Global Economy
European Markets Set to Open Lower After Iran Closes Strait of Hormuz
European equities are expected to start the day in the red as renewed Middle‑East tensions and the Iranian decision to shut the Strait of Hormuz weigh on investor sentiment. The move comes ahead of a busy earnings week and the release of U.S. inflation figures, while oil prices climb back toward $80 a barrel.
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European indices likely to slip at open
Pre‑market data points to a tentative start for Europe’s major bourses on Monday. The Paris CAC 40 could dip about 0.7% at the opening bell, while futures show the German DAX down 0.73%, the UK FTSE 100 slipping 0.23%, and the pan‑European STOXX 600 sliding roughly 0.53%.
Geopolitical spark: Iran shuts the Strait of Hormuz
Iran’s Revolutionary Guard Corps announced on Sunday that the strategic Strait of Hormuz will remain closed until further notice. The announcement was quickly followed by a statement from the U.S. military confirming new air strikes aimed at curbing Iranian military capabilities near the waterway.
This escalation follows former President Donald Trump’s claim on Wednesday that the cease‑fire brokered in June was no longer in effect.
Implications for inflation and earnings season
The renewed tension revives concerns over a global inflation surge, just as the first half of 2026 earnings season gets underway. U.S. CPI data for June, due on Tuesday, may show a modest slowdown in the headline 4.2% rate thanks to lower fuel prices, though analysts expect the trend to reverse as oil prices climb.
Oil markets react
Brent crude has rebounded toward the $80 per barrel mark, while U.S. West Texas Intermediate (WTI) is trading up about 4% at $74.30 a barrel.
According to maritime tracker Kpler, only six vessels passed through the strait on Sunday – the lowest figure in five weeks.
Analyst views
- ANZ research warns that hopes for a quick de‑escalation could be dashed after the weekend’s flare‑up.
- Tony Sycamore, analyst at IG Markets, says the modest oil rally suggests markets view the episode as a "blip within a fragile cease‑fire" rather than a full‑scale breakdown.
Overall, market participants appear cautious, with the immediate outlook leaning bearish for European equities.