EMEA Morning Briefing : Stock Futures Fall Amid Cautious Mood
SSTK
Published on 07/01/2026 at 12:18 am EDT
MARKET WRAPS
Watch For:
Manufacturing PMI data for eurozone, Germany, France, U.K., Italy; EU euro area inflation; U.K. Nationwide house price index; no major corporate trading updates expected
Opening Call:
European stock futures traded lower early Wednesday. Asian stock benchmarks were mixed; the dollar edged higher; Treasury yields were little changed; oil futures rose; while gold fell.
Equities:
Stock futures point to a lower open in Europe on Wednesday amid investor caution after a quarter where traders looked past an energy shock and worries about an AI bubble.
Thomas Carroll, equity strategist at Stifel, is expecting more of the same volatility that has interrupted the market's overall climb upward. "It's going to be incredibly volatile, which makes our jobs more fun," he said.
There is also the prospect of higher interest rates later this year. New Federal Reserve Chairman Kevin Warsh surprised investors in his debut by signaling more concern about inflation than many expected.
"There's just a general level of uncertainty right now around what central bank policy looks like across the globe," said Nathan Thooft, chief investment officer of equities and multiasset solutions at Manulife Investment Management. "The Fed is probably the epicenter of that."
Forex:
Intervention to support the Japanese yen could end up fueling demand for the U.S. dollar. Bannockburn's Marc Chandler said traders are buying puts as protection against a pro-yen intervention. That type of insurance would skyrocket in value if the intervention materializes.
Chandler expects the profits to be used to buy dollars, doubling down on bets that the greenback will continue to rise.
Bonds:
The Bank of England has space to judge the broader impact of the Iran war on inflation before it considers the next interest-rate move, Gov. Andrew Bailey said. Markets at the start of 2026 had expected rate cuts this year, but in March that needed to be taken off the table due to the conflict, he told CNBC in an interview at the European Central Bank's Sintra conference.
That led to investors raising bets on monetary-policy tightening, which, for instance, drove higher mortgage rates. "So we've had some tightening built into the curve which gives us some time to judge the pass-through, " Bailey said. However, the bank isn't "complacent" in bringing inflation down to the 2% target slower than previously anticipated.
Energy:
Oil futures rose early Wednesday after posting their sharpest quarterly drop since 2020 on Tuesday. Oil may also be supported by uncertainty over control of the Strait of Hormuz. This control remains a "contentious" issue, ANZ said.
"Iran reiterated its determination to control maritime traffic, raising the stakes" at the U.S.-Iran talks in Doha, the bank added.
Metals:
Gold has now entered a medium-term bearish consolidation zone below $4,115 an ounce--the major 38.2% Fibonacci retracement of the rally over October 2023-January 2026, said Swissquote Bank's Ipek Ozkardeskaya. This suggests that a deeper pullback is possible. The senior analyst expects gold bears to be targeting $3,680 an ounce.
Still, gold remains an attractive asset for long-term investors, given that many central banks sold part of their gold holdings to offset the energy-price jump and will eventually need to replenish these reserves, she said.
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Iron ore futures fell in Asian trade. Global shipments remain ample and portside inventories stay at historically elevated levels, Galaxy Futures said.
Meanwhile, steel demand from China's construction sector remains weak, while manufacturing-related demand is declining, a slowdown that could last for months. Net steel exports have also failed to maintain the strong levels seen during the same period last year, it added.
TODAY'S TOP HEADLINES
Trump Briefed on All-Out War Options in Iran but Opts to Stick With Talks
WASHINGTON-President Trump has weighed a return to all-out war with Iran, holding multiple conversations in recent days with Defense Secretary Pete Hegseth and Chairman of the Joint Chiefs of Staff Gen. Dan Caine on more strikes, but has decided to stick with diplomatic talks for now, according to U.S. officials familiar with the discussion.
The conversations have centered on whether the U.S. should abandon negotiations and resume full-scale attacks on Iran, the officials said, a move some of them describe as "finishing the job." While not making a final decision, Trump has told aides he believes another round of full-scale attacks could derail diplomacy and hurt Washington's chances of ultimately dismantling Iran's nuclear program.
Warsh Wants the Fed to Talk Less. That Only Gets Wall Street to Listen Harder.
