Stocks and Treasuries rallied while oil dropped to a three-month low after the US and Iran reached a deal to reopen the Strait of Hormuz, easing concerns over energy-supply disruptions that have roiled global markets. A gauge of Asian shares jumped more than 3% amid broad gains across the region, with Japan’s Nikkei 225 headed for a record close. S&P 500 futures were up 1.2%. The dollar declined against major peers while Bitcoin climbed to its highest level in nearly two weeks. Brent crude slumped more than 4% to head toward $83 a barrel. The peace agreement paves the way to end a conflict that has claimed thousands of lives, disrupted the global economy and driven volatility across financial markets since the end of February. A resumption in Middle Eastern oil flows may help unwind the geopolitical premium embedded in crude prices, offering relief to policymakers battling inflation. The Strait of Hormuz will be “opening” on Friday upon the signing of the deal with Iran, President Trump said in a post on Truth Social. The announcement came first from Pakistani Prime Minister Shehbaz Sharif, and was followed by Trump and Iranian state media. Neither side released the text of the deal but the broad contours had circulated for days. Even as he celebrated the deal, Trump told the New York Times in an interview Sunday that if an agreement isn’t reached with Iran on a nuclear deal, he could restart military attacks on Tehran. Still, investors embraced risk assets on Monday, betting that a reopening of the waterway — a vital conduit for global oil and gas — will likely help ease inflation pressures and reinforce bets for lower interest rates. Markets in emerging Asia, among the hardest hit by the conflict due to their heavy dependence on oil imports, led gains. In the Philippines, the stock benchmark surged 6%, the most in six years, while Indonesia’s key index was up about 4%. Their currencies were the region’s top performers against the dollar. Meanwhile, yields on 10-year Treasuries slid six basis points to 4.42%. They may decline toward the 4.20% level as inflation concerns ease after the interim deal to reopen the Strait of Hormuz, according to broker ACCM. Swaps traders were pricing in about a 60% chance of a quarter-point Federal Reserve interest-rate hike by December, down from about 80% on Friday. The war altered the trajectory of both the US dollar and Treasury yields. The greenback has strengthened since the conflict began, supported by haven demand, America’s status as a net energy exporter and expectations that higher energy costs may prompt the Fed to raise interest rates. Treasury yields also climbed as traders priced in the inflationary risks posed by higher oil prices. Global equity markets, though, largely shrugged off the turmoil. A gauge of world stocks continued to notch record highs throughout the conflict, most recently on June 2, as relentless enthusiasm for artificial intelligence outweighed geopolitical concerns. It rose as much as 0.6% on Monday. Elsewhere in markets, gold climbed nearly 3% while silver jumped about 4%. Base metals also rallied, with copper gaining more than 1% in London. The Bloomberg Dollar Spot Index dropped 0.3%. The cost of insuring Asian investment-grade debt against default slid to the lowest level since the start of the Iran war, a Markit index showed. Beyond geopolitics, the next major event risk for markets looms on Wednesday, when the Fed votes on interest rates for the first time under new Chair Kevin Warsh. If there’s a convincing message that the Fed is willing to shift back into inflation-fighting mode, Wall Street will likely be reassured about Warsh’s commitment to maintaining the bank’s political independence. Traders are also awaiting a swath of other central bank decisions this week as the energy-price shock from the Middle East war feeds into consumer prices and crimps growth. In Asia, the Reserve Bank of Australia is expected to keep its policy rate unchanged at the end of its two-day meeting on Tuesday, while the Bank of Japan may hike its rate to 1% — a level last seen in 1995. Bank Indonesia could lift rates again, according to a Bloomberg survey, after an out-of-cycle move last week to support its currency.
Nikkei +4.72% Hang Seng +0.60% CSI +1.85% Kospi +4.71% Shanghai +1.25% Shenzen +2.85%
Eur$ 1.1604 CNH 6.7581 CNY 6.7581 JPY 160.07 GBP 1.3441 CHF 0.7939 RUB 72.3770 TRY 46.2760 WTI$ 80.49 -5.17% Gold 4,324 +2.47% BTC 65,676 +2.81% ETH 1,717 +2.89%
S&P +1.29% Nasdaq +1.92% EuroStoxx +1.64% FTSE +0.76% Dax +1.65% SMI +1%
Macro :
- UK to Announce Social Media Ban for Teens This Week, Nandy Says
- CFTC Considers Blocking CME’s 24/7 Oil Contract Bid
- There’s a Bug in the Gold Trade as Miners Move Like Meme Stocks
- Japan to Continue Diplomatic Efforts for Mid-East Stability
- Goldman Expects Yuan Strength to Extend in the Months Ahead
Keep an eye on :
Keep an eye on :
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