US-Iran Ceasefire Plunges Oil, Boosts Global Stocks

Donald Trump held off on threatened attacks, accepting Iran's proposal for a ceasefire, with peace talks scheduled for Friday in Islamabad. European stock markets, including the pan-European Stoxx 600 (up 3.6%) and London's FTSE 100 (up 2.5%), rallied strongly, with travel and leisure stocks like Lufthansa (up 11.5%), IAG (up 9%), and TUI (up 11.6%) soaring.

Asia Pacific markets also saw strong gains, with Japan's Nikkei 225 up over 5% and South Korea's Kospi soaring 7.5%. Conversely, oil company shares, including BP (down 7.5%) and Shell (down 6.8%), tumbled.

Bond yields eased, with the 10-year Treasury falling to 4.24%, while gold prices rose over 2% to $4,812, and cryptocurrencies like Bitcoin (up 2.9% to $71,327) and Ether (up 5.6% to $2,234) advanced. Jim Reid of Deutsche Bank noted investor relief but highlighted uncertainties regarding the ceasefire's hold.

Saul Kavonic of MST Financial stated the ceasefire is an "off-ramp for Trump's overly bombastic ultimatum, but not yet an off-ramp for oil markets or the war," expecting only a release of stored oil, not increased production. Neil Shearing of Capital Economics emphasized the Strait of Hormuz's status, noting potential transit fees of $1-2 million per tanker, adding about $1 per barrel to oil costs.

Prashant Newnaha of TD Securities warned that renewed escalation cannot be ruled out, and oil prices are unlikely to return to pre-war levels, maintaining inflation persistence as a key market theme.