Federal Reserve Chairman Kevin Warsh wants to talk less about monetary policy so markets can respond independently to economic data. Many investors, though, think he's already said plenty.
At his first Fed meeting as chairman, Warsh shortened the Fed's policy statement, declined to submit an interest rate forecast and deflected some questions on economic and policy matters to newly established task forces. But he still communicated a tougher line on inflation than previously assumed. Bond yields climbed. Stocks slid.
Saudi Sovereign-Wealth Fund Struggles to Find Winning Investments
Saudi Arabia's sovereign-wealth fund has swelled over the past half decade to hold $1.2 trillion in assets.
But the Public Investment Fund's vast portfolio is showing little in terms of returns on its investments, with most of the growth coming from government injections and borrowing, according to its annual report published Tuesday.
Iran's Diverging Priorities Are Jeopardizing U.S. Peace Talks
DOHA, Qatar-A power struggle inside Tehran is threatening U.S.-Iran peace talks, with civilian leaders seeking billions in frozen assets and hardline military officials pressing for control of the Strait of Hormuz, said officials familiar with the negotiations.
Civilian leaders headed by President Masoud Pezeshkian are aiming to free up billions of dollars in frozen funds to bring some relief to the millions of Iranians struggling with the economic aftershocks of the war and the critical damage to its oil industry.
Anthropic Reaches Deal With Trump Administration to Restore Access to Fable AI Model
WASHINGTON-The Trump administration and Anthropic have reached an agreement to restore access to the company's most recent general-access artificial-intelligence model, resolving a fight that showed how the White House is intervening to address security concerns in the fast-growing industry.
Under a deal announced Tuesday evening, Anthropic would address the workarounds that researchers at Amazon used to evade the safeguards for Fable, a public version of Anthropic's powerful Mythos model that is capable of carrying out cyberattacks, Commerce Secretary Howard Lutnick said on X. The guardrails are critical for the company to release the model publicly.
How Western Automakers Are Losing Their Grip on the Chinese Market
The mid-2010s were a golden age for Western carmakers in China, the world's biggest auto market. Brands such as Buick and Volkswagen thrived as a newly empowered class of buyers couldn't get into foreign cars fast enough.
But now that footprint is slipping away.
Getty Images Plans to End Shutterstock Deal After U.K. Imposes Conditions
Getty Images plans to terminate its merger agreement with Shutterstock after a U.K. regulator said the latter company must sell its editorial business in order for the merger to be approved.
Getty said Tuesday that the U.K. Competition and Markets Authority conditioned its clearance of the merger of equals on the sale of Shutterstock's editorial business-a condition Getty said it wasn't required to accept under the merger agreement.
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Expected Major Events for Wednesday
00:01/IRL: Jun Ireland Manufacturing PMI
04:30/NED: 1Q GDP - 2nd estimate
04:30/NED: May Retail turnover
04:30/NED: Jun Flash Estimate CPI
05:00/NED: Jun Netherlands Manufacturing PMI
06:00/UK: Jun Nationwide House Price Index
06:30/SWI: May Retail Sales
07:00/POL: Jun Poland Manufacturing PMI
07:00/TUR: Jun Turkey Manufacturing PMI
07:15/SPN: Jun Spain Manufacturing PMI
07:30/CZE: Jun Czech Republic Manufacturing PMI
07:30/SWI: Jun procure.ch Purchasing Managers' Index
07:45/ITA: Jun Italy Manufacturing PMI
07:50/FRA: Jun France Manufacturing PMI
07:55/GER: Jun Germany Manufacturing PMI
08:00/ITA: 1Q General Government Quarterly Accounts
08:00/EU: Jun Eurozone Manufacturing PMI
08:00/GRE: Jun Greece Manufacturing PMI
08:30/UK: Jun S&P Global UK Manufacturing PMI
08:30/UK: Jun Narrow money (Notes & Coin) and reserve balances
09:00/CYP: May Retail trade
09:00/EU: Jun Flash Estimate euro area inflation
09:00/GRE: May Labour Force Survey
10:00/POR: May Industrial production index
16:59/AUT: Jun Unemployment figures
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This article is a text version of a Wall Street Journal newsletter published earlier today.
(END) Dow Jones Newswires
07-01-26 0017ET