EMEA Morning Briefing: Negotiators Close In on Deal to Open Hormuz

MARKET WRAPS

Watch For:

EU retail trade; Germany manufacturing orders; trading updates from Siemens, Merck KGaA, Swiss Re, Commerzbank, Henkel, Diageo, WPP, Zurich Insurance, Deutsche Telekom, Generali, Monte dei Paschi, NN Group, Rheinmetall

Opening Call:

European stock futures traded higher early Thursday, while Asian stock benchmarks were broadly lower; the dollar strengthened slightly; Treasury yields were unchanged; while oil futures and gold rose.

Equities:

Stock futures were higher in Europe amid growing optimism that a deal to reopen the Strait of Hormuz could be reached soon.

Iran and Oman were finalizing a draft agreement Wednesday to reopen the Strait of Hormuz that would give Tehran oversight of ships entering the Persian Gulf but wouldn't allow it to levy tolls or service fees, The Wall Street Journal reported, citing people familiar with the matter.

Despite the diplomatic efforts to open the strait, a deal could still fall apart or fail to open the waterway. Iran's Deputy Foreign Minister Kazem Gharibabadi said an agreement with Oman wouldn't necessarily open the waterway unless the U.S. met unspecified conditions, state media reported.

Meanwhile, investors continue to parse earnings, including several major U.S. tech company results. "Ongoing [U.S.] corporate earnings season continued to produce mixed reactions," said Antonio Di Giacomo, senior market analyst at XS.com, in an email. "Investors remained cautious following earnings releases from Advanced Micro Devices and SpaceX, whose results and outlook were viewed as insufficient to justify the elevated valuations currently assigned to much of the technology sector," the analyst added.

Forex:

The U.S. dollar edged higher. The dollar's potential to weaken is limited even if Friday's U.S. nonfarm payrolls report is worse than expected, TD Securities strategists said.

"Our base case is for the DXY dollar index to still stay above its 200-day simple moving average on the 99-handle under this scenario." The dollar has fallen significantly in recent days and investors are unlikely to accumulate bets against the currency until U.S. inflation data start to soften.

In case of a better-than-expected report, the dollar has more room to consolidate higher as a solid jobs report could increase expectations for U.S. interest-rate rises, they added.

Bonds:

Treasury yields were unchanged ahead of Friday's U.S. employment report after weaker-than-expected private payrolls data. Private companies added a net 44,000 jobs in July after a 98,000 jobs increase in June, ADP said.

Minneapolis Fed President Neel Kashkari said the central bank should start incrementally raising interest rates to avoid more aggressive hikes later.

Energy:

Oil prices rose in Asian trade Thursday, erasing their earlier losses, as traders watch for a formal deal to reopen the Strait of Hormuz.

"With Iran cautioning that an Iran-Oman deal doesn't necessarily lead to an imminent re-opening of the Strait of Hormuz, energy markets are paying closer attention to progress on the U.S.-Iran front," said Vivek Dhar, an analyst at Commonwealth Bank of Australia, in a report.

Metals:

Gold advanced. Efforts to resolve the Middle East crisis will remain the main driver for the precious metal, which has tumbled throughout the conflict as the oil shock spurred rate-hike views and haven flows strengthened the dollar. Progress toward a resolution could lower bond yields and benefit gold, while any setback could spark demand for the greenback and weigh on the precious metal, said Konstantinos Chrysikos at Kudo.com.

Markets are still pricing in a hike at the Fed's next meeting, but the odds of a hold are rising--a shift that could support bullion. The coming U.S. jobs data could influence whether more dovish views gather traction.

Copper was higher, driven by investors' concerns about potential U.S. tariffs. "Speculation that the U.S. will impose a tariff on copper imports has driven U.S. imports of the metal to more than 200,000 tons in July," ANZ research analysts said. This marks the biggest monthly inflow since 2014, they noted.

