A US-Iran peace framework sparks a broad rally in equities and bonds while easing inflation fears tied to energy costs.
Global share markets and bonds rallied sharply on Monday after a US-Iran peace deal sent oil prices tumbling 5%. The agreement is expected to reduce inflationary pressures worldwide, potentially easing the need for further interest rate hikes. Europe’s STOXX 600 and FTSE Eurofirst hit record highs, while Asian markets surged overnight, with Wall Street futures pointing to gains of 1.3% to 2% later in the session.
The deal includes reopening the Strait of Hormuz, a critical oil transit route, though its implementation may depend on Israel halting hostilities in Lebanon. Talks on Iran’s nuclear program remain deferred. The agreement follows the recent $75 billion SpaceX IPO, adding to market optimism.
Central banks, set to meet this week, may face reduced pressure to tighten policy as energy-driven inflation concerns ease. Analysts described the deal as highly supportive for risk assets, though questions remain about long-term stability in the region.