European stocks are expected to open marginally higher on Tuesday as investors await President Donald Trump's deadline for Iran to reopen the Strait of Hormuz, a critical route for global energy supplies, later in the day [1]. According to IG data, London's FTSE 100 is projected to rise by 0.2%, France's Cac 40 by 0.2%, and Germany's Dax by 0.1% [1]. This comes as European markets return from a four-day Easter break, having ended Thursday's session in mixed territory [1].
Investor sentiment remains unsettled due to conflicting signals from the U.S. administration regarding a resolution to the conflict. President Trump has threatened to target Iran's civilian infrastructure if a peace deal is not reached within 24 hours, while also indicating that Iranian leadership is negotiating "in good faith" [1]. In a Monday address, Trump reiterated his demand for Iran to open the Strait of Hormuz by 8 p.m. E.T. on Tuesday, warning that the U.S. would destroy every bridge and power plant within four hours if the deadline is not met [1].
The uncertainty surrounding the Iran war has led to volatile trading in Asia-Pacific markets, with major indices experiencing losses during the morning session [1]. Investors are also closely watching the release of PMI manufacturing data for the U.K. and Eurozone in March, scheduled for later on Tuesday, to assess the Iran conflict's impact on the European economy [1].
CONCLUSION
European markets are showing cautious optimism ahead of President Trump's deadline for Iran to reopen the Strait of Hormuz, with modest gains expected at the open. However, ongoing uncertainty and threats of escalation are weighing on global investor sentiment, as evidenced by volatility in Asia-Pacific markets. The release of PMI data later in the day will provide further insight into the economic impact of the Iran conflict.