SYDNEY--Global shares rallied and the dollar extended declines on Tuesday after U.S. President Donald Trump said Iran and Israel had agreed to a ceasefire, sending oil prices into a deep dive as concerns over supply disruptions ebbed.
Writing on his Truth Social site, Trump implied a ceasefire would go into effect in 12 hours, after which the war would be considered "ended".
There was no immediate comment yet from Israel. While an Iranian official earlier confirmed that Tehran had agreed to a ceasefire, the country's foreign minister said there would be no cessation of hostilities unless Israel stopped its attacks.
Oil prices fell over 3%, having already slid 9% on Monday when Iran made a token retaliation against a U.S. base, which came to nothing and signalled it was done for now.
With the immediate threat to the vital Strait of Hormuz shipping lane seemingly over, U.S. crude futures CLc1 fell another 3.4% to $66.15 per barrel, the lowest since June 11."With markets now viewing the escalation risk as over, market attention is likely to shift towards the looming tariff deadline in two weeks time," said Prashant Newnaha, senior Asia-Pacific rates strategist at TD Securities."Our sense is that the quicker than expected resolution to the Middle East conflict leads to expectations for a swifter resolution on tariffs and trade deals."
Risk assets rallied, with S&P 500 futures ESc1 up 0.6% and Nasdaq futures NQc1 0.9% higher. EUROSTOXX 50 futures STXEc1 jumped 1.3% and FTSE futures FFIc1 rose 0.4%.
The MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS jumped 1.8% while Japan's Nikkei .N225 rallied 1.4%.
Two sources told Reuters that Japan's tariff negotiator Ryosei Akazawa is arranging his seventh visit to the United States for as early as June 26, aiming to end tariffs that are hurting Japan's economy.
