European equity markets were set to open sharply lower on Monday as global risk appetite deteriorated following a major escalation in the Middle East conflict. The US and Israel carried out strikes on Iran over the weekend, resulting in the death of Iran’s Supreme Leader, Ayatollah Ali Khamenei, and the effective closure of the Strait of Hormuz. Energy prices surged, adding pressure on Europe as the region moves to secure significant natural gas supplies amid record-low storage levels. Meanwhile, investors will assess retail sales data from Germany, GDP figures from Turkey and Italy, as well as manufacturing PMI reports across the bloc. Data on Friday showed German inflation came in below forecasts in February, while price growth accelerated in France and Spain. Money markets currently assign only about a 30% probability to a rate cut by the European Central Bank by December. In premarket trade, Euro Stoxx 50 and Stoxx 600 futures were down 1.5% and 1.1%, respectively.
