Market Brief, North America

Oil prices have tumbled and the dollar is trading near a two-week low after Washington and Tehran announced they had reached a tentative agreement to pause the war in the Middle East and reopen the Strait of Hormuz. Pakistani Prime Minister Shehbaz Sharif, who brokered the final round of talks, revealed the deal, President Trump announced it on social media, and semi-official Iranian media outlets confirmed it. The full terms remain undisclosed, but the broad outlines are becoming clear: the US will relax sanctions on Iranian oil and petrochemicals, both sides will lift their shipping blockades, and negotiations on Iran’s...

Good morning. Oil prices are falling and risk assets are climbing after signals from both Washington and Tehran suggested the two sides are closing in on an agreement to pause hostilities and reopen the Strait of Hormuz to energy shipments. After President Trump yesterday announced he had cancelled scheduled strikes on Iran, saying the final points of a deal had been approved by all parties, Iran’s semi-official Mehr News Agency this morning published a 14-point draft “memorandum of understanding” it said was under discussion with the United States. Both Brent and West Texas Intermediate are down nearly 3%—bringing weekly losses...

Good morning. Financial markets are staging a muted recovery as the selloff in US technology stocks eases and tensions in the Middle East ratchet lower. Major indices are on course to extend yesterday’s advance at today’s open, and risk-sensitive assets are catching a bid, giving the euro, pound and yen room to gain against the dollar. Oil prices are slipping from their highs as the conflict in the Middle East shows tentative signs of improvement. Iranian authorities announced an end to military operations against Israel, and Prime Minister Netanyahu said Israel would pause its strikes in return. President Trump told...

Good morning. The dollar is trading near a two-month high, lifted by three forces pulling in the same direction: a blockbuster payrolls report that has triggered a hawkish reappraisal of the Federal Reserve’s likely policy trajectory, a meltdown in technology stocks, and an intensifying conflict in the Middle East that is raising inflation risks further. Treasury yields are holding at elevated levels after Friday’s payrolls print convinced investors that inflation remains a bigger risk than unemployment*. The economy added 172,000 jobs in May—more than double the consensus forecast of 85,000—and the unemployment rate ticked lower. Diffusion indices showed more industries...