Morning Wrap- Oil drops after Trump announces peace (12.06.2026)

🌍 Geopolitics

• President Donald Trump has announced a near-agreement with Iran, which has halted planned US strikes and triggered sudden optimism in global markets.
• A peace agreement could be signed in Europe as early as this weekend, with the participation of US Vice President JD Vance.
• Authorities in Tehran are distancing themselves from the White House declaration, emphasizing that the final approval from the Supreme Leader has not yet been issued. On the other hand, the FARS agency indicates a high probability of reaching an agreement.
• According to Axios reports, the deal involves a 60-day ceasefire, a full opening of the Strait of Hormuz, and a partial lifting of sanctions on Iran.
• Tensions in the waters around the Strait of Hormuz remain high – US forces shot down two Iranian combat drones targeting commercial vessels during the night.
• The Iranian Navy (IRGC) blocked a tanker attempting to pass through the Strait of Hormuz without coordination, and explosions were recorded near Sirik.

📈 Stock Markets and Companies

• Asian stock markets saw massive gains driven by de-escalation – the MSCI AC Asia Pacific index rose by 3.5%, marking its best performance in two months.
• Japan's Nikkei surged by about 4%, though it later reduced the gain to 2.8%. The JP225 contract is slightly negative. South Korea's Kospi is up 5%, and the Hong Kong index (Hang Seng CE) is rising by 1.6%.
• Futures in Europe rose during the Asian session but are currently giving back some of those moves and are slightly down before the open. The cash session will open higher, however, as most of yesterday's gains occurred in futures contracts.
• SpaceX debuts on the Nasdaq today after a record $75 billion IPO – the unofficial market is pricing the shares at a 35% premium, implying a company valuation of $2.4 trillion.
• Adobe Inc. reported the departure of its Chief Financial Officer (CFO), which deepens gaps in the management team following the announcement of the CEO's resignation.
• Intel Corp. shares gained strongly after Bank of America upgraded its recommendation for the US chipmaker to "buy."
• Alibaba Group has made a $1.5 billion offer to acquire Pupu, posing a direct challenge to competitor Meituan in the e-commerce sector.

📊 Macroeconomics and Bonds

• US Treasury yields fell significantly following the de-escalation in the Middle East. 10-year note yields dropped below 4.47%.
• The interest rate market drastically changed its expectations for the Fed, pushing the 25 bps December hike to the first quarter of 2027.
• UK GDP shrank by 0.1% m/m in April, which was in line with forecasts while the services sector slowed down (-0.2% m/m).
• Final CPI inflation in Germany for May was 2.6% y/y, confirming previous estimates and falling from the 2.9% level recorded in April.
• New Zealand's manufacturing PMI fell to 49.9 points, reflecting the negative impact of fuel costs and the conflict in the Middle East.

🛢️ Commodities

• Crude oil prices fell sharply in response to news of potential peace. Brent oil is dropping below $90 a barrel, hitting its lowest levels since March. WTI oil is trading below $85 a barrel.
• Global fuel and commodity inventories are shrinking drastically. Fuel reserves in Singapore are the lowest since 2013, and US oil inventories have been falling for 5 weeks.
• The gold spot price is down 0.7%, despite the drop in oil prices. Gold is currently trading below $4,200 an ounce.

💱 Currencies

• Major currency pairs remain stable. The exchange rate of the most important currency pair, EURUSD, is 1.1567, and the Chinese yuan is trading at 6.7642 against the dollar.
• The Japanese yen weakened by 0.2% against the dollar to 160.25, maintaining pressure near the potential currency intervention zone. The BoJ is likely to decide on an interest rate hike next week.

₿ Cryptocurrencies

• Bitcoin rebounded during the Asian session but is currently down 0.5% and falling below $63,000.