The ceasefire in the Iran conflict, initially slated to last until Tuesday, is now in doubt following the U.S. announcement regarding the seizure of an Iranian freighter that attempted to break the American blockade—a move Tehran has vowed to retaliate against. Furthermore, Iran has stated it will not participate in the second round of talks that the United States hoped to initiate before the ceasefire expires this week.
Despite this backdrop, Kpler data showed that more than 20 cargo vessels—carrying petroleum products, metals, gas, and fertilizers—crossed the area on Saturday, marking the busiest day for this bottleneck since March 1.
Markets have not entirely abandoned hope for a resolution to the conflict, given the economic burden that the blockade of the strait imposes on both parties.
"(Monday's retreat) is the logical evolution following Friday's gains and pending the resumption of negotiations in Islamabad. However, it is also reasonable to expect an improvement in tone throughout the week and, at the very least, an extension of the ceasefire that ends this Wednesday," Bankinter analysts noted in their morning briefing.
"We are immersed in a normalization process in Iran, which will be unstable and irregular, but it seems reasonable to assume that the worst is now behind us. In this context, constructive macro data and healthy earnings growth will provide support to equity markets that are likely to trend from low to high during the week," they added.
Beyond geopolitics, corporate earnings and macroeconomic indicators are regaining center stage. On the macro agenda, highlights include the ZEW confidence index in Germany and U.S. retail sales (April 21); PMI business activity surveys in Europe and the United States (April 23); and the German Ifo index alongside the University of Michigan sentiment index in the U.S. (April 24).
On the corporate front, the week will be defined by the release of financial results. In the United States, key reports include: Northrop Grumman and General Electric (April 21); Boeing, AT&T Inc., and Tesla (April 22); American Express (April 23); and Procter & Gamble (April 24). In Europe, attention will focus on Akzo Nobel (April 22); Bankinter, Orange, SAP, and STMicroelectronics (April 23); and Eni (April 24).
Separately, a note of significant caution came from Australia, where the country's largest business lender, National Australia Bank (NAB), warned of a $500 million write-down amid forecasts that the war will increase loan defaults. NAB shares fell 3.6%.
After rising 2.2% on Friday on hopes of a Middle East de-escalation, the Spanish benchmark IBEX 35 was down 179.90 points, or 0.97%, at 18,304.60 points by 0705 GMT on Monday, while the pan-European FTSE Eurofirst 300 index retreated 0.91%.
In the banking sector, Santander lost 1.94%, BBVA fell 2.49%, Caixabank shed 1.43%, Sabadell dropped 1.25%, Bankinter slipped 1.23%, and Unicaja Banco lost 0.97%.
Among large-cap non-financial stocks, Telefónica edged up 0.13%, Inditex shed 1.20%, Iberdrola appreciated by 0.76%, Cellnex gained 0.31%, and oil major Repsol climbed 3.40% on the back of rebounding crude prices.
(Reporting by Tomás Cobos; editing by Benjamín Mejías Valencia)