TODAY'S TOP HEADLINES

Negotiators Close In on Deal With Iran to Open Hormuz

DUBAI-Iran and Oman were finalizing a draft agreement Wednesday to reopen the Strait of Hormuz that would give Tehran oversight of ships entering the Persian Gulf but wouldn't let it levy tolls or service fees, people familiar with the matter said.

The parties have agreed on the main points of the draft-which would set up an inbound lane near Iran and an outbound lane near Oman-and have shared it with the U.S., countries in the region and Iran's top leaders, who still needed to sign off, they said.

Trump Has Called Warsh Repeatedly Since He Became Fed Chair

WASHINGTON-President Trump has spoken repeatedly with Kevin Warsh since he became chairman of the Federal Reserve, according to people familiar with the matter, maintaining a line of communication between a president and a central bank chief that departs from recent precedent.

The president calls Warsh in bursts, the people said-several times in a stretch of days, then quiet for longer periods. Trump has sought Warsh's counsel on a range of matters, including how the war in Iran and the rapid rise of artificial intelligence are affecting the economy, some of the people said. Warsh has been on the job for less than three months.

Scott Bessent's Yen Trade Has Unintended Consequences for the Markets

The joint U.S.-Japan support of the yen is unusual. The way it is being financed is unprecedented, and adds liquidity when the punch bowl of the U.S. economy and markets is already overflowing.

Put simply: America is printing dollars so Japan can buy yen. It isn't quite quantitative easing, because the Federal Reserve is lending Japan money in return for temporary ownership of Treasurys in repurchase agreements, rather than outright buying the Treasurys. But like QE it expands the Fed balance sheet and pumps billions of dollars into the economy.

Trump's Days-Old Hamas Disarmament Deal Is Already in Danger

President Trump's road map to disarm Hamas has wobbled in the days since he announced it, with Israeli airstrikes on Gaza and growing disputes over the terms threatening to collapse the effort to wind down the war in the enclave.

The Board of Peace, created by Trump to oversee Gaza's postwar transition, laid out a 15-point plan Friday for the decommissioning of Hamas's weapons and Israel's withdrawal. But Israel and Hamas never saw eye to eye on the terms, and the gap has widened in the five days since the announcement.

Meta Releases Coding Agent to Compete With OpenAI and Anthropic

Meta Platforms wants in on Silicon Valley's hottest product du jour: coding agents.

The company on Wednesday announced a new coding agent, called Muse Code, that it is pitching as a cheaper alternative to competitors.

FDA Approves First mRNA Flu Vaccine in Win for Moderna After Arduous Review

The Food and Drug Administration approved Moderna's mRNA-based flu vaccine Wednesday for adults ages 50 and older, clearing the first shot of its kind after a review process that nearly collapsed in February.

The vaccine, called mFlusiva, uses the same messenger RNA technology as Moderna's Covid-19 shots. It could reach pharmacies in time for the coming flu season, which typically starts in the fall.

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Expected Major Events for Thursday 00:01/IRL: Jul Ireland Services PMI

04:30/NED: Jun Consumer Spending

05:45/SWI: Jul Unemployment

06:00/ROM: Jun Retail trade

06:00/GER: Jun Manufacturing orders

06:00/GER: Jun Manufacturing turnover

06:30/HUN: Jun Retail Sales

06:30/HUN: Jun Preliminary Industrial Production

06:45/FRA: 2Q Flash estimate of job creation

07:00/SPN: Jun Industrial Production

07:00/SVK: Jun Internal trade, incl Wholesale & Retail

07:00/AUT: Jul Wholesale Price Index

07:00/CZE: Jun Industry, Construction

07:00/CZE: Jun External trade

08:00/ITA: Jun Industrial Production

08:30/UK: Jul S&P Global UK Construction PMI

09:00/EU: Jun Retail trade

09:00/CYP: Jul CPI

10:00/IRL: Jul Monthly Unemployment

12:30/CZE: Czech interest rate decision

23:01/UK: Jul BRC-Sensormatic IQ Footfall Monitor

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August 06, 2026 00:14 ET (04:14 GMT)

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