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

Rocky Swift

While markets appear to be looking past the Middle East

crisis and the havoc it has wreaked on energy supplies, central

bankers are signalling that the inflationary damage is already

done.

Share markets in Japan and South Korea surged to fresh

records, riding AI optimism that sent U.S. benchmarks to

all-time highs.

That euphoria is largely predicated on the United States and

Iran coming through on a peace deal to end their three-month

conflict and reopen the critical Strait of Hormuz shipping lane

for oil. Those hopes were dinged by U.S. strikes on Iran's

southern Hormozgan province that Tehran said violated a

ceasefire.

But even if the U.S. and Tehran soon strike a "Great Deal,"

as envisioned by President Donald Trump, with hundreds of ships

stranded in the Gulf, the hangover in oil markets and knock-on

effects in consumer prices will stay with us for a while.

At a gathering of central bank officials in Tokyo, Bank of

Japan Governor Kazuo Ueda cautioned that a temporary energy

shock can have persistent impacts. His comments followed those

by European Central Bank board member Isabel Schnabel that an

interest rate hike in June is warranted even if the U.S. and

Iran reach a peace deal.

In New Zealand, inflationary pressures nearly drove the

central bank to deliver a surprise hike today, warning instead

that it would have to lift rates by more than expected in coming

meetings.

With oil holding near $100 a barrel and temperatures

beginning their summer climb in the Northern Hemisphere, at

least we'll still have the tech boom to lean on.

Samsung Electronics ( SSNLF ) workers voted to approve a

deal to avert a strike that threatened global chip supplies. And

Nvidia's Jensen Huang said the AI giant and world's most

valuable company would ramp up annual investment in Taiwan to

$150 billion.

It's a relatively light day for economic data and earnings

in Europe and North America.

In early trade, the pan-region Euro Stoxx 50 futures

rose 0.16%, German DAX futures edged up 0.06%,

while FTSE futures eased 0.25%. U.S. stock futures, the

S&P 500 e-minis, were flat.

Key developments that could influence markets on Wednesday:

- Earnings: Bank of Montreal, National Bank of Canada,

DICK'S Sporting Goods, Abercrombie & Fitch, Bath & Body Works

- Europe data: Consumer confidence data for May in France

and Greece; Swiss investor sentiment for May

- Fed Bank of Dallas President Lorie Logan participates in

panel discussion in Tokyo

- Debt sales: France- Reopening of 3-month, 6-month and

1-year government debt auctions; Germany- Reopening of 15-year

government debt auction; United Kingdom- Reopening of 7-year

government debt auction