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Oil rises and Asian stocks fall amid worries over ‘fragile’ ceasefire deal in Middle East – business live | Business
Introduction: Oil prices rise and Asian stocks fall amid worries over uncertain ceasefire deal
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
Uncertainty over the US-Iran ceasefire deal has triggered a rise in oil prices this morning.
Brent crude, the international benchmark for oil prices, rose by 2.1% to $96.77 a barrel, while New York light crude rose by almost 3% to $97.23 a barrel. Yesterday, Brent crude dropped by more than 10% after initial news of the ceasefire emerged.
Meanwhile Asian stocks have been choppy overnight: Japan’s Nikkei has slipped by 0.7% and the South Korean Kospi has dropped sharply by 2%. Both countries are highly exposed to the conflict in the Middle East as they rely on oil and gas supplies from the region.
In China, the CSI300 index fell 0.5% and Hong Kong’s Hang Seng also slipped 0.2%.
It comes as investors worry about the ‘fragile’ nature of the US-Iran ceasefire deal announced yesterday, as Israel continues its assaults on Lebanon and the impasse in the strait of Hormuz continues.
Jim Reid, a strategist at Deutsche Bank, says this morning:
Those overnight losses follow several indications that the ceasefire isn’t holding quite as expected on Tuesday night. For instance, both the UAE and Kuwait said yesterday that their air defences had been intercepting drones from Iran. And on the Iranian side, their Parliament’s Speaker Ghalibaf said that three points of the ceasefire agreement had been violated.
Moreover, the IRGC warned of a “regret-inducing response” if Israel’s strikes against Lebanon didn’t stop immediately, whilst the Fars news agency said that the passage of oil tankers through the Strait of Hormuz was halted because of Israel’s continued strikes on Lebanon. So collectively, that’s raised concern about how durable this ceasefire will prove, particularly with it only being a two-week truce.”
Reid notes that US president Donald Trump posted on social media a couple of hours ago that US forces would “remain in place, and around, Iran, until such time as the REAL AGREEMENT reached is fully complied with”, and that if not military action would be “stronger than anyone has ever seen before”, and that the US military was “looking forward, actually, to its next Conquest”.
He also criticised NATO in a separate post overnight, saying that they weren’t “there when we needed them”, and called on people to “remember Greenland, that big, poorly run, piece of ice!!!”. So that raised concerns about a repeat of mid-January, when Trump’s call for the US to take Greenland and the threat of European tariffs drove a risk-off move in global markets.
The agenda
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8.30am BST: Bank of England governor Andrew Bailey appears before the European parliament committee on economic and monetary affairs
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9.30am BST: Bank of England credit conditions survey for Q1 2026
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1.30pm BST: US gross domestic product, initial jobless claims, PCE inflation measure and wholesales inventories
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3pm BST: IMF managing director Kristalina Georgieva expected to deliver a speech on the outlook for the global economy and outline key policy priorities for member countries
Key events
Israel instructs Energean to reopen natural gas platform
Perhaps a sign that Israel expects the ceasefire to hold: the Israeli energy ministry has instructed Energean to reopen operations at its Karish natural gas platform, Reuters has reported.
The gas platform, which is off Israel’s Mediterranean coast, has been shut down for more than a month since the outbreak of war with Iran.
Mohit Kumar, of the broker Jefferies, says the “fragile” nature of the ceasefire deal has started to show cracks after Iran accused the US and Israel of breaking the terms due to attacks on Lebanon – but that the agreement could still hold.
Despite the fragile nature of the ceasefire, we believe that the truce will hold. Not because we believe that a solution has been found but because of the MAD (mutually assured destruction) principle.
…US and Israel have realised that without a solution to cheap drone interceptors and someway to bypass the Strait of Hormuz, it’s a war that cannot be won. IRGC will be struggling with a destroyed economy which can pave the path for an uprising later. Hence, need time to consolidate their power particularly after a number of senior leaders have been killed. Given the interest of both parties, we believe that an uneasy truce will hold.
But as argued yesterday, it’s an unstable equilibrium. The biggest losers of this arrangement have been the Gulf countries who would face an emboldened Iran. Iran’s ideology to export the Islamic Revolution would not bode well for the other gulf countries. Economically too, they have taken a setback with the path of projecting Middle East as an investment hub potentially delayed by a few years.
Hence, we do not see oil going back to pre war levels. We also think that a geopolitical risk premium would need to be priced in different asset classes.
