June 15 (Reuters) - A look at the day ahead in European and

global markets from Wayne Cole.

Markets had suspected President Trump wanted to wrap up the war

for his birthday, and so it happened. U.S. and Iranian officials

said on Sunday they had agreed on a framework to end their war,

halt the U.S. blockade of Iran and reopen the Strait of Hormuz,

but left the thorny fate of Iran's nuclear program to further

negotiations.

The strait is supposed to open fully on Friday when the

initial deal is due to be signed. Yet its status was not

entirely clear with Trump saying the strait would be toll-free,

while Tehran said it would control the vital waterway along with

Oman.

Any toll would undermine the freedom of the seas principle of

international law, which is essential to global supply chains

and the basis for the entire trading system. If Iran can control

the strait, who's to say the Strait of Malacca, the Bab

el-Mandeb, the Taiwan Strait, the English Channel or even the

Strait of Gibraltar might not also be tolled at some point.

It is also not clear whether shipowners will risk their vessels

in the strait without protection, or how much insurance might

cost. Whether or when transits return to the daily average of

138 seen before the war is an open question. As is the state of

oil and liquefied natural gas facilities that have been damaged.

For now, the progress was enough to spark a broad risk-on

rally with U.S. and European share futures all up 1% or more.

Japanese and South Korean shares jumped more than 5% as a 5%

drop in Brent offered relief to the net energy importers.

If sustained, the drop in oil would reduce the risk of inflation

and thus the need to hike interest rates. Ten-year Treasury

yields fell 6 basis points to a one-month low and Fed fund

futures rallied, with 8 basis points of tightening removed for

next year.

Cheaper oil might also strengthen the position of the doves on

the Fed board, presumably including its Chair Kevin Warsh, who

want to keep the easing bias in place. Dropping the bias and

shifting to neutral is still a real risk at their meeting this

week, going by comments from many of the FOMC members.

Central banks are also due to meet in the UK, Japan, Australia,

Switzerland, Sweden, Norway and Russia this week, with Japan

considered the one likely to lift rates this time.

The Russian meeting on Friday will be closely watched as

Governor Elvira Nabiullina has not been seen in public for a

couple of weeks, sparking speculation on her future. Analysts

credit Nabiullina with keeping the Russian economy afloat

through the Ukraine war and her absence would test market faith

in the system.

Key developments that could influence markets on Monday:

- G7 summit starts in Evian-les-Bains, France

- Pre-recorded keynote speech by ECB President Christine

Lagarde. Appearance by ECB board member Piero Cipollone

- EU trade, industrial output for April

- US industrial output for May, Empire Manufacturing survey

for June

(Editing by Kate Mayberry)