FRANKFURT (dpa-AFX) : The preliminary agreement to find a resolution to the conflict with Iran is expected to support the German stock market, at least at the start of the new trading week. Following weeks of negotiations, the United States and Iran have reached a tentative accord, according to the mediator Pakistan and the U.S. government. Iranian Deputy Foreign Minister Kazem Gharibabadi also stated, according to the Tasnim news agency, that the text of the framework agreement has been finalized.

Following the formal signing on Friday, the Strait of Hormuz, a critical artery for global oil and gas trade, is set to reopen. The de facto blockade by Iran had significantly driven up oil prices. Consequently, inflation rose, forcing the European Central Bank (ECB) to implement a interest rate hike last Thursday. This represents an additional burden for the Eurozone economy, which is already navigating difficult waters.

Analyst Frank Sohlleder of the trading house Activtrades had already suggested on Friday that a full reopening of the Strait of Hormuz could lead to a further and massive decline in oil prices. This would immediately tackle stubborn inflation at its root and, in an instant, put the ECB's recent key interest rate hike into a different perspective.

In the coming week, members of the U.S. Federal Reserve must assess the impact of the geopolitical situation and economic developments on inflation and the labor market. The meeting will be chaired by the new Chairman, Kevin Warsh.

Analyst Patrick Franke of Landesbank Hessen-Thüringen (Helaba) does not expect the Fed to decide on a rate hike. Kevin Warsh has repeatedly spoken out against making prior commitments. As such, he is unlikely to push for a clear signal regarding future meetings.

On balance, the environment for the German stock market remains favorable for the time being. DZ Bank recently raised its year-end target for the Dax benchmark index from 25,000 to 27,500 points. This would easily surpass the record high of nearly 25,508 points reached in mid-January.

DZ Bank's primary scenario is based on the assumption of a de-escalation in the Persian Gulf, as a relaxation of tensions is in the interest of both parties. On the Iranian side, the blockade caused foreign exchange earnings to collapse, as oil exports constitute the majority of its trade. On the U.S. side, according to analyst Birgit Henseler, energy prices and rising living costs are weighing on the U.S. President's approval ratings. In this environment, stock markets are generally being driven by the expansion of infrastructure surrounding Artificial Intelligence, she added. Currently, the record-breaking IPO of Elon Musk's space company SpaceX is also fueling market sentiment.

Regarding the domestic equity market, significant price movements could occur on Friday, as it marks another major expiration day. On this day, futures contracts on stocks and indices expire on the derivatives exchanges, which can trigger volatility.

Also on Friday, the DIY and building materials group Hornbach Holding will publish its quarterly results. By mid-week, Commerzbank shares will be worth watching. At midnight on Tuesday, the offer from the major Italian bank Unicredit for its German competitor is set to expire.

Unicredit launched a takeover bid for Commerzbank in early May, offering its own shares in exchange. According to its own data, the Italians had been tendered 11.22 percent of all Commerzbank shares by Thursday, even though the calculated value of the offer sits below the current price of a Commerzbank share.

This would mathematically increase Unicredit's stake to a good 37 percent: furthermore, it has secured more than 3 percent of Commerzbank shares via call options and holds additional financial instruments. Commerzbank recently involved the financial regulator Bafin, alleging "foul play" regarding Unicredit's disclosures.

The Frankfurt-based bank criticizes that the tendered shares originated predominantly from banks and their affiliated parties, some of whom are known counterparties of Unicredit for financial instruments, rather than independent investors. Unicredit has rejected the accusation, stating it acts in accordance with legal requirements and maintains a transparent dialogue with the German financial regulator Bafin./la/jsl/he

--- By Lutz Alexander, dpa-AFX ---