EMEA Morning Briefing: Oil Prices Gain as U.S.-Iran Deal Remains Elusive

EMEA markets opened with a negative bias as oil prices rose due to stalled U.S.-Iran negotiations and escalating Middle East tensions. European stock futures remained flat, while the U.S. dollar and Treasury yields edged higher. Gold dipped amid geopolitical uncertainty, whereas copper gained on tight supply concerns from Chile. Meanwhile, former Fed Chair Powell warned against political interference in central bank independence.

MARKET WRAPS

Watch For:

Manufacturing PMI for EU, U.K., France, Germany, Italy; EU unemployment, monetary developments in the euro area; U.K. Nationwide house price index; no major trading updates expected

Opening Call:

European stock futures were little moved with a negative bias. Asian stock benchmarks mostly advanced; the dollar and Treasury yields edged higher; oil gained and gold fell.

Equities:

Stock futures in Europe were little changed with a negative bias and oil prices gained early Monday amid a lack of progress on the Iran war as it enters its fourth month.

President Donald Trump told Fox News in an interview that aired Saturday that the U.S. was "close to a very good deal," but suggested a potential return to fighting as an alternative. Iranian Parliament Speaker Mohammad Ghalibaf said Sunday there would be no deal unless Iran's rights were secured.

Meanwhile, Israeli forces pushed deeper into Lebanon, capturing the strategic high ground of Crusader castle in response to Hezbollah's recent drone attacks which killed Israeli soldiers and forced civilians to seek shelter.

The intensified hostilities could put the U.S.-Iran negotiations at risk. Tehran has made an end to fighting between Israel and Lebanon one of its conditions for a deal.

"Market participants seem eager to price in a resolution to the Strait of Hormuz situation but a potential deal to get to that outcome remains elusive after seven weeks of negotiations," said Amarpreet Singh at Barclays' Commodities Research.

Forex:

The U.S. dollar gained slightly as investors continue to track developments in the Middle East. "Optimism remained that a path to an interim 60-day agreement [between the U.S. and Iran] would be found," NAB's Taylor Nugent said.

However, "nothing has been finalized and headlines this morning suggest dialogue is ongoing." The markets' focus "remains on the still elusive deal between the U.S. and Iran," the senior economist added.

Bonds:

U.S. Treasury yields edged higher. The 30-year Treasury yield recently hit about 5.2%-its highest level since mid-2007-and is still hovering around 5%.

Yields are now up for three straight months, and it's the biggest three-month gain since December 2024, according to Dow Jones Market Data. "A 10-year yield above 4.5% is going to be attractive to a lot of investors," said Jason Vaillancourt, chief portfolio strategist with Columbia Threadneedle Investments.

"The Fed is gun shy and will rather err on side of doing nothing and leaving things stable," said Anna Rathbun, CEO of Grenadilla Advisory. "The recent bond yield spike may have been overdone and is now correcting itself slightly. But long rates should remain higher for longer for the foreseeable future."

Energy:

Oil prices climbed early Monday amid concerns that Israel's expanded military invasion of Lebanon could complicate a potential reopening of the critical Strait of Hormuz.

"The Strait of Hormuz remains closed, disrupting more than" 15 million barrels per day of the world's oil supply," ANZ Research analysts said. "The number of vessels taking on the risky transit has increased in recent weeks, but several have come under attack in recent days, underscoring the risks that remain for ship owners and crew," the analysts added.

Metals:

Gold prices edged down at the start of the week as markets await signs of progress in U.S.-Iran negotiations.

The major disagreements between the U.S. and Iran remain unresolved and military frictions near the strait are stoking geopolitical risk premiums in markets, Guoxin Futures analysts said. The dollar and Treasury yields continue to fluctuate at elevated levels, leaving precious metals without a clear directional catalyst.

Copper rose amid tight global supplies. The world's top copper producer, Chile, posted its lowest production for the month of April in 23 years, reinforcing expectations of tight global supplies, ANZ Research analysts said. The new chairman of the state-owned copper miner Codelco signaled that it will shift toward profitability over production volume, according to ANZ.

Meanwhile, the disruption of supplies from the Persian Gulf has put at risk around 20% of global copper supply.

