EMEA Morning Briefing: Stock Futures Rise as Earnings, Mideast in Focus

MARKET WRAPS

Watch For:

No major economic data expected; trading updates from HSBC, BP, Bayer, Lufthansa, Continental, Saudi Aramco, Hugo Boss, Smith & Nephew, Travis Perkins, Capita, ConvaTec, Fresnillo, Zalando

Opening Call:

European stock futures were higher while Asia stocks broadly fell. U.S. Treasury yields rose, the dollar strengthened. Gold and oil gained.

Equities:

Stock futures in Europe were tracking higher as investors continue to parse earnings and track latest developments in the Middle East conflict.

Iran on Monday said there weren't any talks under way with the U.S. nor were any meetings planned, after President Trump said he had called off a major strike on the country to provide more time for negotiations on freeing up traffic in the Strait of Hormuz.

Iran's Foreign Ministry did, however, acknowledge that Iran was continuing talks with Oman on how to manage the Strait of Hormuz, which has been at the center of the stalemate between Washington and Tehran.

Meanwhile, investors are tracking corporate earnings. "Earnings growth has been the story," said Mona Mahajan, head of investment strategy and asset allocation at Edward Jones. "This slew of earnings showed not only capital expenditure spending increasing, but earnings and revenue backlogs increasing, along with meaningful revenue potential for the Magnificent Seven and the hyperscalers," Mahajan added.

Forex:

The dollar strengthened slightly ahead of U.S. economic data and as markets contemplate a new attempt to reopen the Strait of Hormuz via diplomacy.

Analysts at BMI, a unit of Fitch Solutions, reckon that the recent coordinated Japan-U.S. yen intervention is unlikely to reverse the structural forces driving depreciation. A U.S.-backed operation carries more weight than Tokyo acting alone, and the pledge of further action will give speculators pause. But any U.S. contribution will likely be constrained by size, BMI said. It expects the yen to weaken gradually toward 164 to the dollar as a wide interest-rate gap underpins carry trades.

Bonds:

Treasury yields were higher amid diplomatic efforts to reopen the Strait of Hormuz. Inflation fears eased following reports that talks were going on, although Tehran said that the U.S. wasn't part of them. The news came ahead of a batch of labor data which are likely to help markets gauge what the Fed will do next month.

Economists surveyed by the Wall Street Journal expect June job openings to decline in the JOLTS report due later in the day. Private-sector job creation in July is expected to decline on Wednesday and nonfarm payrolls are forecast to increase on Friday.

Energy:

Oil prices rose early Tuesday amid mixed signals over efforts to reopen the Strait of Hormuz. Iran appears to be "nearing an understanding with Oman over the Strait of Hormuz," Tickmill's Joseph Dahrieh said. Also, "President Trump refrained from ordering another round of military operations in the Middle East, reinforcing hopes for a diplomatic resolution."

However, "Iran refuted the existence of talks with the U.S., which could still limit the extent of the pullback in prices," Dahrieh added.

Metals:

Gold rose. The precious metal has been trading in a range over several weeks as the market contends between the rapidly changing Middle East situation and shifting U.S. monetary policy expectations, said Bas Kooijman, chief executive and asset manager of DHF Capital S.A.

Progress in U.S.-Iran talks could push oil prices down, limiting inflation concerns and driving bond yields lower, reducing downward pressure on gold, Kooijman said. Markets will be keeping an eye on U.S. labor data for any signals on the Fed's monetary policy expectations, Kooijman added.

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Copper rose. Signs of supply tightness were supporting prices across the base metal sector, ANZ Research analysts said. U.S. copper imports have surged in July, limiting the availability of copper in the international market, they added.

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Key cost support for the iron-ore industry is around $85/metric ton, according to Citi. At that price, roughly 6% of seaborne supply would be either at risk of curtailment or generating low single-digit margins, said the bank. Citi estimates an industry breakeven price of $66/ton, up 7% since its last update in May 2025.

"The curve implies that, while margins remain healthy for the major Australian and Brazilian producers, profitability is coming under increasing pressure for higher-cost producers," Citi said.

TODAY'S TOP HEADLINES

Iran Says No Talks With the U.S. on Hormuz Strait

Iran said Monday that there weren't any talks under way with the U.S. nor were any meetings planned, after President Trump said he had called off a major strike on the country to provide more time for negotiations on freeing up traffic in the Strait of Hormuz.

Trump said over the weekend that he had prepared to greenlight what he described as the biggest military attack since World War II before America's allies intervened.

Why Bessent Is Leaning on the Fed to Help Prop Up Japan's Currency

A little-used Federal Reserve backstop built for the 2020 dollar shortage is being put to a use it was never designed for: bankrolling Japan's defense of the yen. Treasury Secretary Scott Bessent wants the backstop made bigger.

Japan said Monday it planned to draw on the facility, a day after Bessent publicly encouraged the Fed to expand it. The arrangement would let Tokyo raise dollars to halt the yen's slide without selling the U.S. government debt that would otherwise pay for it.

The AI Boom Is Transforming the American Economy Beyond Recognition

The U.S. economy keeps putting more eggs in the artificial-intelligence basket.

Tech companies are spending hundreds of billions of dollars to meet AI computing needs and issuing billions of dollars of debt to help make those purchases.

Migrant Crisis Pits Spain's Leader Against Critics Across Europe

As most migrants left a tiny Spanish territory in North Africa this weekend, Prime Minister Pedro Sánchez pivoted to a new crisis-one playing out in Europe's halls of power.

His country had just experienced an extraordinary breach of sovereignty, with some 50,000 migrants illegally pouring into Ceuta from neighboring Morocco.

Ships Can't Move and Power Plants Shut Down as Drought Saps Europe's Rivers

A drought is wreaking havoc along Europe's rivers.

In Romania, authorities set off an explosion beside a river in a bid to divert much-needed water to a power plant. In Bulgaria, almost 200 vacationers had to be evacuated from a stranded cruise ship. In Germany's industrial heartlands, companies are curbing production and struggling to ship goods.

Anduril Weighs Baltimore Shipyard Investment to Build Drone Boats

Anduril Industries is in advanced talks with a Maryland port to build out a production site for the company's drone boats, people familiar with the matter said, a sign of the growing military demand for autonomous sea vessels and the potential for defense startups to revitalize American industrial infrastructure.

Southern California-based Anduril has signed a memorandum of understanding with the operators of the historic Sparrows Point yard, a 3,300-acre industrial site in Baltimore County with a deep-water port and a rich history of shipbuilding and steel manufacturing. Anduril's investment in building out a portion of the site for unmanned surface vessel, or USV, production could be in the hundreds of millions of dollars, the people said. The operation would involve manufacturing and testing the boats.

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Expected Major Events for Tuesday

00:01/IRL: Jul Ireland Manufacturing PMI

06:00/ROM: Jun PPI

07:00/SPN: Jul Unemployment

07:30/EU: Jul EuroCOIN indicator of euro area economic activity

08:00/ITA: Jun Retail Sales

10:00/FRA: Jun OECD CPI

15:00/DEN: Jul Foreign Exchange & Liquidity

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(END) Dow Jones Newswires

August 04, 2026 00:11 ET (04:11 GMT)