BRUSSELS/FRANKFURT/PARIS (dpa-AFX) - European stocks are seen opening mixed on Thursday after posting strong gains in the previous session on optimism over a potential U.S.-Iran peace deal and easing concerns about inflationary pressures.
U.S. President Donald Trump said he has had 'very good talks' with Iran over the past 24 hours and it is 'very possible' that there will be a deal before his scheduled trip to China next week.
However, Trump threatened to resume bombardment if negotiations fail apart. Tehran said it was reviewing the latest peace proposal and exchanging diplomatic messages via mediator Pakistan.
Even if the Strait of Hormuz is opened today, analysts say that it will take several months to restart shut-in wells, repair the damage from attacks on energy infrastructure across the region, and restore flows.
Beyond the geopolitical headlines, investors also await the all-important U.S. non-farm payrolls report on Friday for more insights into the economic and rate outlook.
Asian stocks traded near record highs after U.S. President Trump temporarily suspended 'Project Freedom' in order to resume peace negotiations with Iran.
The U.S. dollar index weakened while Brent crude prices stabilized near $102 a barrel after plunging nearly 8 percent in the previous session. Gold held steady near a one-week high a tad below $4,700 an ounce.
U.S. stocks rose sharply overnight after reports emerged that the U.S. and Iran are getting close to an agreement on a one-page memorandum of understanding.
Axios reported that the deal would include Iran committing to a moratorium on nuclear enrichment and both sides lifting restrictions around transit through the Strait of Hormuz.
Adding to the optimism about a peace deal, President Trump said the U.S. would pause its efforts to escort ships through the Strait of Hormuz.
Investor sentiment was also boosted by AMD's upbeat forecast and strong private payrolls data pointing to more evidence of a stable labor market.
The tech-heavy Nasdaq Composite surged 2 percent and the S&P 500 added 1.5 percent to reach record closing highs while the narrower Dow gained 1.2 percent.
European stocks soared on Wednesday amid hopes that the U.S. and Iran are nearing a deal to end the Middle East conflict.
The pan-European STOXX 600 rallied 2.2 percent. The German DAX jumped 2.1 percent, France's CAC 40 soared 2.9 percent and the U.K.'s FTSE 100 surged 2.2 percent.
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