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

Gregor Stuart Hunter

The U.S.-Iran ceasefire agreed this week looks increasingly

strained as Israeli attacks on Lebanon brought retaliation from

Hezbollah, while the lack of ships resuming passage through the

Strait of Hormuz prompted a fresh tirade from the U.S. leader.

Investors were nervous as Iran said Israel's Lebanon attacks

violate its agreement with the United States, stalling risk-on

sentiment that had followed the deal. S&P 500 e-mini futures

were flat on Friday while MSCI's broadest index of

Asia-Pacific shares ex-Japan was up 0.8%.

Israeli Prime Minister Benjamin Netanyahu on Thursday said

he was seeking talks with Beirut, a day after the worst Israeli

bombardment of the war killed more than 300 people in Lebanon.

On Friday, Hezbollah responded by launching a missile at Israel,

triggering air raid sirens including in Tel Aviv.

Meanwhile, U.S. President Donald Trump berated Iran on Truth

Social for doing a "very poor job" of allowing ships through the

strait. "That is not the agreement we have!" he wrote.

Before the war, one-fifth of global oil and gas shipments

passed through Strait of Hormuz. On Thursday, traffic was well

below 10% of normal volume as ships navigated both mines and

bureaucracy, with each vessel requiring Iranian approval.

The strait's effective closure during the U.S. and Israel's

six-week war with Iran has sent shockwaves through global

markets as oil prices surged and energy supplies tightened.

In a sign the conflict is feeding cost pressure beyond the

region, factory-gate prices in China rose for the first time in

three and a half years in March, official data showed.

Brent crude rose 0.7% to $96.57 a barrel on supply

fear, with Japanese Prime Minister Sanae Takaichi on Friday

saying Japan plans to release 20 days' worth of oil reserves

from May to ensure stable domestic supply.

Also in Japan, the Nikkei 225 rose 1.6% as shares in

Fast Retailing ( FRCOF ) set a record after the Uniqlo owner on

Thursday reported a profit jump that beat market estimates.

In early European trade, pan-region futures were up

0.6%, German DAX futures were up 0.6% and FTSE futures

were up 0.2%.

Key developments that could influence markets on Friday:

* Germany CPI, HICP for March

* Germany current account balance for February

* U.K. auction of 1-month, 3-month, 6-month government debt