EMEA Morning Briefing: Traders Assess Stalled U.S.-Iran Talks

MARKET WRAPS

Watch For:

Germany GfK consumer climate survey; trading updates from Deutsche Boerse, Galp Energia

Opening Call:

European stock futures traded mostly higher early Monday. Asian stock benchmarks rose; the dollar was little changed; Treasury yields edged higher; while oil rose and gold was flat.

Equities:

Stock futures point to a higher open in Europe as markets continue to eye Middle East developments after the latest round of peace talks in Pakistan was called off, and President Trump said any further negotiations with Iran could take place by phone instead.

Meanwhile, Iran's Foreign Minister Abbas Araghchi will travel to Russia to meet with President Vladimir Putin on Monday, according to reports from Tasnim, an Iranian news agency, and RIA Novotsi, a state-owned Russian news agency.

Asian indexes rose early Monday after both the S&P 500 and the tech-heavy Nasdaq indexes posted record closing highs last Friday.

U.S. equities have "held firm, complicating the USD outlook and highlighting a potential regime shift: energy shocks now bite assets unevenly, with AI-led equities showing unusual resilience," OCBC Group Research said.

Forex:

"The hardening of positions [between the U.S. and Iran], along with measures such as naval blockades and military warnings, has significantly reduced expectations of a short-term de-escalation" of the conflict, XS.com's Antonio Di Giacomo said.

"This backdrop has supported the strengthening of the U.S. dollar," the senior market analyst added.

Bonds:

If bond yields are in a secular, multidecade uptrend, as seems likely, investors face two knotty problems. Higher yields translate into lower prices for bonds, which is bad enough. And if the reason for those rising yields is inflation, bonds won't provide much cushion for riskier assets, notably stocks.

Bond yields will be pushed inexorably higher by the U.S. government, said Albert Edwards, Société Générale's global strategist, in a recent client note.

Federal budget deficits, running at 6% of U.S. gross domestic product, will result in "fiscal dominance" as the Federal Reserve bends policies to the Treasury's massive borrowing needs. That will produce inflationary "monetary debasement, which will be the expedient alternative to attempting to cut spending in a serious manner and arousing voters' ire," he concluded.

Energy:

Near-term bullish oil-price risks are skewed to upside as the second round of U.S.-Iran peace talks fail to materialize, Citi Research's Max Layton said.

Citi pushes back its base case for when the Strait of Hormuz is expected to reopen to end-May from mid-late April. It reiterates its Brent crude oil price's bullish target for up to three months at $120 per barrel.

Metals:

Many gold investors probably feel that bullion didn't behave as expected during the Iran war selloff. After a steep run-up, the precious metal took a dive.

Gold is supposed to be a hedge against geopolitical risk. What happened? "Given the oil shock, the market has revised its inflation expectations, " said Max Belmont, co-manager of the First Eagle Gold fund. That shift in investors' outlook also affected the value of the U.S. dollar and Treasury bond yields.

"Gold for us seems to have reacted quite rationally," Belmont says.

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Industrial metals continue to hold up well as strong restocking demand from China appears to be outweighing growth concerns, said ANZ Research.

Supply disruptions for aluminum and copper are also helping to protect prices. In particular, aluminum is the metal most exposed to the Middle East conflict, ANZ said.

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Iron ore rose in Asia amid lower inventories. Shipments of iron ore from Australia and Brazil fell last week from the prior week, while Chinese steel mills replenish their inventories before the Labor Day holiday, leading to a decline in port inventories, Tongguan Jinyuan Futures said.

Terminal demand could gradually weaken after the holiday and prices could fluctuate in the near term, it added.

TODAY'S TOP HEADLINES

Corporate America Is Minting Money-and Not Just in Tech and Finance

Big American companies are piling up profits despite war and consumer anxiety, bolstered by healthy sales growth.

With just over one-fourth of S&P 500 companies reporting results for the first quarter, Wall Street's expectations for earnings suggest big U.S. companies are far healthier than wider economic concerns might indicate.

The AI Frenzy Is Back and Lifting the Entire Stock Market to Record Highs

Artificial intelligence has saved the stock market-again.

Plenty of investors and even central bankers have watched the S&P 500 hit record highs and worried that share prices have lost touch with the reality of $100-a-barrel oil.

Aborted Pakistan Trip Leaves Trump With Tough Choices on Iran Talks

ISLAMABAD, Pakistan-President Trump scrapped a trip by U.S. envoys Steve Witkoff and Jared Kushner to Pakistan for talks with Iran, leaving himself tough choices over how to force Iran to make concessions the White House wants to strike a deal.

Trump said Iran can reach out to the U.S. if it wants to negotiate an end to the conflict. "They can call us," he told Fox News' "The Sunday Briefing," adding any talks would be conducted by phone.

King Charles Is on a Mission to Salvage U.K. Relations With Trump

WASHINGTON-King Charles III arrives in Washington on Monday to publicly celebrate 250 years since a nascent U.S. republic ousted his forebears, and privately ensure that a fraying trans-Atlantic relationship can cope with another two-plus years of President Trump.

The four day visit-billed as Charles's most high-wire diplomatic act since coming to the throne-will include a speech to Congress, the first time a British monarch has spoken there since 1991, a private audience with Trump and state dinner in Washington, as well as trips to New York and Virginia.

Elon Musk Is an Underdog in His $180 Billion Fight Against OpenAI

As Elon Musk's trial against OpenAI begins this week, legal experts and prediction markets agree that he will enter the Oakland federal courthouse as an underdog.

Since March, Kalshi has put his chances of victory at about 40% on average, down significantly from the 57% Musk touted in January when he posted on X, "Can't wait to start the trial."

Write to singaporeeditors@dowjones.com

Expected Major Events for Monday

06:00/GER: May GfK consumer climate survey

06:00/NOR: Mar Credit Indicator C2

10:00/UK: Apr CBI Distributive Trades Survey

23:01/UK: Apr Shop Price Monitor

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

(END) Dow Jones Newswires

April 27, 2026 00:18 ET (04:18 GMT)