European Midday Briefing: Shares Up, Oil Edges Higher as Iran-Oman Talks Remain in Focus

MARKET WRAPS

Stocks:

European shares edged higher Friday ahead of U.S. jobs data and news on talks in the Middle East.

Oil prices extended the previous session's gains as markets awaited the outcome of Iran-Oman talks on managing traffic in the Strait of Hormuz while closely monitoring risks in the critical waterway.

However, while an agreement would ease a key geopolitical risk, the broader conflict would remain far from settled, according to analysts.

"Despite clear signs of progress in recent days, the tenor of the rhetoric and growing distrust between the U.S. and Iran mean things could go from bad to worse once again," according to ING. "There's plenty of risk and uncertainty to this view."

High oil prices from the Middle East conflict present a challenge for major central banks due to inflation concerns, Tickmill Group said. U.S., eurozone and U.K. government bond yields climbed as investors increased bets on central banks raising interest rates in the coming months.

Investors are now awaiting U.S. nonfarm payrolls data for July for clues to the Federal Reserve's rate plotting path, as Chairman Kevin Warsh pivots the Fed away from providing forward guidance. A hotter-than-expected print could help reignite market expectations for rate hikes later this year.

U.S. Markets:

Stock futures were mixed Friday with Nasdaq futures leading gains amid calmer premarket trade in artificial-intelligence-related stocks after recent volatility.

Forex:

The euro traded steady. The currency has room to rebound further against the dollar, based on charts, said UOB.

The dollar index traded in a tight range. The focus now shifts to U.S. non-farm payrolls for July, which is a key input into the timing of the Fed's eventual tightening cycle.

The greenback could rise if data are more positive than expected. This would strengthen expectations for the Federal Reserve to raise interest rates, Commerzbank said.

The euro-dollar exchange rate has shown a bigger reaction to recent U.S. nonfarm payrolls data and could be particularly sensitive to Friday's release, ING said.

Bonds:

Yields on eurozone government bonds rose due to oil prices moving higher as doubts set in over whether there will be a deal to reopen the Strait of Hormuz.

Treasury yields edged higher with the focus on the Iran war and the U.S. nonfarm payrolls report at 1230 GMT.

Energy:

In early trading, Brent crude rose 0.9% a barrel, while WTI futures were up 0.6%.

Metals:

Gold prices were on track for their largest weekly gain since January as investors await key U.S. jobs data later on Friday for more cues on the interest-rate outlook.

Copper

Copper prices held above $14,000 a metric ton as fears of potential U.S. import tariffs continue to draw large volumes of metal into the country, tightening physical markets elsewhere.

Iron ore

Iron ore rose in early trade. 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.

EMEA HEADLINES

Volkswagen Backer Porsche SE Calls for Faster Overhaul After $3.5 Billion Hit

Volkswagen's major shareholder urged swift action to improve competitiveness at the German automaker as it booked billions of euros of impairments on its investment.

Porsche Automobil Holding SE, which holds over 53% of ordinary shares in Volkswagen, said it recognized 3 billion euros ($3.46 billion) of impairments in the first half of the year related to its investment, and another 200 million euros on its Porsche holding.

Monte dei Paschi Weighs Strategic Options as Intesa Circles

Banca Monte dei Paschi di Siena said it is looking at strategic options, with rival Intesa Sanpaolo proceeding with a $35 billion takeover bid after Banco BPM pulled out of talks for a competing merger proposal.

The Italian bank said Friday that it is analyzing, together with advisors, its strategic options with the goal of maximizing long-term value for all stakeholders.

Allianz Operating Profit Hits Record High on Asset Management Growth

Allianz's business volumes grew in the second quarter and operating profit hit a record high.

Europe's largest insurer by market capitalization booked a 10.6% rise in group operating profit to 4.87 billion euros, equivalent to $5.61 billion. It exceeded median analyst expectations, and rose to a record level, Allianz said.

Munich Re Cuts Revenue Outlook After Volume Drop in July Contract Renewals

Munich Re lowered its full-year insurance revenue outlook, after both volumes and prices fell at last month's round of reinsurance-contract renewals.

The German reinsurer said Friday that it now expects 2026 insurance revenue to be 62 billion euros ($71.46 billion), against its previous forecast of 64 billion euros. Revenue in reinsurance is expected to total 38 billion euros, down from 40 billion euros previously, it said.

GLOBAL NEWS

Three Things to Know About China's Export Boom

China's exports have surged this year, driving its economic growth while threatening to exacerbate tensions with trading partners. Here are three things to know about China's latest monthly trade data, released Friday by the country's customs agency.

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.

German Industry's Resilient Streak Continues Despite Lingering Uncertainty

German industrial production unexpectedly rose in June, extending a run of resilient manufacturing data that suggests Europe's largest economy has so far shrugged off the economic fallout from the war in the Middle East.

Factory output increased 0.2% on month after rising 0.7% in May, data agency Destatis said Friday. Economists polled by The Wall Street Journal had expected production to be unchanged.

U.S. Intel Finds Putin Could Test NATO's Resolve With Limited Incursion

WASHINGTON-Russian President Vladimir Putin could try to test NATO's resolve with a limited assault on an allied country in the next few years, according to new U.S. intelligence reports that posit possible scenarios ranging from a cyberattack to a small-scale land incursion.

The assessments, described by U.S. officials, come amid a shortfall in certain critical munitions that the military would need to confront Russia or China in a potential future war. The U.S. has severely degraded its stockpile of these weapons because of transfers to Ukraine after Russia's invasion, as well as the U.S. conflict with Iran. Stockpiles at risk include long-range Precision Strike Missiles and Army Tactical Missile Systems, as well as short-range Stinger surface-to-air missiles, other officials said.

China's New Export Engine: Supplying the Factories of the World

DONGGUAN, China-This city near Hong Kong helped turn China into the world's factory floor decades ago, churning out the cheap toys, shoes, clothing and electronics that powered the country's economic rise.

These days, Dongguan is at the center of a new industrial transformation: China is becoming a factory for factories. No longer just a producer of low-value consumer goods, China is now exporting more of the higher-value intermediate and capital goods that underpin global manufacturing, such as chips, precision machinery and robotic arms.

Can Iran's Diminished Diplomats Deliver a Hormuz Deal?

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

The concerns, based on a pattern of faltering diplomatic efforts and conversations with Iran's negotiators, come as top Iranian representatives in the talks are increasingly under fire at home from hard-line officials and commentators who argue they are cutting deals that sell the country short.

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.

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

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August 07, 2026 05:17 ET (09:17 GMT)

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