Oil price drops, shares jump as Trump announces Israel-Iran ceasefire
Stocks rallied on Tuesday after US President Trump said that a "complete and total ceasefire" between Iran and Israel would take effect in the coming hours.
Iran's foreign minister denied that an official ceasefire agreement had been reached, but noted that Tehran would not continue its attacks as long as Israel halted its 'aggression'. At the time of writing, Israel had yet to comment.
The truce, which Trump is labelling the end of the '12-day war', came after Iran attacked a US base in Qatar on Monday, retaliating against the US bombing of its nuclear sites over the weekend.
In response to Tuesday's development, oil prices dropped as fears over a blockage to the Strait of Hormuz subsided.
About 20% of global oil and gas flows through this narrow shipping lane in the Gulf.
Brent crude, the international standard, dropped 3.83% to $68.74, while WTI dropped 3.85% to $65.87.
Last week, Brent reached over $78 a barrel, a level not seen since the start of this year.
Related
Why the Strait of Hormuz remains critical for the global economy
The dollar sees a rebound after US strikes Iran, but can it continue?
European markets opened in the green. The DAX was 1.99% higher at 23,730.98, the CAC 40 was up 1.71% at 7,666.69, while the FTSE 100 rose 0.81% to 8,828.83 in morning trading.
The STOXX 600 increased 1.48% to 542.93, while the EURO STOXX 50 rose 1.9% to 5,320.97.
Looking to the US, S&P 500 futures rose 0.97% to 6,135.75 on Monday, while Dow Jones futures increased 0.89% to 43,284.00.
Australia's S&P/ASX 200 jumped 0.89% to 8,550.10, South Korea's Kospi rose 2.75% to 3,097.28, and the Shanghai Composite index climbed 1.07% to 3,417.89.
Hong Kong's Hang Seng rose 2% to 24,162.70 and the Nikkei 225 increased 1.16% to 38,796.39.
The US Dollar Index slipped by 0.32% to 98.10. The euro gained 0.25% against the dollar while the yen dropped 0.48% in comparison to the greenback.
Economists had suggested that persistent threats to oil would increase the value of the US dollar and hurt other currencies such as the euro, notably as the US economy is more energy independent.
Greg Hirt, chief investment officer with Allianz Global Investors, told Euronews earlier this week that although the dollar may see a short lift on the Iran-Israel conflict, 'structural issues around a twin deficit and the Trump administration's volatile handling of tariffs should continue to weigh on an overvalued US dollar'.
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