European markets opened Friday with cautious optimism, digesting Thursday's powerful US equity rally driven by the surprise US–Iran ceasefire and sanctions-easing agreement. The truce, which includes commitments from Pakistan and aims to stabilize shipping through the Strait of Hormuz, has sharply reduced geopolitical risk premium across asset classes. Brent crude fell nearly 2% as supply disruption fears evaporated, while safe-haven flows reversed—gold dropped 0.65% and the Japanese yen remained weak despite improved global sentiment. European indices posted modest gains, with the DAX up 0.35% and the FTSE 100 rising 0.20%, though defense stocks tumbled on the peace news, partially offsetting tech-linked strength.

The other major theme is the divergence between equity exuberance and caution in IT services. Accenture's disappointing earnings guidance on Thursday triggered a sharp sell-off in global IT stocks, with India's Nifty IT index leading declines. This has tempered enthusiasm in European tech and consulting names, even as semiconductor stocks (buoyed by AI optimism and overnight US strength) continue to hit record highs. The juxtaposition of soaring chip valuations and weak enterprise IT spending signals a nuanced growth outlook—strong on innovation, fragile on corporate budgets.

Today's European data calendar is light but meaningful. UK Retail Sales (13:00 CY) are forecast to rebound +0.5% m/m after last month's -1.3% drop, a key test of consumer resilience following the Bank of England's decision to hold rates at 3.75% on Thursday. BoE officials cited lower oil prices and easing inflation pressures as tailwinds, so a strong retail sales print could reinforce confidence in the UK growth trajectory. German PPI is also due at 13:00 CY, expected to moderate to +0.7% m/m from +1.2%, signaling cooling producer-price pressures in Europe's largest economy. Both releases will shape near-term ECB and BoE policy expectations.

US markets are closed for the Juneteenth holiday, leaving thin liquidity and muted pre-market action. Thursday's session saw the S&P 500 rally 1.02%, the Nasdaq surge 1.85%, and the Dow gain 0.68%, with semiconductors and mega-cap tech leading the charge. The rally was broad but concentrated in growth and cyclical sectors, reflecting confidence that the Iran truce removes a key tail risk to global supply chains and inflation. However, the lack of US trading today means the momentum test is deferred to Monday, when macro data, Fed speak, and corporate earnings will resume driving direction.

Currency markets are consolidating in narrow ranges. EUR/USD is up 0.15% near 1.1470, supported by reduced dollar safe-haven demand and expectations for stable European data. GBP/USD is holding just above 1.3220 ahead of UK Retail Sales, while USD/JPY remains elevated near 161.10 as the yen fails to benefit from risk-on flows due to the BoJ's ultra-loose stance. AUD/USD is the standout performer, up 0.25%, benefiting from commodity stabilization and China-linked optimism despite the absence of new Chinese stimulus. Crypto markets are diverging from equities—Bitcoin fell 2.83% and Ethereum dropped 2.96%, reflecting profit-taking, regulatory uncertainty, and a disconnect from traditional risk-on narratives.

The key US session risk today is the absence of a US session—markets are closed for Juneteenth, leaving global traders to digest Thursday's rally and position for Monday's return of full liquidity. With no US data, Fed speakers, or earnings reports, attention shifts to whether the post-truce euphoria holds or fades into profit-taking over the long weekend. Any geopolitical headlines—particularly signs of implementation delays or renewed Iran-related tensions—could quickly reverse the risk-on tone, especially in energy markets where Brent and WTI have shed significant ground.

European data at 13:00 CY carries medium-to-high importance. UK Retail Sales are forecast to rebound +0.5% m/m, and any upside surprise could lift sterling and domestic-focused FTSE names, reinforcing BoE confidence in holding rates steady. A miss, however, would reignite concerns about UK consumer health and could pressure GBP/USD below 1.3150 support. German PPI is expected to moderate, and a softer-than-forecast print would support the ECB's cautious easing narrative, potentially lifting EUR/USD toward 1.1500 resistance. Conversely, a hot PPI number could complicate ECB dovish expectations and cap euro gains.

Looking ahead to Monday's US return, several crosscurrents will shape market direction. First, whether the semiconductor-led rally has legs or faces profit-taking after Nvidia and peers hit record highs. Second, the durability of the Iran truce—any weekend rhetoric or delays in sanctions implementation could reignite oil volatility and safe-haven flows. Third, the crypto sell-off—if Bitcoin breaks $62,000 support and Ethereum falls through $1,650, it could signal broader risk-asset fragility despite equity strength. Finally, watch for any surprise Fed speak or economic data revisions that could shift rate expectations; markets are currently pricing in a cautious Fed, but any hawkish pivot would pressure equities and lift the dollar sharply.