Global Economy
European Markets Falter as Iran Closes Strait of Hormuz Ahead of ECB Decision
European equities are set to open lower on Thursday, pressured by Iran’s sudden shutdown of the Strait of Hormuz and the pending European Central Bank policy announcement. Futures point to modest declines across the CAC 40, DAX, FTSE 100 and Euro Stoxx 600, while oil prices stay muted despite the heightened geopolitical risk.
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Morning outlook for European equities
Major European exchanges are expected to open lower on Thursday as geopolitical tension spikes and the European Central Bank (ECB) is set to announce its monetary‑policy decision later in the day.
Key index futures
- CAC 40 (Paris): down about 0.21% at the open.
- DAX (Frankfurt): futures suggest a 0.06% decline.
- FTSE 100 (London): down roughly 0.31%.
- Euro Stoxx 600: expected to slip 0.27%.
Strait of Hormuz – a new flashpoint
The Strait of Hormuz, a crucial artery for global oil shipments, has been severely disrupted since the conflict escalated at the end of February. Although a few tankers still managed to pass, Iran announced on Thursday that it will close the strait to all commercial and oil‑carrying vessels in retaliation for recent U.S. strikes.
Tehran warned that any ship attempting to breach the closure will be treated as a target. Despite the warning, oil prices have remained relatively calm, staying below the $95 per barrel threshold.
Oil market reaction
Brent crude rose 0.38% to $93.45 a barrel, while U.S. West Texas Intermediate (WTI) gained 0.60% to $90.57.
Outlook
With the ECB’s decision still hours away, investors are likely to adopt a cautious stance. The combined effect of heightened geopolitical risk and the unresolved monetary‑policy outlook could keep European equities on the defensive.