Markets Rally as U.S. Pauses Attacks on Iran

Overview

• U.S. officials said President Trump suspended strikes over the weekend and Iranian authorities said they would hold retaliatory fire while the pause lasts.
• The announcement sent Brent and WTI prices sharply lower with Brent trading back below US$90 and global equity indexes and sovereign yields moving higher.
• Traders and central bankers took relief from the drop in oil-driven inflation risk but noted the pause is not a formal ceasefire and could be reversed.
• The region remains dangerous because Houthi groups kept claiming attacks on Saudi facilities, the IRGC reported blocking ships in the Strait of Hormuz, and Gulf crude exports have fallen sharply.
• Analysts warn the supply shock is structural: alternate western Saudi routes and pipelines have replaced much Gulf flow and exports are down steeply, which keeps prices and policy risks elevated even if short-term tensions ease.