FRANKFURT (dpa-AFX) - Inflation and economic concerns fueled by the war in Iran remain the focal point for equity markets heading into the new week. Meanwhile, US President Donald Trump has demanded an "unconditional surrender" from Iran. Economic data already took a backseat last week, with the exception of the monthly US jobs report, which raised some doubts about the country's economic health.

While distorting effects, such as strikes, made interpreting the employment data difficult, the overall picture was not positive, explained expert Tobias Basse from NordLB. In any case, the US Federal Reserve is under pressure to act, and faster interest rate cuts are possible.

This is countered by uncertainties regarding the escalation of the Middle East conflict and the resulting rise in oil and gas prices. These bring inflationary risks, which generally argue against lower interest rates. A swift end to the war would therefore bring significant relief to financial markets, while a prolonged conflict carries correspondingly high risks.

According to US assessments, Iran's combat strength has been significantly weakened following attacks by the US and Israel. Nevertheless, the Iranian leadership is attempting to expand the war across the entire Middle East, targeting the oil and gas infrastructure of the Gulf States. Furthermore, maritime traffic in the Strait of Hormuz - a bottleneck for global oil and gas trade - has now come to an almost complete standstill, according to the maritime consultancy Joint Maritime Information Center (JMIC).

"Nearly a week after the start of the Iran war, its end is not in sight," wrote economists Christoph Balz and Marco Wagner of Commerzbank in their market assessment. In their "base scenario," they assume that the war and the resulting disruptions to shipping in the Strait of Hormuz will last only a few weeks.

"Given the goal of 'regime change' repeatedly cited by the US and Israeli governments, there is a risk that the US and Israeli attacks could drag on for several months, thereby hindering the transport of oil and gas for a longer period," the two experts stated.

In an extreme case, they estimate that one-fifth of global production for both oil and liquefied natural gas could be blocked from the world market. The price of oil could then rise to 100 US dollars per barrel (159 liters). For comparison: in the week now ending, the price of North Sea Brent crude for May delivery already rose by about a quarter, recently reaching nearly 91 dollars.

A continued and, above all, sustained rise in oil prices would likely push inflation back up. In the Eurozone, an inflation rate of 3 percent would be conceivable, which would slow economic growth, according to Balz and Wagner. The European Central Bank would then be forced to act.

As financial contracts on the futures markets show, investors are already pricing in a key interest rate hike by the ECB of 0.25 percentage points in the second half of the year.

However, that point has not yet been reached. Robert Greil, chief strategist at the private bank Merck Finck, also assumes a relatively short war of no more than three months in his base scenario. "A much faster end to the war seems less realistic to us, as does a much longer duration with, for example, a months-long closure of the Strait of Hormuz as of today." Oil prices - and thus inflation - would then only be elevated for a short time.

Although February data does not yet reflect the Middle East crisis, financial market participants will turn their attention to US inflation data mid-week. At first glance, inflationary pressure has eased significantly recently, and the data expected for February would normally suggest that the US Federal Reserve's inflation target is largely being met, according to Balz. That target is 2 percent.

"Normally," Balz emphasized. This is because the so-called core PCE rate for January - the Fed's preferred measure of inflation - which has not yet been published, is expected to be at least 3.1 percent. "Consequently, even a relatively favorable consumer price report should be interpreted with caution. The PCE deflator, published a few weeks later, should paint a less favorable picture."

On the corporate side, the earnings season continues. In addition to the 2025 results, investors are particularly interested in how companies view the new year and whether they can already estimate the potential consequences of the Iran war.

On Tuesday, automaker Volkswagen will open its books. In the US, investors will also look at quarterly figures from software and hardware group Oracle and its progress in its AI offensive.

Mid-week, Dax-listed consumer goods and adhesives group Henkel and defense company Rheinmetall will follow, before online fashion retailer Zalando, energy group RWE, truck manufacturer Daimler Truck, and reinsurer Hannover Re report on business developments on Thursday./mis/ag/men/jha/