Barclays: US-Iran Deal Could Spark Europe 50 Breakout From Range

On May 29 Barclays said progress toward a US-Iran deal could reopen the Strait of Hormuz, lower oil prices and ease rates, potentially allowing the Europe 50 to break out of its three-month trading range. The view builds on the bank’s May 27 note that markets have not fully priced a peace deal and that falling oil could trigger a short squeeze in duration-short portfolios, broadening leadership away from US stocks. While any rally in lagging European sectors may prove short-lived if oil stays higher for longer, the bank highlighted persistent outflows from European equities and upcoming US data risks that could test the durability of any détente-driven move.