EMEA Morning Briefing: Stock Futures Lower as Hormuz Reopening Doubts Weigh

MARKET WRAPS

Watch For:

Germany trade, industrial production; France jobless rate; trading updates from Allianz, Munich Re, Daimler Truck, Porsche SE

Opening Call:

European stock futures traded lower early Friday. Asian stock benchmarks were mixed; the dollar rose; Treasury yields were unchanged; while oil futures and gold strengthened.

Equities:

Stock futures point to a lower open in Europe, as doubts about the reopening of the Strait of Hormuz renewed concerns over disruptions to oil supplies.

Arab mediators working on a deal with Tehran to reopen the Strait of Hormuz said they fear that Iran's diplomats, who are under pressure from the country's hard-liners, lack the clout to guarantee compliance even if an agreement is reached.

"Geopolitical risk remains elevated," UOB's global economics and markets research team said.

Forex:

U.S. nonfarm payrolls report due later Friday could shape the dollar's next move, StoneX's Matt Simpson said. The reading is being closely watched as it could determine whether markets price in a greater or lesser than 50% chance of a Fed rate increase in September, the market analyst said.

Fed funds futures have recently trimmed expectations for two rate increases by December, with the probability of a September rate hike hovering at 54.6% at Thursday's close, he noted. "If the report undershoots expectations, it could further reduce those odds and weigh on the U.S. dollar," the analyst added.

Bonds:

It would be a mistake for the Federal Reserve to tolerate elevated inflation in pursuit of higher productivity growth, St. Louis Fed President Alberto Musalem said.

The best thing that a central bank can do is ensure that there are stable prices, Musalem said. That, he added, gives businesses a solid foundation to plan the investment and innovation that fuel economic and productivity growth.

"The job of fostering productivity growth is better suited to fiscal and regulatory policy," Musalem added.

Energy:

Oil rises in early Asian trading, as the market is left waiting for a deal between the U.S. and Iran to reopen the Strait of Hormuz.

"The current diplomatic exchanges have merely raised hopes that tensions could ease. They do not mean that an agreement has already been signed or can be effectively implemented," XS.com market analyst Linh Tran said. "Risks related to military activity, maritime transportation and oil supply from the Middle East remain firmly in place."

Metals:

Gold edged higher in Asian trading. Markets are likely monitoring signs of diplomatic progress in the Middle East conflict, Tickmill's Joseph Dahrieh said.

A move toward a resolution could push bond yields down and boost the bullion, while a setback would strengthen the dollar and place pressure on the yellow metal. "Any developments in the coming days could be pivotal for the metal," he said. The threat of U.S. import tariffs continues to pull copper off the international market and into U.S. warehouses, driving prices higher, ANZ Research said. The metal also found support from a media report that said the Democratic Republic of Congo has banned the export of copper concentrates, it added. Iron ore strengthened in early Asian trading. Global shipments have rebounded from a low level in July, while downstream steel mills' metal output has bottomed out as the supply and demand pressure on iron ore improves slightly, Nanhua Futures said.

However, based on the expected supply surplus in the second half of the year, there might be limited room for prices to rise, it added.

TODAY'S TOP HEADLINES

Trump to Impose 15% Tariff, Set Minimum Prices on Solar Panels and Components

The Trump administration will impose tariffs and set minimum prices on imported polysilicon, solar panels and their components, aiming to reshore clean-energy supply chains and reduce Chinese market control of an element critical for solar systems and semiconductors.

President Trump signed a proclamation Thursday that will set a 15% tariff on imports of the solar-energy materials and equipment. Companies that commit to building manufacturing facilities in the U.S. can apply for exemptions from the levies, which take effect on Dec. 4, according to the proclamation.

The Fed Can't Bank on Higher Productivity Lowering Inflation, Musalem Says

It would be a mistake for the Federal Reserve to tolerate elevated inflation in pursuit of higher productivity growth, St. Louis Fed President Alberto Musalem said Thursday.

In prepared remarks at the Center for Public Policy Debate in Brazil, Musalem said that while there's a good chance that artificial intelligence will deliver efficiencies that will help the U.S. economy in the future, the evidence currently available has not signaled significant enough gains to justify easier monetary policy conditions.

Israel Steps Up Attacks on Hezbollah, Clouding Talks With Lebanon

Israel has stepped up its attacks in southern Lebanon after weeks of relative calm, as delegations from both countries finished another round of U.S.-brokered talks exploring a diplomatic solution to years of fighting.

Israel accused the Iran-backed militia Hezbollah of violating a ceasefire on Wednesday and began striking what it said was the group's infrastructure in southern Lebanon after two of its soldiers were killed by an explosive device in a booby-trapped building in the village of Majdal Zoun, an area the Israeli military has held for months. Among the targets, the Israeli military said, were a Hezbollah command center and weapon-storage facilities.

Apollo to Buy European Budget Airline easyJet for $7.7 Billion

Apollo Global Management has agreed to buy British budget airline easyJet for the equivalent of roughly $7.7 billion, prevailing in a weekslong bidding war for the carrier.

The New York-based investment giant said Thursday it had followed easyJet for years, and that private ownership would give the airline the access to capital and flexibility needed to realize its full potential.

Meta Ordered to Pay $942 Million to Address Harm to Kids From Social Media

A New Mexico judge ordered Meta Platforms to pay more than $900 million and limit the time young people in the state can spend on its apps, significantly increasing the cost of the landmark child safety verdict against the Facebook and Instagram parent.

The judge said Thursday that Meta must create a new $567 million abatement fund in addition to paying $375 million in civil penalties that a jury previously ordered. The company must also enact certain safety features such as limiting the amount of time underage users in the state spend on Facebook and Instagram, hiding by default the number of "likes" on photos for such people and disclosing to users there the risks of its platforms.

Facing AI 'Apocalypse,' Once-Hot Software Companies Race to Reinvent Themselves

Sahil Aggarwal's timing appeared to be perfect for launching his software company in 2021. He raised nearly $30 million from investors, and by the following year, his startup, Rattle, was valued at more than $100 million.

Then along came generative artificial intelligence that could easily automate the kind of administrative work Rattle specialized in. Aggarwal tried to integrate AI, but said it felt like attaching an engine onto a horse-drawn carriage. The company teetered on the brink.

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Expected Major Events for Friday 05:30/FRA: 2Q ILO Unemployment and Labour Market-related indicators

06:00/DEN: Jun Industrial production & new orders

06:00/FIN: Jun Foreign trade

06:00/GER: Jun Foreign Trade

06:00/GER: Jun Industrial Production Index

06:00/UK: Jul Lloyds House Price Index

06:00/NOR: Jun Industrial Production Index

06:30/HUN: Jul CPI

06:45/FRA: Jun Foreign trade

06:45/FRA: Jun Balance of payments

07:00/SWI: Jul SNB foreign currency reserves

07:00/AUT: May Foreign Trade

07:00/SWI: Jul Consumer Sentiment Index

07:00/SVK: Jun Foreign trade

09:00/GRE: Jun External Trade (provisional data)

09:00/MLT: Jun Industrial Production Index

09:00/GRE: Jul CPI

09:00/CRO: Jun Foreign Trade

10:00/POR: Jun International trade statistics

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August 07, 2026 00:24 ET (04:24 GMT)

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