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FINWIRES

German DAX Extends Gains Amid Growing Hopes to End of Iran War

-- Germany's blue-chip DAX index ended Thursday's session 0.36% higher, buoyed by increasing optimism over a potential end to the war in Iran.

Reuters reported, citing an unnamed source, that a key Pakistani mediator achieved a breakthrough on "sticky issues" between the US and Iran, while noting Iranian officials cautioned that the future of the nation's nuclear program remains unresolved. Pakistan's army chief, Field Marshal Asim Munir, is in Tehran seeking to extend the Iran ceasefire after weekend talks in Islamabad failed to yield a deal. And while both sides remain open to further negotiations, a timeline has not yet been established, the news outlet added.

On the economic front, inflation in the eurozone accelerated in March. According to final data from Eurostat, the euro area's annual inflation rate rose to 2.6% from 1.9% in February, above the flash estimate of 2.5%. Meanwhile, the core rate, which excludes energy, food, alcohol and tobacco, came in at 2.3%, consistent with the preliminary reading and down from the previous 2.4%.

For the month, services were cited as the highest contributor, followed by energy, food, alcohol and tobacco, and then non-energy industrial goods.

Against this backdrop, BofA Global Research noted that euro area inflation and economic growth are more sensitive to oil price movements than the US. "Using a VAR approach, we show that the Euro area economy has a much larger sensitivity to oil prices than the US for both inflation and growth. We find the inflationary impact of a 10% oil shock to reach about 40 [basis points], with the corresponding growth impact of over 10bp. Both effects are about twice as large as for the US. We think the larger share of energy in Europe's consumption basket, as well as the region being an oil importer, explain the results. Our findings suggest that Europe will take a larger hit from the energy shock compared to the US," the research firm wrote.

In corporate news, Bayer (BAYN.F) was down 0.12%, as Deutsche Bank Research lifted the hold-rated stock's price target to 43 euros from 23 euros ahead of the German life science company's first-quarter results due on May 12.

"We forecast Q1 [organic sales growth] to increase by 3.6% YoY, driven by Crop Science, boosted by a EUR450m licensing income, offsetting a flattish performance in Pharma and modest growth in Consumer Health. ... Bayer's direct exposure to the ME is very limited, and its end markets are relatively resilient. While we anticipate growing energy & input cost headwinds for crop protection, this is relatively small as a % of group and energy is well hedged," Deutsche Bank said.

Meanwhile, the German cartel office authorized defense company Rheinmetall's (RHM.F) subsidiary, Rheinmetall Digital, and space technology group OHB (OHB.F) to form a joint venture focused on pursuing a future procurement contract for the German armed forces. Rheinmetall fell 1.20%, while OHB gained 3.97%.

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Research Alert: Ewbc: Q1 Earnings Beat As Revenue Growth Outperforms

CFRA, an independent research provider, has providedwith the following research alert. Analysts at CFRA have summarized their opinion as follows:EWBC posted strong Q1 2026 results with operating EPS of $2.57 vs. $2.08 a year ago, $0.10 above consensus. Q1 revenue of $774M beat consensus by 3% and rose 12% Y/Y and 2% Q/Q. It was another record quarter as the bank reported record levels of loans, deposits, and fee income, while maintaining healthy credit quality. Net interest income outperformed with 2% Q/Q growth while the net interest margin improved 8 bps to 3.49%, driven by a 21-bp decline in deposit costs to 2.84% that more than offset a 9-bp decrease in loan yields. Balance sheet growth remained robust with total loans reaching a record $58B (+2% Q/Q, +7% Y/Y) and deposits hitting $69B (+3% Q/Q, +9% Y/Y). Loan growth was well diversified across commercial and industrial, commercial real estate, and residential mortgage portfolios. Fee income surged 13% Q/Q to record levels, with wealth management fees more than doubling. The bank's funding optimization efforts continued to bear fruit in the competitive environment.

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Oil & Energy

Hormuz Disruptions Deepen as Oil Prices Rebound and Recovery Timelines Slip, Wood Mackenzie Says

Strait of Hormuz flows remain sharply constrained, with vessel traffic far below normal 170 daily levels and energy markets reacting to ongoing disruption, Wood Mackenzie said Tuesday.Wood Mackenzie said the waterway remains effectively restricted despite ceasefire signals, with uncertainty over safe passage continuing to deter shipping activity.Although the US and Iran are moving toward renewed talks, both sides remain far apart on terms, raising the risk of prolonged disruption to Gulf energy exports.A two-week ceasefire announced on April 7 and a subsequent 10-day pause in Lebanon had briefly lifted optimism around easing tensions, Wood Mackenzie added.However, two Indian vessels were forced to turn back over the weekend after coming under fire while attempting to transit the strait, underscoring ongoing risks.Iran's Islamic Revolutionary Guard Corps warned ships against moving in the Persian Gulf and the Sea of Oman, saying, "approaching the Strait of Hormuz will be considered co-operation with the enemy."Traffic had risen modestly after the ceasefire, with about 20 vessels transiting daily, but this remains far below the roughly 170 ships seen in February, according to Wood Mackenzie.That limited recovery has reversed, with minimal vessel movement recorded on Sunday, signaling continued disruption across oil, gas, and chemicals markets.Oil prices initially fell after the ceasefire, with Brent dropping about 14% from around $110 to below $95 per barrel, and later reaching just above $86, according to the report.Prices rebounded, with Brent June futures rising about 5% to around $95 per barrel, while European gas prices climbed to 61.5 euros ($72.21) per megawatt hour before easing to 40 euros.The United States has tightened its blockade, seizing a cargo vessel and increasing pressure on Iran-linked shipping, while both sides exchanged sharper rhetoric over the weekend, Wood Mackenzie said.Tasnim, a media outlet affiliated with Iran's Islamic Revolutionary Guard Corps, identified several locations that could "enter the conflict zone" if hostilities resume, including the Bab al Mandeb Strait.It also named Saudi Aramco assets and key oil terminals in Yanbu and Fujairah, which serve as alternative routes bypassing the Strait of Hormuz, Wood Mackenzie added.Wood Mackenzie said a peace deal could allow some tankers to resume movement quickly, but full restoration of normal traffic through the Strait of Hormuz may take until the end of June, citing Alan Gelder, senior vice president.Liquefied natural gas exports could see an initial surge after a peace deal, but a full return to normal operations would take longer, Wood Mackenzie said.Massimo Di Odoardo at Wood Mackenzie said restarting Qatar's LNG output could take three to four weeks for the South complex, while recovery of northern facilities would require a longer timeframe.Rising tensions between the United States and Iran have cast doubt on recovery timelines, with prolonged disruption in the Strait of Hormuz threatening deeper imbalances in global energy markets, Wood Mackenzie said.Brent crude has averaged about $85 per barrel in 2026, warning that prices near $90 could push global growth below 2% and into recession territory, said Peter Martin at Wood Mackenzie.

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Research Alert: CFRA Maintains Buy Rating On Shares Of Quest Diagnostics

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