A look at the day ahead in European and global markets from Tom Westbrook

"We're in negotiations right now," U.S. President Donald Trump told reporters at the White House, boasting that the Iranians had made a concession "worth a tremendous amount of money", about which he gave no further details.

"It was a very nice thing they did," he said.

The assertion is unconfirmed by Iran and in fact Iran's official news agency quoted an armed forces spokesperson saying the U.S. is "negotiating with itself". But the tone has sent oil lower and stocks higher in the Asia session, though not by massive margins.

Israel, meanwhile, struck Tehran on Wednesday, which semi-official Iranian reports said hit a residential area, and Iran has denied it is in direct talks to end or pause hostilities.

The New York Times reported on Tuesday that Washington sent Iran a 15-point plan to end the war. Israel's Channel 12, quoting three sources, said the U.S. was seeking a month-long ceasefire to discuss the 15-point plan.

A source familiar with the matter confirmed that the U.S. had sent a plan to Iran but provided no further details.

Markets are hesitating to run too far for a few reasons, one being the risk negotiations are either not substantive or go nowhere and the other that economic damage deepens by the day.

Euro zone private sector growth has nearly stalled this month as inflation expectations surged and delivery times soared, adding to evidence that the bloc is already suffering a tangible drag from the U.S. and Israeli war on Iran.

Asian currencies have been under pressure in anticipation of hits to the region's energy-importing economies being lasting as Mideast oil and gas infrastructure has sustained damage.

South Korea's National Pension Service will work to raise its strategic hedging ratio over the long term to help stabilise the fragile won, Reuters reported on Wednesday, citing sources aware of the fund's discussions with the government and the central bank.

Gold made some recovery with the mood but remains on course for its largest monthly fall since 2008 and an example of how few places investors have had to hide since the war began.

A traditional safe haven, it has been knocked by profit-taking from a rocketing two-year rally.

The one thing powering along is cash. U.S. money market funds have grown by around $60 billion since February 28 to a new record of $7.86 trillion.

Key developments that could influence markets on Wednesday:

News: Mideast headlines

Economics: British CPI, German IFO, European consumer confidence

Earnings: Carnival Corp

(Editing by Muralikumar Anantharaman)