European Shares Likely To Open On Cautious Note

(RTTNews) - European stocks are seen opening on a cautious note Monday as the Middle East war entered its fifth week with no signs of slowing down.

With high-stakes peace talks hanging in the balance, Yemen's Houthis joining the war and the Pentagon reportedly preparing for weeks of ground operations in Iran, analysts now expect the war to run at least into June.

U.S. President Donald Trump described Iran's replacement leaders as 'very reasonable', raising hopes of a possible breakthrough as fighting and uncertainty continue in the region.

At the same time, he has made fresh threats, saying he would love to "take the oil in Iran" and the U.S. could take Kharg Island, Iran's oil export hub, "fairly easily." Gulf nations reported a series of attacks as Pakistan prepares to host U.S.-Iran talks on ending the war.

As energy risks mount, investors will scrutinize the U.S. JOLTS job vacancy figures, consumer confidence data, the ADP employment survey results, the final S&P manufacturing and services reports, and the March jobs report this week for direction.

Scheduled speeches by Federal Reserve Chair Jerome Powell and the influential head of the New York Fed, John Williams, later in the day will be analyzed for potential shifts in monetary policy.

Closer home, EU economic sentiment and Germany's latest inflation print may garner investor attention today ahead of key flash estimate inflation data from the euro zone due on Tuesday.

Asian markets were broadly lower, with Japan and South Korea leading regional losses on concerns that a prolonged Middle East conflict could bring a spike in inflation and trigger a mild recession in many developed countries.

Brent crude futures surged nearly 2 percent to $114.78 a barrel, while WTI crude futures were up more than 1 percent at $100.92 a barrel.

Spot gold reversed earlier losses to hold firm above $4,500 an ounce as the dollar dipped from recent highs.

U.S. stocks tumbled on Friday, with all three major indexes marking their fifth consecutive weekly decline to hit their lowest closing levels in over eight months, as the surge in oil prices along with other products such as fertilizer as a result of the Iran war fanned inflation and growth fears.

A measure of U.S. consumer sentiment eased to a three-month low in March, and one-year consumer inflation expectations jumped to 3.8 percent, raising concerns about the economic outlook.

Philadelphia Fed President Anna Paulson said the Iran war has created new risks to both inflation and growth without specifying what it meant for monetary policy in the near term.

The tech-heavy Nasdaq Composite slumped 2.2 percent while the Dow and the S&P 500 both plunged by 1.7 percent, as Brent crude prices jumped back above $110 a barrel despite U.S. pause on energy strikes until April 6th.

European stocks fell on Friday to extend losses from the previous session amid a lack of progress in bringing an end to the four-week-old Middle East conflict.

The pan European Stoxx 600 gave up 1 percent. The German DAX lost 1.4 percent, France's CAC 40 shed 0.9 percent and the U.K.'s FTSE 100 finished marginally lower.