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

Stella Qiu

U.S. President Donald Trump surprised markets by announcing

late on Monday that Israel and Iran had agreed to a complete

ceasefire, potentially ending a 12-day conflict. In his own

words, the ceasefire would last "forever".

Investors are surely hoping it is real and will hold. It was

only days ago that the U.S. launched strikes on Iran that risked

drawing it into another costly foreign war.

Oil prices duly slumped almost 3% on Tuesday, on top of an

almost 9% tumble overnight as the immediate threat to the vital

Strait of Hormuz shipping lane appeared to have lessened.

U.S. crude futures are back at $66.80 per barrel,

about the lowest since June 11 before Israel's attacks on Iran

began. That is a relief for global inflation, which will make

central bank efforts to tame inflation a little easier.

But the situation is still very fluid.

Missiles were still being launched from Iran towards Israel.

Israeli media said a building had been struck and three people

were killed in the missile strike on Beersheba.

An Iranian official earlier confirmed that Tehran had

agreed to a ceasefire, but the country's foreign minister said

there would be no cessation of hostilities unless Israel stopped

its attacks.

Risk assets rallied nonetheless - S&P 500 futures

rose 0.5% and Nasdaq futures were 0.7% higher. European

stock markets are bracing for a strong rebound, with EUROSTOXX

50 futures up 1.2%.

The MSCI's broadest index of Asia-Pacific shares outside

Japan gained 2.1% while Japan's Nikkei

rallied 1.1%. South Korean shares hit their highest

since September 2021.

The beleaguered dollar, which had found some safe-haven bids

from the Middle East conflict, was on the back foot again and

fell 0.5% to 145.45 yen, having come off a six-week

top of 148 yen overnight.

With the Israel-Iran conflict potentially easing,

investor focus shifts to Federal Reserve Chair Jerome Powell's

upcoming appearance before Congress. The Fed has not made a move

on interest rates this year due to the inflationary impact of

Trump's tariffs.

But some Fed officials are breaking ranks with Powell, whose

hawkish view on rates has drawn Trump's ire. Fed's Michelle

Bowman said overnight that she was open to cutting rates in

July, while Governor Christopher Waller said he would also

consider a rate cut next month.

More Fed officials will be speaking tonight, with New York

Fed President John Williams giving keynote remarks in New York

and Cleveland Fed President Beth Hammack due to speak on

monetary policy in London.

In Europe, central bankers are busy too. Bank of England

Governor Andrew Bailey will make public appearances in London

and a few ECB officials will be giving speeches.

Key developments that could influence markets on Tuesday:

-- Fed Chair Jerome Powell appears before Congress,

along with public appearances by other Fed officials including

New York Fed President John Williams, Cleveland Fed President

Beth Hammack and Boston Fed President Susan Collins.

-- NATO annual summit begins in the Hague

-- Bank of England Governor Andrew Bailey and chief

economist Huw Pill appear at a conference on Britain's return to

the gold standard in 1925.

-- Germany IFO business survey

-- U.S. Conference Board consumer confidence

-- Canadian CPI for May

(Editing by Jacqueline Wong)