LONDON (Reuters) - U.S. President Donald Trump is due to announce at 2 p.m. (1800 GMT) whether he will pull out of an Iran nuclear deal he has previously described as the "worst deal ever negotiated" or work with European allies to toughen it.
Trump then has till Saturday to decide whether to extend existing waivers on sanctions related to Iran’s central bank and Iranian oil exports or withdraw and reintroduce them. European allies have sought in recent weeks to address Trump’s concerns over Iran’s ballistic missile programme, terms for monitoring Iranian sites, and “sunset” clauses under which some aspects of the deal expire: we will know in a few hours whether anything they have said was enough to stay Trump’s hand.
Armenia's parliament votes for a second time today to approve opposition leader Nikol Pashinyan as the new prime minister, with the signs that this time it will back him and thus complete what has so far been a remarkable, bloodless transition of power. Unlike past revolutions in the former Soviet orbit - Ukraine notably - Pashinyan has not styled his movement as pro-West and has instead channelled public anger over perceived political cronyism and official corruption.
Hungary's parliament holds its first sitting after the landslide re-election of Viktor Orban today, with the main task to swear in the lawmakers of the new legislature. His new chief of staff, Gergely Gulyas, has given a wide-ranging interview to Reuters, pledging new fiscal stimulus to keep economic growth above 4 percent, and ruling out a Polish-style conflict with European Union authorities over the rule of law.
Despite some trepidation over the expected U.S. government decision on its involvement in the Iran nuclear deal later, world markets are mostly in upbeat mood first thing Tuesday. After a spike above $76 per barrel for the first time since 2014 on Monday, Brent crude oil has eased back somewhat early Tuesday ahead of U.S. President Trump’s tweet on the issue around 1900 London time.
Brent was last trading about $75.60. With London markets returning to work after a holiday on Monday, trading volumes were expected to pick up later – with much focus on the resurgence of the U.S. dollar over recent weeks and especially against emerging market currencies.
Euro/dollar fell below $1.19 for the first time this year on Monday, but has recaptured that level early this morning. German industrial production rose an above-forecast 1 percent in April, offsetting yesterday’s disappointing orders reading for the same month. Germany’s March trade surplus, meantime, came in above forecast and may lift first quarter GDP estimates slightly.
Italian stocks and bonds remained firm as Italy’s President Mattarella is expected by Thursday to announce when the country goes back to the polls to resolve the impasse on forming a new government since the last election in March. Speculation in Rome is that he could announce a caretaker government until new elections in the Autumn.
Asia bourses were also in positive territory, with Chinese and Hong Kong stocks up smartly on reports of a resumption of U.S.-China trade talks and buoyant Chinese export and import readings for April that were well above expectations. Tech stocks helped Tokyo higher too, although Seoul and Jakarta were in the red.
U.S. and European stock futures were flat first thing, with a heavy European earnings slate dominating the morning. Ten-year U.S. Treasury yields were flat about 2.95 percent, with eyes on an appearance this morning from Federal Reserve chairman Powell at a conference in Zurich.
— A look at the day ahead from European Economics and Politics Editor Mark John and EMEA markets editor Mike Dolan. The views expressed are their own. —