Asian Stocks Steady, Oil Dips Following US-Iran Interim Peace Deal
Market Reactions to US-Iran Interim Peace Deal
By Satoshi Sugiyama
Overview of the Peace Deal
TOKYO, June 18 (Reuters) - Asian stocks were steady and oil prices dipped on Thursday as investors assessed progress toward ending the war in the Middle East after the presidents of the U.S. and Iran signed an interim peace deal, though uncertainties still hovered.
Both countries released the text of the agreement, which had already circulated widely before its contents were published. It extends a ceasefire announced in April by another 60 days to allow the two sides to negotiate a final truce.
U.S. President Donald Trump, however, threatened to resume attacks and kill Iranian officials if they failed to honour their commitments.
"Major geopolitical risk persists and will also remain a major driver of market action," said Kyle Rodda, a senior financial market analyst at Capital.com.
Asian and Global Stock Market Performance
Asian Indices
MSCI's broadest index of Asia-Pacific shares outside Japan was flat. Japan's Nikkei share average rallied to another record high, surging past the 71,000 level for the first time, on solid gains in semiconductor and AI-related shares, while South Korean shares gained 0.9%. U.S. stock futures, the S&P 500 e-minis, were up 0.81% at 7,484.8.
The benchmark 10-year Japanese government bond yield rose 2 basis points to 2.620%, poised for its highest close since June 16, after earlier touching 2.63%.
Oil and Commodity Prices
Oil prices fell, with U.S. crude dipping 1.25% to $75.83 a barrel and Brent crude down 1.4% to $78.41 per barrel.
Wall Street and US Market Movements
Overnight on Wall Street, all three major indexes fell close to or more than 1% as traders bet that the Federal Reserve's next move would be a rate hike after new Fed Chair Kevin Warsh highlighted the need to tame inflation and other policymakers projected rising interest rates later this year.
The Dow Jones Industrial Average fell 507.12 points, or 0.98%, to 51,492.55, the S&P 500 fell 91.25 points, or 1.21%, to 7,420.10 and the Nasdaq Composite fell 354.69 points, or 1.34%, to 26,021.66.
The yield on benchmark 10-year Treasury notes rose to 4.471% compared with its U.S. close of 4.463% on Wednesday. The 2-year yield, which rises with traders' expectations of higher Fed funds rates, touched 4.1759% compared with a U.S. close of 4.163%.
Global Currency and Central Bank Updates
Central Bank Meetings
The Bank of England meets on Thursday and, as with the Fed, no change in rates is expected, leaving the focus on the tone of policymakers' commentary.
Currency Movements
The dollar rose 0.01% against the yen to 160.65 after touching 160.79 overnight, hitting its highest level since July 2024.
The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, fell 0.03% to 100.32. The euro was up 0.1% at $1.1511.
Commodities and Cryptocurrencies
Oil and Gold
Recent declines in oil prices have begun to ease worries about an economic slowdown, especially in energy-importing Europe. The International Energy Agency said on Wednesday the oil market would move into a significant supply surplus in 2027 after recovering from the closure of the Strait of Hormuz.
Spot gold traded at $4,309.75 per ounce. [GOL/]
Cryptocurrency Market
In cryptocurrencies, bitcoin gained 0.16% to $64,464.75. Ethereum rose 0.37% to $1,752.54.
Reporting
(Reporting by Satoshi Sugiyama; Editing by Jamie Freed)
