MORNING BID EUROPE-Fingers crossed for a resolution

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

The U.S. military's blockade of Iran's ports has begun, creating more bad news for global oil supply, but never mind that because markets on Tuesday were riding on hopes of a resolution between Washington and Tehran. Despite the collapse of peace talks between Iranian and U.S. officials over the weekend, sources told Reuters that dialogue was still alive and a U.S. official said there was forward motion on trying to get to an agreement. U.S. President Donald Trump also said on Monday that Iran wanted to make a deal, though he would not come to any agreement that allowed Tehran to have a nuclear weapon. That was enough to spark a rebound in global stocks, with shares in Asia rising alongside U.S. and European futures, while oil prices slipped back below $100 a barrel.

But the global economy is hardly out of the woods. The inflationary pulse from higher-for-longer energy prices will remain as long as the Strait of Hormuz stays shut, keeping pressure on businesses and everyday consumers. In Singapore, the central bank on Tuesday tightened its monetary policy settings, flagging inflation risks from the Middle East war. Meanwhile, China's export engine slowed in March, sharply undershooting forecasts, as buyers chasing an AI-fuelled future ran into the hard reality of the war.

The U.S. earnings season is also underway and will serve as a litmus test of how well, or poorly, companies are dealing with the fallout of the war. Results from JPMorgan Chase, Wells Fargo and Citigroup are due later in the day, after Goldman Sachs on Monday reported quarterly profit that beat expectations, driven by strength in dealmaking and equities trading.

Key developments that could influence markets on Tuesday:

- JPMorgan Chase, Wells Fargo, Citigroup, Johnson & Johnson earnings

- U.S. March PPI

- Fed's Barr, Collins, Barkin, Paulson, Goolsbee speak

(Editing by Kate Mayberry)