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

Westbrook

Markets chose to look past weekend headlines and the risk of

a re-ignited and wider Mideast conflict, and traded - thinly -

on hope for a deal to get ships moving through the Strait of

Hormuz.

S&P 500 futures fell. But the 0.6% drop - as of

Asia's lunchtime - rested on tiny volumes and was a very modest

retreat from Friday's record highs. Most Asian markets advanced.

European futures fell 1.1%.

Oil futures came off opening highs to sit around

5-6% higher, but shy of the $100-a-barrel level.

The U.S. said it had seized an Iranian cargo ship that tried

to run its blockade and Iran vowed to retaliate. Iran also said

it would not participate in a second round of talks the U.S. had

hoped to begin before the ceasefire expires on Tuesday.

European allies worry an inexperienced U.S. negotiating team

is pushing for a headline-grabbing deal with Iran that could

lead to bigger problems down the road.

Canada's Prime Minister Mark Carney even said close ties to

the United States were once a strength but have become a

weakness, in a sign of how the war is reshaping diplomacy.

Broad markets, however, were watching the strait and, even

though Iran had said it was again closed, were buoyed by data

from Kpler showing more than 20 ships had transited on Saturday

- the busiest day since March 1.

Earnings, data and other market drivers were also creeping

back into the picture.

In London on Monday, British premier Keir Starmer will

address parliament facing calls for his resignation over his

handling of the appointment of Peter Mandelson as U.S.

ambassador, whose ties to sex offender Jeffrey Epstein led to

his sacking last September.

Key developments that could influence markets on Monday:

- U.S.-Iran relations

- Starmer parliamentary address

- Canada CPI

(Editing by Jacqueline Wong)