European equity markets were poised to open sharply lower on Monday as global risk appetite weakened following a major escalation in the Middle East conflict. US and Israeli forces launched strikes on Iran over the weekend, killing Iran’s Supreme Leader, Ayatollah Ali Khamenei, and effectively shutting the Strait of Hormuz. The disruption drove energy prices sharply higher, intensifying pressure on Europe just as the region seeks to secure substantial natural gas supplies amid record-low storage levels.
Against this backdrop, investors will scrutinize a series of key data releases, including German retail sales, GDP figures from Turkey and Italy, and manufacturing PMI readings across the euro area. Figures released on Friday showed German inflation undershooting expectations in February, while price growth accelerated in France and Spain. Money markets now price in only around a 30% chance of a European Central Bank rate cut by December. In premarket trading, Euro Stoxx 50 futures were down 1.5%, while Stoxx 600 futures fell 1.1%.
