MARKET WRAPS
Stocks:
European shares were on the rise Monday while oil prices fell sharply as investors awaited a potential de-escalation in the war in Iran.
After days of threats to launch a new offensive against Iran, U.S. President Trump is prioritizing diplomacy and has said new talks with Iran will begin on Monday.
Trump said in a social-media post on Saturday that "the perimeters of a deal" to reopen the Strait of Hormuz had been hammered out.
Still, the situation in the Middle East remains uncertain. "On geopolitics, we are still not comfortable that we are out of the woods," Jefferies said.
Oil prices tumbled, with Brent crude down 5% to $83.55 a barrel.
"There is still a meaningful gap between talks resuming and the Strait of Hormuz fully reopening," Tickmill Group said. "A diplomatic process can reduce tail risk quickly, but it does not guarantee supply normalisation on the same timetable."
Meanwhile, the yen strengthened against the dollar after the U.S. and Japan confirmed a coordinated currency intervention .
U.S. Markets:
Stock futures were up as hopes of a U.S.-Iran peace deal rose.
U.S. jobs data will be in focus over the week ahead, with investors watching to see if American labor market strength holds.
Forex:
The dollar fell, staying near a seven-week low reached overnight after President Trump said he cancelled a planned strike on Iran while Japan and the U.S. confirmed joint intervention to shore up the yen.
Bonds:
Eurozone government bond yields fell, tracking moves in Treasury yields.
The 10-year Bund yields could rise further , according to Societe Generale which, therefore, maintain shorts on them.
Treasury yields slid in early trade as oil prices fell on improved outlook for a solution in the Middle East.
Energy:
In early trading, front-month Brent crude was down 5%, while WTI futures dropped 6.1%.
Metals:
Gold prices edged higher after President Trump refrained from launching fresh attacks on Iran, sending oil prices lower and easing concerns about inflation and further interest-rate hikes.
Iron ore
Iron ore futures were lower in early trade. ANZ Research sees little prospect of reversing the structural decline in Chinese steel demand. It estimates that only targeted policy support focused on infrastructure and selective industrial measures can help the market.
EMEA HEADLINES
Banco BPM Pulls Out of Merger Talks With Monte Paschi
Italian bank Banco BPM said it dropped out of talks to merge with peer Banca Monte dei Paschi di Siena, in a move that could clear the way for a rival $35 billion takeover offer from Intesa Sanpaolo.
BPM said Friday that conditions for reaching an agreement with Monte dei Paschi hadn't been met nearly two months after it sent its proposal, and that its board decided to discontinue discussions regarding a potential combination. The bank said it still saw strong potential strategic and industrial rationale for a tie-up, and that a deal would have generated significant value for both parties.
Atkore Agrees to Be Bought by Prysmian for $3.8 Billion, Including Debt
U.S.-listed Atkore said it agreed to be bought by Italy's Prysmian, in a deal that values the manufacturer of electrical infrastructure products at around $3.8 billion, including debt.
Under the deal, Atkore shareholders will receive $95 a share in cash. This is a roughly 30% premium to the stock's closing price of $72.96 on Friday.
AstraZeneca Shares Drop After Reports of Bristol Myers Squibb Merger Talks
AstraZeneca shares fell sharply after media reports that the U.K. drugmaker held talks to combine with U.S. rival Bristol Myers Squibb.
Shares in AstraZeneca dropped 7.7% at the opening bell. If maintained until close, this would be the stock's biggest one-day percentage fall since the day of the U.S. presidential election in 2024, according to FactSet data.
TotalEnergies Sells Stake in European Renewable Assets to KKR
France's TotalEnergies said it agreed to sell a 50% stake in European onshore solar and wind assets to private-equity firm KKR, in a deal that values the portfolio at 1.8 billion euros, equivalent to $2.08 billion, including debt.
TotalEnergies said the stake was in a largely developed 1.2 gigawatt portfolio operating across Germany, Spain, France and Poland.
GLOBAL NEWS
U.S., Japan Intervene to Boost Yen for First Time Since 1998
The U.S. and Japan late last week moved to arrest the slide of the yen, intervening to strengthen the currency for the first time since 1998.
U.S. Treasury Secretary Scott Bessent said in a social-media post that "Friday's coordinated foreign-exchange actions countered disorderly yen movements." Japanese Finance Minister Satsuki Katayama on Monday confirmed the joint intervention to support the Japanese currency, which touched a 40-year low against the dollar late last month.
China Private Manufacturing Gauge Shows Weaker Activity Growth
A private gauge showed China's manufacturing activity expanded at a slower pace in July, remaining in expansion territory and broadly echoing the official factory survey, which signaled a contraction.
The RatingDog general manufacturing purchasing managers index fell to 50.9 in last month, down from 51.7 in June, according to a statement released Monday.
Swiss Inflation Falls Again Despite Oil-Price Rebound
Swiss inflation fell in July despite a rebound in global energy prices following a flare-up of conflict in the Middle East, which has driven up inflation in other parts of Europe.
The annual rate of inflation was 0.4%, down from 0.5% in June, Swiss data agency FSO said Monday. This marks the lowest rate of inflation since March.
Trump Pivots Back to Diplomacy as Iran Victory Eludes Him
WASHINGTON-After days of threats to launch a new offensive against Iran, President Trump is once again trying to achieve through diplomacy what he has yet to accomplish through war.
The question is whether Trump's Gulf partners can make enough headway in the days ahead to reopen the Strait of Hormuz to shipping, at least temporarily, and lay the groundwork for eventual nuclear talks.
Jordan Is Learning Its U.S. Alliance Has a Price in the Iran War
For much of the past month, Iran fired missiles and drones day after day at Jordan. But for many Jordanians, the blame for putting their small country on the front lines falls on President Trump.
"Trump is the cause of this war," said Tahani Khalaf, 63 years old, as she walked with her sisters here in the Jordanian capital on a recent day, hours after another attack. "America forced Jordan to become part of this."
The Kremlin Is Bullying More Russians Into Fighting in Ukraine
Russia is strong-arming more fighting-age men into military service to boost the flagging ranks of its army as voluntary recruitment stalls and Moscow's initiative on the front line in Ukraine falters.
In Russia's smaller towns and cities, some military recruiters have resorted to detaining men on the street, outside their places of work or under the pretext of routine document checks, say lawyers, rights activists and eyewitnesses. Once in a military recruitment office, men may be threatened or beaten until they sign up for the war, they say.
A Cement Giant Paid Terrorists. Victims Want a Share of Its $778 Million Penalty.
Four years ago, the French cement company Lafarge agreed to a first of its kind guilty plea in which it acknowledged funding Islamic State and an al Qaeda affiliate to protect its Syrian plant and paid the U.S. $778 million in penalties.
Victims of attacks by those terrorist groups in Syria have said they are entitled to some of that money.
Write to priscila.barrera@wsj.com