Former US President Donald Trump has claimed that Iran and Israel have agreed to the ceasefire. He wrote on his social media platform ‘Truth Social’ that this ceasefire would be implemented in the next 12 hours and after that the struggle will be considered as “finish”. After this announcement by Trump, there was a boom in global markets and a steep fall in crude oil prices.
Heavy fall in crude oil prices
Crude oil prices fell by about 4% after Trump’s announcement. Earlier on Monday, there was a 9% decline in oil prices, when Iran carried out a symbolic attack on a US military hideout. However, there was no loss in that attack and Iran had indicated that it is not in favor of increasing stress.
America’s crude oil reached $ 65.75 per barrel.
As soon as the crisis on the hormuz strait, there was a wave of relief in the market.
Stock markets came in bright
There was a positive atmosphere in the stock markets from America to Japan. Investors breathed a sigh of relief and showed somewhat confidence in risky properties.
0.3% gains in S&P 500 index.
Nasdaq has a 0.5% jump.
Japan’s Nikkei index reached 38,905, which is quite above the previous day’s 38,354.
Florida’s investment advisor Jack Abbin said, “This has reduced the geopolitical uncertainty a bit, although investors were already ignoring it. If this ceasefire proves to be true, it would definitely be a major achievement.”
Bond, interest rate and dollar impact
The ceasefire news has reduced the need for safe investment. Due to this:
The price of America’s 10-year-old Treasury Bond declined by 6 ticks.
The expectation of interest rate cuts is slightly slow.
However, a few days ago, Fed official Michel Bovman said that the time to cut interest rates due to the decline in the employment market is near. Fed chief Jerome Powell will soon present its views in Parliament. Currently the market hopes that the interest rates are only 22% in the FOMC meeting of July 30.
Dollar, Yen and Euro move
After the news of the ceasefire, the dollar fell 0.1% to 145.92 Japanese yen.
The euro strengthened 0.1% to $ 1.1589.
The reason for this is that the fall in oil prices benefits Japan and Europe as they depend on oil imports, while the US is an oil exporting country.
Gold prices also fell
Gold prices fell by 0.4% due to low attractions of safe investment.
Gold now came to $ 3,353 an ounce.
