MARKET WRAPS
European stocks rose on Thursday, building on Wednesday's lower close, as investor optimism for an end to the war in the Middle East lifted shares.
The FTSE 100, the CAC 40 and the DAX were up at the opening bell with tech being the strongest performing sector after Taiwan Semiconductor Manufacturing Co.'s first quarter result .
The moves followed those seen in Asia, where stock benchmarks largely gained, and where Japan's Nikkei reached a new record . Stocks across the Atlantic were also set for further gains.
This comes as mediators push for more talks and an extension of the cease-fire between the U.S. and Iran, and as President Trump said that Israel and Lebanon would hold talks Thursday.
"Hopes for a diplomatic off-ramp to the U.S.-Iran war continues to support the recovery in financial market sentiment. For markets the key issue is not the war's duration but whether both countries can reach a deal that will no longer impede freedom of navigation for vessels transiting the Strait of Hormuz," Brown Brothers Harriman said.
Despite the market's optimism, the current cease-fire in the Middle East remains fragile, Macquarie said, adding that the conflict could reignite and may include the Red Sea if no agreement is reached regarding Iran's nuclear program.
Approaching midday, the indexes remained in positive territory with the DAX largely flat and wavering between incremental gains and declines.
Elsewhere, the U.K. economy grew modestly and faster than anticipated in February, ahead of a surge in energy prices that will likely weigh on economic activity in the months to come.
Market Insight
The physical oil market is tightening as flows through the Strait of Hormuz remain heavily disrupted, ING said, adding that this growing constraint is creating a split between physical and paper markets.
Dated Brent, which reflects actual cargoes, is trading at a steep premium near $117 per barrel, while front-month Brent futures remain around $95, ING said.
Economic Insight
Central banks that were the most vocal hawks in the face of higher oil prices would revert to their pre-war outlooks in a peace and low oil price scenario, Macquarie said.
"In our view, there is the most room for the Bank of England (and maybe the European Central Bank) to revert back to their pre-war stances exactly because they became so much more hawkish upon the start of the U.S.-Iran war."
Goldman Sachs affirmed its forecast for two European Central Bank interest-rate hikes this year, but it pushed back their timings. It expects the ECB to raise interest rates in June and September , versus their previous expectation of April and June.
"This is because we expect energy prices to remain persistently high through the year, significant pass-through into inflation is likely in coming months and the ECB's communication has remained largely hawkish on the path ahead."
Chinese equities would still hold up better than most if the Middle East war were to re-escalate, Capital Economics said, adding that the country's broader economic resilience to the war is still intact.
U.S. Markets:
Stock futures gained Thursday, with Wall Street poised to build on Wednesday's session when technology stocks outperformed and propelled the S&P 500 and Nasdaq to new records.
Forex:
The dollar edged lower after reaching a six-week low overnight on renewed Federal Reserve independence risks and cautious optimism over an Iran war peace deal.
Sterling extended gains against the euro slightly and stayed higher versus the dollar after U.K. economic growth data for February came in better than expected.The figures, however, reflect a period before the Iran conflict.
The yen recovered some ground against the dollar. Japanese Finance Minister Satsuki Katayama, following a meeting with Treasury Secretary Scott Bessent, said the U.S. and Japan have agreed to maintain closer communication on foreign exchange rates.
The Australian dollar reached its highest since mid-2022, supported by better risk sentiment and solid employment data. Developments in the conflict in the Middle East will remain the key driver of the Aussie dollar in the short term.
Bonds:
Eurozone government bond yields fell in early trade, led by Italian BTPs and in line with that of Treasurys, but the falls are more pronounced.
"Bond markets grow increasingly numb to headlines out of the Middle East with supply and European Central Bank colour in focus," Commerzbank said.
Treasury yields edged lower, while the price of oil was stable, as investors built hopes on an extension of the Middle East cease-fire and the continuation of peace talks.
U.K. government bond yields fell amid investor hope about the prospects of the U.S. and Iran holding talks to end the Middle East conflict.
France's nominal government bond auction is expected to attract solid demand, while Spain's auction should be uneventful given the demand for spread products in the primary market, Danske Bank said.
The use of Treasurys as a hedge may have diminished but they will continue to play a role, Capital Economics said.
