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

Westbrook

A weekend wait looms over markets as sources have told

Reuters that the U.S. and Iran have reached an agreement to

extend their ceasefire and reopen the Strait of Hormuz, with the

crucial final step now resting with U.S. President Donald

Trump's approval.

For now, market moves have been modest in Asia. The dollar

was steady and bonds held on to gains made earlier in the week,

as investors hope higher fuel price pressure will leave Trump

little room to walk away.

Rising global interest rates are also adding urgency for a

Middle East peace deal, as markets worry that higher borrowing

costs could compound economic strain and weigh on risk assets.

Inflation figures are due across Europe on Friday and

although rises are expected to be fairly small, it will probably

reinforce market expectations for a rate hike in June.

Tokyo inflation held below Japan's 2% target for a fourth

straight month, figures released on Friday showed, yet a rebound

in factory output is keeping the case for a rate hike in Japan

next month very much alive.

The yen was trading just on the strong side of 160 per

dollar, a level that has traders wary and unwilling for now to

test the resolve of authorities to defend the currency.

Meanwhile, AI euphoria carried stocks higher.

Dell raised its AI server revenue forecast and the

stock price soared 39% in after-hours trade. Over in Hong Kong,

computer-maker Lenovo ( LNVGF ) has been on a tear, jumping 18%

for a weekly gain of nearly 50%, the largest weekly rise since

1997.

Key developments that could influence markets on Friday:

- Inflation data in Germany, France, Italy

- Canadian GDP

- US-Iran deal progress