A look at the day ahead in European and global markets |
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By Gregor Stuart Hunter, Markets Correspondent |
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Just when you thought it was safe to go back in the water, the White House has ominously declared that everything will be back to normal soon. While global stocks have largely sustained the relief rally that followed Monday's wild swings, fear is again resurfacing as Iran vowed to step up its missile strikes. |
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Oil blockade to continue? |
The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, January 20, 2026. REUTERS/staff |
President Donald Trump's assurance that the war with Iran was "very complete" and could be "over soon" initially injected optimism into markets, even as Iranian hardliners rallied behind new Supreme Leader Mojtaba Khamenei and said their blockade of oil would continue. Within hours of Trump's statements, Iran's military dashed markets' hopes. "We are the ones who will determine the end of the war," Iran's Revolutionary Guards said. Such comments brought the exchange back to a familiar tempo with Trump then threatening to hit Iran "TWENTY TIMES HARDER than they have been hit thus far." As traders parsed the volleys of threats, Brent crude futures fell as much as 11% to lows of $88.05 per barrel, before paring their decline to 4.8%. |
Graphics are produced by Reuters. |
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China's export engine roars |
Stocks for their part have mostly held their ground amid signs of increased risk-taking by retail investors. Japan's Nikkei 225 jumped 2.1%, while South Korea's Kospi surged as much as 6.6%. MSCI's broadest index of Asia-Pacific shares outside Japan was up 2.2%, trimming losses sustained since the start of the conflict. And the rally looked set to continue in early Europe trade with pan-region futures up 1.0%, German DAX futures gaining 1.0%, and FTSE futures edging up 0.4%. U.S. equity futures, however, were more subdued, with S&P 500 e-mini futures EScv1 down 0.5% to pare Monday's rebound. Elsewhere on Tuesday, data showed China's export growth quickened in January-February, keeping the world's second-largest economy on track to top its record $1.2 trillion trade surplus over the course of 2026. And almost five years to the day since swathes of the global economy were shut off to fight the Covid-19 pandemic, Vietnam's trade ministry said it was again calling on local businesses to encourage their employees to work from home - this time as part of efforts to save on fuel amid supply disruptions and price surges triggered by the Iran war. |
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Key developments that could influence markets on Tuesday: |
- Company earnings: Oracle, Volkswagen, Persimmon, Kohl's
- Economic events: Germany - Trade balance for January
- Debt auctions: Germany - 2-year government debt
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Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias. |
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