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

Ankur Banerjee

In a 19 minute prime-time address, U.S. President Donald Trump

squashed burgeoning hope among investors of an end to the war in

the Middle East, saying Washington will hit Iran "extremely

hard" over the next two to three weeks.

With no timeline for an end to the U.S.-Israeli war with

Iran and with the Strait of Hormuz staying closed, investors

were quick to return to what they did in March: Selling stocks,

buying U.S. dollars and sending oil prices higher.

Trump repeated calls for countries that rely on Gulf oil to

"take the lead" and assume the burden of reopening the waterway

on which Iran has a chokehold that has created what some market

watchers have called the worst global energy shock in history.

The prospect of an end to the month-long war had lifted

global stocks and knocked the dollar off recent highs over the

past two trading sessions after a brutal March where soaring oil

prices sent risk assets into a tailspin.

But those moves were being reversed on Thursday after the

speech as traders who had added risk this week were swiftly

exiting those positions, bracing for a prolonged energy shock to

spur worry over stagflation - rapid inflation with slow growth.

So Brent crude futures are once again well above $100 a

barrel, while U.S. stock futures and European futures

point to an ugly open with both down more than 1%.

Over in Asia, which has borne the brunt of the oil shock as

most of the economies in the region heavily rely on energy from

the Middle East, it was a sea of red with almost all bourses

sliding sharply. U.S. Treasuries were also down.

With most major Western markets closed tomorrow for the Good

Friday holiday, investors could de-risk extensively, hoping to

not get caught out by any weekend escalation.

Key developments that could influence markets on Thursday:

* U.S. jobless data

* EIA weekly estimate of U.S. natural gas in underground

storage