Key facts
- A US-Iran truce has been announced, including the reopening of the Strait of Hormuz.
- Zimbabwe's central bank cut its benchmark interest rate to 30% from 35%.
- The US-Iran deal has eased investor concerns about potential interest rate hikes.
- Oil prices have fallen following the announcement.
- The Bank of Japan is expected to raise rates, while the Reserve Bank of Australia is anticipated to hold steady.
President Trump announced a preliminary agreement to end the Middle East war, which includes the reopening of the Strait of Hormuz. This development has boosted investor sentiment and eased fears of further interest rate hikes, with Zimbabwe's central bank cutting its benchmark rate to 30% from 35%.
Global markets cheered the news, sending oil prices down. While details of the agreement are not yet public, the prospect of normalized shipping through the Strait of Hormuz is seen as a significant positive for risk appetite. However, analysts caution that the path to full supply chain normalization remains uncertain, and near-term inflation concerns persist.
Attention is now turning to central bank meetings, including the Bank of Japan, which is widely expected to raise rates, and the Reserve Bank of Australia, which is anticipated to hold steady. The US dollar has held near 10-day lows as investors await these policy decisions.