-The Bank of Japan raised interest rates to a 31-year high, anchoring policy against the inflationary risks of a spike in energy costs caused by the war with Iran.

The central bank on Tuesday lifted its policy rate to 1% from 0.75%, bringing borrowing costs to their highest since 1995. The 7-1 decision snaps a pause stretching back to last December.

China's Consumer Spending Falls for First Time Since Covid

Consumer spending in China declined last month for the first time in more than three years and investment contracted further, highlighting how the world's second-largest economy has become increasingly lopsided.

Exports have driven much of China's economic momentum this year, creating a global trade imbalance that has stirred up geopolitical tensions, including a brewing trade conflict with Europe. Meanwhile, China has continued to struggle with weak domestic demand and a real-estate market in the doldrums.

Goldman Sachs Cuts Oil-Price Forecasts on Faster Gulf Supply Recovery

Goldman Sachs cut its oil-price forecasts after the U.S. and Iran reached an interim deal to end hostilities, saying Persian Gulf exports could return to prewar levels as early as late July-about a month sooner than previously expected.

The bank now forecasts Brent crude, the international oil benchmark, to average $85 a barrel this year and West Texas Intermediate $80 a barrel, down from prior estimates of $90 and $85, respectively. For next year, Goldman sees Brent at $75 a barrel and WTI at $70.

Trump Says Strait of Hormuz Will Be Fully Open by Friday Under Iran Deal

GENEVA-President Trump said the Strait of Hormuz would be fully open Friday, the same day the U.S. and Iran plan to finalize a peace deal in Switzerland that ends the four-month war and kick-starts nuclear negotiations.

"The deal is already signed and the strait is already partially opened," Trump said Monday while seated alongside French President Emmanuel Macron at the start of Group of Seven talks along the southern bank of Lake Geneva. "Ships are starting to go out now, and on Friday it will be completely opened," he said, adding that there would be "free sailing."

Trump's Personal Lawyer Was Said to Be Part of a Billionaire's Criminal Defense

A fleet of lawyers for Indian billionaire Gautam Adani pressed the Justice Department last year to drop a 2024 fraud case against the founder and chairman of energy and logistics giant Adani Group. They got nowhere. By the spring of 2025, senior DOJ officials had given the green light to proceed.

Then, according to seven people familiar with the matter and records reviewed by The Wall Street Journal, a powerful new player was said to have joined the Adani team: Boris Epshteyn, President Trump's personal attorney.

North America's World Cup Feels Like Three Different Tournaments

This year's World Cup was pitched as a showcase of North America's collective ambition, a chance for the U.S., Mexico and Canada to pull off a first-of-its-kind event across two borders showcasing their longstanding trade and cultural ties.

Instead, this edition of the world's most popular sporting event has highlighted, if unintentionally, the current tensions between the host countries at one of the most turbulent moments in their relationship.

The Race to Land an Iran Deal Loomed Large Behind Trump's UFC Birthday

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06-16-26 0515ET