Iron ore futures declined. Prices are facing some pressure from ample supply, said Nanhua Futures analysts. Global iron ore shipments increased significantly on a sequential basis, primarily driven by higher volumes from Australia, they said.

TODAY'S TOP HEADLINES

Former Fed Chair Powell Delivers a Pointed Warning, Wrapped in Abstraction

In a speech that dwelled on lofty civic themes, former Federal Reserve Chair Jerome Powell grew conspicuously specific about one thing on Sunday night: that the central bank cannot survive if any administration finds a way to remove its officials over policy disagreements.

Powell, now a Fed governor, accepted an award recognizing political courage from the family of former President John F. Kennedy at a ceremony in Boston. Speaking in generalities about institutions, the rule of law and the inheritance of American democracy, he named no president and aired no specific grievance.

Israel Captures Crusader Castle as It Expands Invasion of Lebanon

Israel expanded its military invasion of Lebanon, moving deeper into the country and capturing the strategic high ground of a historic Crusader castle it hadn't held for a quarter of a century, as it hit back at Hezbollah following drone attacks that have killed its soldiers and sent Israeli residents running to shelters.

The escalation is piling more pressure on Lebanon's fragile government and complicating negotiations between the U.S. and Iran, which has made an end to fighting on that front one of its conditions for a deal. But Israeli Prime Minister Benjamin Netanyahu has come under heavy pressure from critics who say he has allowed the U.S. to tie his hands in fighting the militant group.

Trump Wants Minerals, Health Data for Aid. African Nations Are Pushing Back.

A handful of African nations are rejecting American health aid, outraged by the Trump administration's demands for access to private health records and even minerals in exchange for lifesaving medicine.

A year after President Trump reversed decades of American policy toward poor countries and closed the U.S. Agency for International Development, some African governments are bridling at the conditions he has set for resuming funding to combat AIDS, tuberculosis and malaria.

Berkshire Hathaway to Buy Home Builder Taylor Morrison for $6.8 Billion

Berkshire Hathaway agreed on Sunday to buy home builder Taylor Morrison Home Corp. for $6.8 billion in cash.

The deal is one of the first big moves by CEO Greg Abel, who succeeded Warren Buffett as chief executive in January.

A Chinese-Owned British Car Legend Pitches a Complicated U.S. Comeback

Britain's Lotus is known for its lightweight sports cars, its appearances in James Bond films, and its many brushes with financial collapse.

Now, Lotus is attempting to mount a comeback unlike any in its 74-year history. Backed by a Chinese parent company in Zhejiang Geely Holding Group, which also owns Volvo Cars, Polestar and other brands, Lotus's future rides on a plan to build out new hybrid and electric sports utility vehicles and sedans, in addition to more gas-powered sports cars.

SoftBank to Plow $52 Billion Into French Data Centers

PARIS-SoftBank Group is promising to spend at least $52 billion on building a network of massive data centers in France, helping advance Europe's goal of tech independence with what would be the continent's largest artificial-intelligence infrastructure project.

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Expected Major Events for Monday

05:00/NED: May Netherlands Manufacturing PMI

06:00/DEN: Apr Central Government Finance & Debt

06:00/GER: Apr Retail Trade

06:00/UK: May Nationwide House Price Index

06:30/SWI: Apr Retail Sales

06:45/FRA: Apr Housing starts

07:00/TUR: 1Q GDP

07:00/SWI: 1Q GDP

07:00/TUR: May Turkey Manufacturing PMI

07:00/POL: May Poland Manufacturing PMI

07:15/SPN: May Spain Manufacturing PMI

07:30/CZE: May Czech Republic Manufacturing PMI

07:30/SWI: May procure.ch Purchasing Managers' Index

07:45/ITA: May Italy Manufacturing PMI

07:50/FRA: May France Manufacturing PMI

07:55/GER: May Germany Manufacturing PMI

08:00/EU: Apr Monetary developments in the euro area (M3)

08:00/POL: 1Q GDP

08:00/EU: May Eurozone Manufacturing PMI

08:30/UK: May S&P Global UK Manufacturing PMI

09:00/POR: Apr Retail trade

09:00/POR: Apr Industrial production index

09:00/EU: Apr Unemployment

16:59/NOR: 1Q Credit Indicator C3

16:59/AUT: May Unemployment figures

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June 01, 2026 00:15 ET (04:15 GMT)