As of 12:00 Germany time (CEST, UTC+2)
TL;DR: Markets ended the week with evidence that the Strait of Hormuz reopening is becoming physical, but less confidence that the political agreement is secure. Oil remained near $80 and European equities edged higher, while delayed U.S.-Iran talks, a 13-month high in the dollar and renewed yen weakness showed that geopolitical relief has not yet translated into easier financial conditions.
In Asian Equity Markets stocks ended an exceptional week with a more mixed session as investors balanced strong technology momentum against renewed uncertainty around the U.S.-Iran agreement. Japan's Nikkei rose around 0.3 percent to another record high, leaving it on track for a weekly gain of roughly 7.6 percent. South Korea's KOSPI slipped around 0.1 percent but remained close to its record after gaining approximately 11 percent over the week. Markets in Hong Kong, mainland China and Taiwan were closed for the Dragon Boat Festival. The regional tape showed that the equity response to lower oil remains constructive, but Friday's smaller moves suggested that much of the immediate relief had already been priced.
In European Equity Markets stocks edged higher as gains in energy and healthcare offset caution around the postponed U.S.-Iran talks. The pan-European STOXX 600 gained around 0.2 percent, while Germany's DAX and France's CAC 40 rose approximately 0.3 percent each. Energy shares advanced as oil stabilised, while defensive healthcare names including Novo Nordisk and AstraZeneca supported the index. ASML moved lower after reports of renewed U.S. concerns around advanced chipmaking equipment reaching China. European equities remain set for a second consecutive weekly gain, but the sector rotation still reflects uncertainty rather than a full return to risk appetite.
In U.S. Equity Markets cash markets were closed for the Juneteenth holiday, leaving investors to assess Thursday's technology-led rally and the implications of postponed U.S.-Iran talks. The S&P 500 had gained around 1.1 percent on Thursday and the Nasdaq Composite rose roughly 1.9 percent, supported by sharp advances in semiconductor shares. Intel surged after announcing plans to produce chips for Apple in the United States, while Nvidia and Micron also gained strongly. Friday's lighter-liquidity session provided little new confirmation, making next week's reopening more important for testing whether the technology rally can extend under a stronger dollar and a still-hawkish Fed backdrop.
In Commodities Markets oil steadied near $80 as traders weighed actual tanker movement through the Strait of Hormuz against reduced confidence in the political agreement. Brent traded around $79.78 per barrel and remained on course for a weekly decline of more than 8 percent. The actively traded WTI contract held near $76. Several tankers, including three Saudi-flagged vessels carrying around 6 million barrels of crude, have now passed through Hormuz, providing the clearest evidence yet that the reopening is becoming physical. But full recovery in shipping and production could still take months, while the postponement of U.S.-Iran talks and renewed fighting in Lebanon kept a residual geopolitical premium in place.
In Currency Markets the U.S. dollar reached a 13-month high as investors responded to the Federal Reserve's hawkish policy signal and renewed doubts around the durability of the U.S.-Iran agreement. The dollar index was on track for a weekly gain of around 1 percent, while the euro recovered toward $1.1464 after touching a three-month low earlier in the session. The yen traded around 161.3 per dollar after reaching 161.8 on Thursday, leaving it close to its weakest level in roughly 40 years. The move places Japanese intervention risk firmly back in focus, particularly in a lower-liquidity holiday session.
In Bond Markets the U.S. cash Treasury market was closed for Juneteenth, but the week's curve move showed that lower oil has not fully removed tightening risk. The U.S. 10-year yield was around 4.45 percent, below the 4.60 percent threshold that previously challenged equity valuations. Two-year yields, however, were nearly 10 basis points higher over the week as investors priced a greater likelihood of at least one Federal Reserve rate increase this year. The curve is therefore reflecting two competing views: near-term policy may become tighter, but the decline in oil could prevent that tightening cycle from becoming prolonged.
The Cross-Asset Read
Friday exposed a split inside the peace trade.
The oil market is beginning to price implementation. Tankers are moving through the Strait of Hormuz, stranded barrels are starting to leave the Gulf and Brent has returned to levels last seen near the beginning of the conflict. Those are physical developments rather than diplomatic promises.
Other markets are pricing more doubt.
Global equities stopped extending as peace talks were postponed. The dollar reached a 13-month high because the Fed kept tightening risk alive. The yen weakened beyond 161 despite the Bank of Japan's latest rate increase, creating a separate risk that Japanese authorities intervene directly in the currency market.
Reopened shipping can reduce the energy premium without producing broad financial easing if the Fed remains hawkish and the political agreement stays fragile.
The immediate checkable flag is Brent. Holding below $85 would remain consistent with gradually normalising Hormuz flows. A sustained move above $90 would signal that diplomatic setbacks are rebuilding the geopolitical premium and weakening the reopening thesis.
For now, the oil market believes the flows. The dollar is still pricing the doubt.
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