European Equity Derivatives Strategy: Europe set to catch-up after the MOU: European + US worst of calls

Research evidence excerpt

European Equity Derivatives Strategy: Europe set to catch-up after the MOU: European + US worst of calls

J P M O R G A N Global Markets Strategy

17 June 2026

European Equity Derivatives

Strategy

Europe set to catch-up after the MOU: European + US

worst of calls

Following the weekend announcement of the US-Iran MoU, prediction markets Global Quantitative and Derivatives

imply a near-certain peace deal by year-end, but implementation risk remains and Strategy

transit normalization through the Strait is set to be gradual after an initial backlog Davide Silvestrini AC

release. The prospect of a resolution appears much more credible this time, and Iran (44-20) 7134-4082

appears willing to reach an agreement. davide.silvestrini@jpmorgan.com

J.P. Morgan Securities plc

Esmail Afsah ACEuropean equities have reacted positively, but they have retraced only a small part

(44-20) 7742-9231

of their prior underperformance versus the global equities, and the positioning esmail.afsah@jpmorgan.com

remains weak, with limited signs of a material improvement so far. The reopening J.P. Morgan Securities plc

of the Strait would remove a key headwind for the European equities, while the US Yangyang Hou

equities should remain supported by the structural AI theme. (1-212) 834-6734

yangyang.hou@jpmorgan.com

We like worst-of calls across the European and US indices to position for further J.P. Morgan Securities LLC

upside. The current pricing is supported by the lower implied correlation between Tony SK Lee

SPX and European indices relative to pre-war levels and from the post- (852) 2800-8857

announcement reset in the implied volatility. Specifically we recommend, tony.sk.lee@jpmorgan.com

J.P. Morgan Securities (Asia Pacific) Limited/ J.P.

Morgan Broking (Hong Kong) Limited