European equity futures were trading cautiously higher on Tuesday as investors held back from making large directional bets ahead of US President Donald Trump’s deadline for Iran to reopen the Strait of Hormuz to oil traffic.
The main European exchanges are set to return from the Easter break, with markets closed on Good Friday and Easter Monday.
Last Thursday’s close left the FTSE 100 modestly higher, with the index holding near recent highs.
The FTSE 100 futures edged up in early trade, alongside modest gains in France’s CAC 40 and Germany’s DAX, signalling a restrained open across the region.
Futures pointed to a muted start, with investors remaining cautious as geopolitical risks continued to dominate sentiment.
Iran ultimatum sets the tone
Trump has threatened that the US military could strike Iranian infrastructure targets if Tehran fails to reopen the Strait of Hormuz by 8pm ET on Tuesday.
The ultimatum — framed around threats to power plants and bridges — came alongside mixed signals from Washington, with Trump also suggesting that negotiations were ongoing and that a deal could still be reached before the deadline.
The Strait of Hormuz handles a substantial share of the world’s daily oil trade, and its disruption since late February has kept energy markets on edge and pushed fuel costs higher across Europe.
Also read: Europe’s inflation scar is back, and it’s changing how people behave
Energy costs rise and Germany eyes intervention
The surge in oil prices stemming from the Iran conflict has driven fuel costs higher across the continent, with Germany among the countries experiencing notable increases.
Berlin has already moved to limit the frequency of fuel price changes and is considering additional measures to contain the impact on consumers, including potential price controls.
Asia mixed, European data in focus
Asian equity markets were mixed on Tuesday as geopolitical uncertainty continued to weigh on sentiment.
Back in Europe, manufacturing PMI readings for the UK and the euro area are due later in the session, providing an early gauge of how the conflict and elevated energy costs are feeding through to industrial activity.
The immediate focus is Trump’s 8pm ET deadline and any military or diplomatic developments that follow.
Beyond that, traders will be tracking European manufacturing data for early evidence of economic strain from higher energy costs, as well as any signals from Berlin on the scope and timing of potential fuel market interventions.
With markets returning from the holiday break and geopolitical risk still unresolved, investors are likely to remain cautious, with any developments around the Strait of Hormuz expected to drive near-term price action.
The post FTSE 100 futures climb as Europe eyes cautious open amid Iran risk appeared first on Invezz
