Oil dived, bonds rallied and stocks surged as the ceasefire was seen as paving the way for a lasting peace and resumption of Gulf oil and gas exports.
Below are some reactions from investors and analysts:
“We still have a long way to get back to where we were before this began. The worry now is the markets are unsure of the extent to which the oil price is going to get back to US$75.
“This little precipice where actually oil is flowing, no one has a shortage, but it stays at an equilibrium price of US$90, that is actually where you remove the tail risk that central banks are cutting,” Barrenjoey chief rates strategist Andrew Lilley said.
“It’s kind of the scenario that results in permanently high yields because we’re going to have damaged infrastructure and a sticky high oil price for months to come, which means that we are going to get higher inflation,” Lilley said.
“Restocking energy supplies is the key over the next week as the conflict can reignite very quickly.
“This decreases the probability of a recession particularly if more oil, gas, fertiliser can flow in the next week or so,” K2 Asset Management head of research George Boubouras.
Markets are always pragmatic and not complacent as they are looking through the conflict and valuations remain compelling on a one-year view,” Boubouras. added.
“This is what happens all the time. Does it mean people are going to take new risks? No, it doesn’t.
“It would have to actually be a lasting peace (to change things). People aren’t actually taking risk. This is algos doing stuff,” Westpac head of financial markets strategy Martin Whetton.
“President Trump said he agreed to a two-week ceasefire. That’s enough to keep hopes alive that not only will an entire civilisation NOT be destroyed, but we could see oil start flowing through the Strait of Hormuz.
“Is it just kicking the can down the road, moving the goal posts, TACO Tuesday, or whatever metaphor we’d like, to only to have tempers flare and bombs drop again? Who knows? But it’s good enough for now to elicit a positive response from the markets,” Annex Wealth Management chief economist Brian Jacobsen.