EMEA Morning Briefing: Stock Futures Edge Higher as Markets Parse Bessent's Iran Measures

MARKET WRAPS

Watch For:

Germany GDP, ifo business climate index; France consumer confidence survey; trading update from Gold Fields

Opening Call:

European stock futures traded higher early Tuesday. Asian stock benchmarks largely fell; the dollar and Treasury yields were slightly higher; oil futures rose; while gold fell.

Equities:

Stock futures point to a higher open in Europe on Tuesday.

Treasury Secretary Scott Bessent outlined plans Monday to inflict an "economic D-Day" on Iran.

"The actual announcement came across as much less dramatic than anticipated, with a wide gap between the rhetoric and the substance," said Jorge León, head of geopolitical analysis at Rystad Energy. "What we have seen so far looks much more like an expansion of the existing sanctions regime than a fundamentally new economic weapon."

Traders largely shrugged off headlines. "These grand assertions that the Trump administration makes-they get reversed very quickly," said Mike O'Rourke, chief market strategist at JonesTrading. "From a markets perspective, they tend to get ignored."

Forex:

European currencies consolidated on Monday, with last week's broad rally interrupted by a modest dollar recovery, said DBS's Philip Wee. "GBP remains the strongest of the pack," Wee said, noting it is the only European currency to post year-to-date gains after the U.S. jobs report earlier this month.

Meanwhile, "against the strong expectations for a European Central Bank rate hike next month, EUR/USD will need further policy disappointment in the US to return to push above its end-2026 level of 1.1746 and turn positive for the year," Wee said.

Bonds:

Higher borrowing costs beget higher yields, especially without a credible fiscal plan, said Sonali Basak, chief investment strategist at iCapital. Fiscal credibility is crucial to compressing the term premium, which has steadily widened over recent months, demonstrating that inflation expectations alone aren't driving the selloff at the long end of the curve, she said.

Energy:

Oil rose as traders assessed new U.S. measures against Iran. "The market seems largely unfazed by Washington's push for tighter economic pressure on Iran, with traders treating the U.S. effort to nudge partners away from Iranian trade as marginal rather than market-moving," said ING.

Metals:

Gold has the potential to move toward $5,000 a troy ounce as continued central bank demand, fiscal risks and geopolitical uncertainty support a largely optimistic medium-term outlook, said Rania Gule of XS.com.

A weaker dollar and concerns around U.S. debt could also support gold demand, as gold prices become less dependent on any single catalyst, the analyst said. The copper market appears to be increasingly difficult to interpret, given a new set of forces affecting prices, centered on geographic arbitrage and trade policy, said Societe Generale.

Limited mine supply and growing demand from sectors such as AI have generally supported prices. However, tariff-related arbitrage has redirected large volumes of copper inventories toward the U.S., affecting stockpiles elsewhere and making the market difficult to analyze based on traditional frameworks alone, the bank added. Iron ore edged higher in Asian trading. Coking coal, a key steelmaking ingredient, is in short supply in China, after a deadly mine explosion in May, ANZ said. Both iron ore and coking coal are ingredients for making steel.

Prices are also likely supported by the prospect of mills restocking ahead of China's National Day holiday, ANZ added.

TODAY'S TOP HEADLINES

Bessent Faces an Uphill Battle to Lower Bond Yields Through Treasury Buybacks

The Treasury caught investors off-guard by deciding to ramp up its bond purchases-but it will be hard for Secretary Scott Bessent to counter risingyields and falling bond prices unless he overhauls the entire buyback system.

The Treasury has used buybacks since 2024 to take older bonds that weren't actively traded out of circulation, giving investors space to buy newer bonds and thereby improving market liquidity. The operations have been regular and predictable and weren't designed "to mitigate episodes of acute market stress" or change the debt markets structure, the Treasury stated in May 2023.

Bessent Launches 'Operation Economic Outcast' to Isolate and Squeeze Iran

WASHINGTON-Treasury Secretary Scott Bessent said the U.S. is launching a new campaign to isolate the Iranian regime, warning that countries and companies that do business with Tehran will face the wrath of the Trump administration.

"Let there be no ambiguity as to the position of the United States: An economic engagement of any kind with this murderous regime will expose those responsible to the full reach of American power," Bessent said Monday during a press conference.

The Warnings That Came Before a War Now Reaching the Six-Month Mark

WASHINGTON-Days before going to war with Iran in February, President Trump summoned his intelligence chief to the Oval Office to ask whether a full-on assault was a good idea.

Iran was at its weakest point in decades, senior aides and Israeli Prime Minister Benjamin Netanyahu told him, providing Trump the rare opportunity to dismantle Iran's nuclear program and bolster his legacy as a peacemaker. The question was whether a large-scale attack would work and possibly topple the regime.

Zohran Mamdani Is Turning His Fire on Amazon

The progressive agenda of New York City's socialist mayor is bringing him head-to-head with Amazon.com.

Zohran Mamdani pulled off a historic victory in New York City's November mayoral race running on an antiestablishment, pro-worker platform. He campaigned on a rent freeze, free buses and city-owned grocery stores and proposed raising taxes on wealthy residents and companies.

SpaceX plans to put Nvidia-powered AI satellites in orbit next year

SpaceX is using a new partnership with Nvidia to accelerate its plans for artificial-intelligence data centers in space - setting the stage for those to go into orbit as soon as next year.

The companies unveiled their deepened relationship last month, when SpaceX SPCX CEO Elon Musk revealed that his company would exclusively use Nvidia chips going forward. On Monday, Musk said SpaceX aims to launch its first Starmind AI1 satellites by the fourth quarter of 2027 and "significantly scale" in the following year. In its prospectus, SpaceX had said it aimed for deployment in 2028.

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Expected Major Events for Tuesday 05:00/FIN: Jul Labour force survey, incl unemployment

06:00/SWE: 2Q Industrial inventories

06:00/GER: 2Q GDP - Detailed breakdown

06:00/NOR: Jul Labour force survey SA, incl unemployment

06:00/DEN: Jul Retail Sales Index

06:45/FRA: Aug Consumer confidence survey

07:00/SPN: Jul PPI

08:00/GER: Aug ifo Business Climate Index

08:00/POL: Jul Unemployment

09:00/LUX: Jun Trade

12:00/HUN: Aug Hungarian interest rate decision

13:00/BEL: Aug Business Confidence Survey

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(END) Dow Jones Newswires

August 25, 2026 00:20 ET (04:20 GMT)