"The recent return of a positive stock-bond correlation has raised questions about the role of bonds in a portfolio, such as the traditional '60/40.'"
Energy:
Oil prices were holding broadly steady with Brent crude up 0.7% while WTI was up 0.8% amid the possibility of further talks between the U.S. and Iran.
Metals:
Gold prices continued to trade above $4,800 a troy ounce, supported by renewed hopes for de-escalation between the U.S. and Iran and a pullback in oil prices that is easing inflation concerns. Silver was up 1% to $80.41 an ounce, while platinum rose 0.9% to $2,150.20 an ounce.
EMEA HEADLINES
TotalEnergies Eyes Boost From Oil-Price Surge, Despite Hit to Production
TotalEnergies said it expects a boost to its financial results from higher oil and gas prices as the energy industry continues to weigh the impact of the war in the Middle East.
The French energy major said Thursday that it expects first-quarter production of oil and gas to be at the same level as the previous quarter, when it reported output of 2.545 million barrels of oil equivalent a day.
Repsol Signs Agreement With Venezuelan Government to Increase Oil Production
Repsol said it signed an agreement with the Venezuelan government and state-owned company Petroleos de Venezuela to reassume operational control at the Petroquiriquire oil asset and increase its oil production in the country.
"The agreement falls within the scope of the general license issued by the U.S. administration," Repsol said.
Monte dei Paschi Shareholders Reinstall Ousted CEO Lovaglio After Proxy Fight
Banca Monte dei Paschi di Siena shareholders voted to reinstate Luigi Lovaglio as chief executive, defying the recommendation of the departing board and capping weeks of governance turmoil at Italy's newly minted third-largest banking group.
A board list that included Lovaglio was the most popular among Monte dei Paschi's investors at the bank's annual general meeting held Wednesday, the lender said. The vote paves the way to give Lovaglio another mandate to integrate recently acquired Mediobanca after the bank's departing board pushed him out, revoked his powers and terminated his contract ahead of the meeting.
Tesco Broadens Guidance as Iran War Uncertainty Clouds Outlook
Tesco said it was issuing broader guidance for the fiscal year than it had planned due to heightened uncertainty stemming from the war in Iran, with inflation driven by the conflict expected to weigh on consumer spending.
The U.K. grocer said Thursday that it expects adjusted operating profit of 3 billion pounds to 3.3 billion pounds ($4.07 billion to $4.48 billion) for the 2027 fiscal year. For the 53 weeks ending Feb. 28, adjusted operating profit was 3.19 billion pounds.
Gucci Owner Kering Plans to Complete Structural Reset This Year in Bid to Revive Fortunes
French luxury giant Kering said it expects to complete a structural reset by the end of this year as it aims to turn around its fortunes after a lull in growth, particularly at flagship brand Gucci.
The group on Thursday held its capital markets day, outlining its new strategy to boost growth under the leadership of longtime autos executive Luca de Meo, who took over as Kering's boss in September with the aim of breathing new life into the beleaguered company.
easyJet Flags First-Half Loss as Middle East Conflict Bites
U.K. budget airline easyJet flagged an adjusted loss in the first half, partly driven by an increase in fuel costs caused by the Middle East war, and warned of increased uncertainty due to the conflict.
The London-listed airline said Thursday that it expects a headline pretax loss of between 540 million and 560 million pounds ($732.4 million-$759.5 million) for the half-year ended March 31. The company said demand was positive in the first half and its airline's load factor-a measure of how full planes fly-stood at 90%.
GLOBAL NEWS
China's Economy Starts Year on Strong Footing, but Iran Risks Loom
China reported accelerating economic growth to start the year, driven by robust exports, but shock waves from the Iran war threaten its momentum.
China's gross domestic product expanded 5% in the first quarter of 2026 compared with a year earlier, up from 4.5% growth in the fourth quarter of 2025, according to government data released Thursday.
Trump Aims to Force a Quick Iran Deal With a Slow Squeeze
Over a small, private dinner of spinach soup, scallops and Diet Coke on Monday night, President Trump told the Dutch king and queen that he wants to bring the war in Iran to a swift end.
(MORE TO FOLLOW) Dow Jones Newswires
April 16, 2026 04:49 ET (08:49 GMT)
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