European stock markets are expected to open slightly higher on Tuesday as investors await a deadline set by U.S. President Donald Trump for Iran to reopen the Strait of Hormuz, which is due to expire later in the day. According to financial data firm IG, London's FTSE 100 index is projected to open 0.2% higher, while France's CAC 40 and Germany's DAX are expected to open up 0.2% and 0.1%, respectively. European markets are returning after a four-day Easter holiday, having closed with mixed results on Thursday.
Investors are struggling to interpret conflicting signals from the U.S. government regarding a potential resolution to the conflict. Trump has threatened to strike Iranian civilian infrastructure if Iran fails to reach a peace agreement within less than 24 hours, while also suggesting that Iran’s leadership is negotiating in "good faith." In a speech on Monday, Trump reiterated his demand that Iran reopen the Strait of Hormuz by 8 p.m. ET on Tuesday to restore access to this critical global energy supply route. He warned that if Iran fails to comply, the U.S. will destroy all of Iran’s bridges and power plants within four hours of the deadline.
Asia-Pacific markets experienced significant volatility on Tuesday, with major indices turning from gains to losses in early trading as war uncertainties weighed on investor sentiment. Investors will also closely monitor manufacturing PMI data for March from the UK and the Eurozone, to be released later on Tuesday, for further evidence of the conflict’s impact on the European economy.
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