The agreement comes at a time when central banks in the United States, the United Kingdom, Japan, Australia, Switzerland, Sweden, Norway, and Russia are preparing to hold monetary policy meetings.

Investors believe that the decline in oil prices may ease global inflationary pressures and reduce the need for more aggressive interest rate hikes. Traders quickly scaled back their bets on further monetary tightening this year.

Bond markets benefited from these expectations, with the yield on US two year Treasury notes falling by six basis points to 4.02%.

The drop in bond yields also weighed on the dollar, which fell to its lowest level in ten days against a basket of major currencies.

The euro rose to 1.1617 dollars, while the British pound climbed to 1.3446 dollars. The Australian dollar and New Zealand dollar also posted gains amid improved risk appetite for higher risk assets.

In contrast, the Japanese currency continued to trade near 160 yen per dollar, despite expectations that the Bank of Japan will raise interest rates by 25 basis points.

The wave of optimism quickly spread to global equity markets.

In Asia, Japan’s Nikkei index jumped 4.9%, benefiting from lower energy prices, as Japan is one of the largest energy importers. South Korea’s Kospi index rose 5.4%, while China’s blue chip index climbed 1.4%.

The broader Asia Pacific index excluding Japan rose 2.8%.

In Europe, futures on the Euro Stoxx 50 and Germany’s DAX index each rose by around 1.7%, while futures on the UK’s FTSE index added 0.7%.

In the United States, S&P 500 futures rose about 1.2%, while Nasdaq futures jumped 1.9%.

Cryptocurrencies among the gainers

The improvement also extended to the cryptocurrency market, where Bitcoin rose by about 2% to 65,646 dollars, moving above the 65,000 dollar level as geopolitical risks eased and concerns over inflation declined.

In precious metals markets, gold rose, benefiting from the weaker dollar and lower US yields despite the easing of geopolitical tensions.

The precious metal gained 2.5% in spot trading to 4,322 dollars per ounce, after earlier reaching 4,297 dollars.

Investors believe that lower oil prices could reduce inflationary pressures that had been pushing central banks to keep interest rates higher for longer, which in turn supports gold as a non-yielding asset.

However, markets are still treating some unresolved aspects of the agreement with caution.

Iranian Deputy Foreign Minister Kazem Gharibabadi said that a broader agreement will be negotiated during the 60-day ceasefire period.

US President Donald Trump also said that the United States could resume military action if a final agreement is not reached on the Iranian nuclear program.

Meanwhile, the United Kingdom, France, Germany, and Italy announced their readiness to lift sanctions on Iran in exchange for steps taken by Tehran regarding its nuclear program, opening the door to a new phase of diplomatic negotiations that could be decisive for the future of global energy markets.

Investors are now watching how quickly oil and refined product exports resume through the Strait of Hormuz, and the extent of damage to energy infrastructure during the war, factors that will determine whether the current decline in oil prices will continue in the coming months.

Five key facts

• Brent crude fell about 4.7% to 83.24 dollars per barrel after the peace agreement announcement.

• Japan’s Nikkei index jumped 4.9% and South Korea’s Kospi rose 5.4% amid improved risk appetite.

• The dollar fell to a ten-day low against major currencies.

• Gold rose to about 4,322 dollars per ounce, supported by lower US yields.

• Bitcoin climbed above 65,000 dollars as geopolitical risks eased and investor sentiment improved.