Asian equities surged on Monday, with Japan’s Nikkei 225 climbing 3.1% to fresh record highs as markets welcomed more hopeful signals from the latest US-Iran diplomatic talks. Investors, never shy about pricing in optimism at high speed, quickly began whispering about a possible “peace dividend”, one where Middle East tensions ease, the Strait of Hormuz remains open, and global inflation pressures finally cool somewhat.
WTI crude futures fell roughly 5% toward USD91 per barrel, while gold, refusing to fully cooperate with anyone’s neat macro narrative as usual, rebounded sharply toward USD4,600 an ounce after last week’s pullback.
A final path to peace? For one trading session at least, markets appeared willing to believe diplomacy may prove more profitable than conflict. That alone probably deserves its own risk asset rally.
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