Investor sentiment remains stable despite failed negotiations, defying expectations of heightened Middle East risk premiums.
US and Iranian officials ended weekend peace talks without an agreement, leaving diplomatic efforts in limbo. The breakdown followed Iran’s delayed response to a proposed deal, which both sides ultimately rejected without counteroffers.
Prior negotiations had shown incremental progress, with markets pricing in a modest de-escalation premium in oil and safe-haven assets. Consensus estimates had anticipated a 3-5% upside in crude prices if talks failed, though Brent futures rose just 0.8% in early trading.
Equities opened mixed, with European indices flat and US futures slightly higher, suggesting limited spillover into broader risk assets.