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

Markets were enjoying a slight bounce on Tuesday, following a report from the Wall Street Journal that Trump told aides he is willing to end the military campaign against Iran even if the Strait of Hormuz remains largely closed.

Apparently, he said he would leave a complex operation to reopen it for a later date.

That was enough to send U.S. futures up nearly 1% in Asia, while EUROSTOXX 50 futures gained 0.8%, reversing their declines from earlier in the session.

Oil futures also pared gains to turn negative.

Whether that's true remains unclear, but any de-escalation in the month-old war would definitely be welcomed by investors, who are staring at hefty losses on their portfolios this month as everything from stocks to bonds and precious metals has tumbled.

But the longer the Strait stays closed, the higher energy prices remain.

The critical waterway has effectively been shut since the war began on February 28, though two Chinese container ships sailed through it on Monday on their second attempt to leave the Gulf after turning back on Friday, ship-tracking data showed.

The energy crisis that has gripped the world has left Brent crude futures on track for a record monthly gain in March, with a rise of more than 50%.

In Europe, focus will be on flash euro zone inflation data due later in the day, which could give an early indication of the impact the conflict has had on consumer prices in the bloc.

The region's heavy reliance on energy imports has left it exposed to spiralling prices, with gas prices jumping more than 70% over the past few weeks.

European Union energy ministers will also hold talks on Tuesday to coordinate their response to the disruption to oil ​and gas markets triggered by the war, an internal EU briefing document showed.

Elsewhere in markets, the dollar was headed for its sharpest monthly gain since July, having emerged as one of the few safe havens as the war rages on.

That has in turn kept the yen struggling around the 160 per dollar level, with Japanese officials stepping up their jawboning to defend the currency.

Data on Tuesday showed annual core inflation in Tokyo slowed to a nearly two-year low in March and stayed below the central bank's target for a second straight month, as the effect of fuel subsidies offset rising raw material costs from a weak yen.

Key developments that could influence markets on Tuesday:

- Euro zone flash inflation data (March)

- UK GDP (Q4)

- UK house prices (March)

- U.S. JOLTS data (February)

(Editing by Sam Holmes)