Asian markets rallied on Monday while oil prices slid and the dollar weakened after the United States and Iran agreed to a peace deal, boosting risk appetite.
Prime Minister Shehbaz Sharif said early Monday that a deal had been struck. US President Donald Trump said the agreement included reopening the Strait of Hormuz, though details remained limited.
Brent crude fell 4% to USD 83.80 a barrel. US crude dropped 4.3% to USD 81.23 a barrel but stayed above its pre-war level near USD 67.
S&P 500 futures rose 0.8%, while Nasdaq futures gained 1.4%. Nikkei futures climbed 2% to 68,685, above Friday’s cash close of 66,020.
Sean Callow, senior foreign exchange analyst at ITC Markets, said the lack of detail on shipping freedom remained a concern. However, he said it was unlikely to hold back markets as risk appetite improved.
Callow said the prospect of a sustained drop in energy prices could shift the discussion among central banks ahead of several policy meetings this week.
The Federal Reserve is expected to keep rates at 3.50% to 3.75% on Wednesday at Chair Kevin Warsh’s first meeting. Investors will watch the statement, projections and news conference for inflation signals.
The Bank of England is expected to hold rates at 3.75% on Thursday. Central banks in Japan, Australia, Switzerland, Sweden, Norway and Russia are also due to meet this week.
Read :US-Iran Peace Agreement Draws Global Praise For Pakistan
The dollar weakened as yields fell. The euro rose 0.4% to USD 1.1608, sterling gained 0.3% to USD 1.3446, and the dollar slipped 0.2% to 159.93 yen.
Gold rose 1.4% to USD 4,280 an ounce as lower yields supported the non-interest-paying metal.