From a market perspective, we have been in the low risk mode but with a positive bias. The positive view remains beyond the war, but we are not ready to sound all clear. Hence for investors who are long risk, we would recommend using yesterdays rally to take some profits which still keeping a positive risk bias. Market positioning is still small short to neutral and hence we would definitely not want to be short this market.
Here’s Trump’s full post on his social media platform, Truth Social:
All U.S. Ships, Aircraft, and Military Personnel, with additional Ammunition, Weaponry, and anything else that is appropriate and necessary for the lethal prosecution and destruction of an already substantially degraded Enemy, will remain in place in, and around, Iran, until such time as the REAL AGREEMENT reached is fully complied with. If for any reason it is not, which is highly unlikely, then the “Shootin’ Starts,” bigger, and better, and stronger than anyone has ever seen before. It was agreed, a long time ago, and despite all of the fake rhetoric to the contrary – NO NUCLEAR WEAPONS and, the Strait of Hormuz WILL BE OPEN & SAFE. In the meantime our great Military is Loading Up and Resting, looking forward, actually, to its next Conquest. AMERICA IS BACK!
Introduction: Oil prices rise and Asian stocks fall amid worries over uncertain ceasefire deal
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
Uncertainty over the US-Iran ceasefire deal has triggered a rise in oil prices this morning.
Brent crude, the international benchmark for oil prices, rose by 2.1% to $96.77 a barrel, while New York light crude rose by almost 3% to $97.23 a barrel. Yesterday, Brent crude dropped by more than 10% after initial news of the ceasefire emerged.
Meanwhile Asian stocks have been choppy overnight: Japan’s Nikkei has slipped by 0.7% and the South Korean Kospi has dropped sharply by 2%. Both countries are highly exposed to the conflict in the Middle East as they rely on oil and gas supplies from the region.
In China, the CSI300 index fell 0.5% and Hong Kong’s Hang Seng also slipped 0.2%.
It comes as investors worry about the ‘fragile’ nature of the US-Iran ceasefire deal announced yesterday, as Israel continues its assaults on Lebanon and the impasse in the strait of Hormuz continues.
Jim Reid, a strategist at Deutsche Bank, says this morning:
Those overnight losses follow several indications that the ceasefire isn’t holding quite as expected on Tuesday night. For instance, both the UAE and Kuwait said yesterday that their air defences had been intercepting drones from Iran. And on the Iranian side, their Parliament’s Speaker Ghalibaf said that three points of the ceasefire agreement had been violated.
Moreover, the IRGC warned of a “regret-inducing response” if Israel’s strikes against Lebanon didn’t stop immediately, whilst the Fars news agency said that the passage of oil tankers through the Strait of Hormuz was halted because of Israel’s continued strikes on Lebanon. So collectively, that’s raised concern about how durable this ceasefire will prove, particularly with it only being a two-week truce.”
Reid notes that US president Donald Trump posted on social media a couple of hours ago that US forces would “remain in place, and around, Iran, until such time as the REAL AGREEMENT reached is fully complied with”, and that if not military action would be “stronger than anyone has ever seen before”, and that the US military was “looking forward, actually, to its next Conquest”.
He also criticised NATO in a separate post overnight, saying that they weren’t “there when we needed them”, and called on people to “remember Greenland, that big, poorly run, piece of ice!!!”. So that raised concerns about a repeat of mid-January, when Trump’s call for the US to take Greenland and the threat of European tariffs drove a risk-off move in global markets.
The agenda
-
8.30am BST: Bank of England governor Andrew Bailey appears before the European parliament committee on economic and monetary affairs
-
9.30am BST: Bank of England credit conditions survey for Q1 2026
-
1.30pm BST: US gross domestic product, initial jobless claims, PCE inflation measure and wholesales inventories
-
3pm BST: IMF managing director Kristalina Georgieva expected to deliver a speech on the outlook for the global economy and outline key policy priorities for member countries
The man said his home has been targeted three times in the last five months.
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UK News
European stock markets hit record high and oil price falls to three-month low after US-Iran peace deal – business live | Business
European stock markets hit record high
European stock markets have hit a record high at the start of trading, as relief over the US-Iran peace deal ripples across global markets.
The pan-European Stoxx 600 index has jumped by 0.9% to 639 points, over the previous record high set just before the Iran war started, with shares rising in London, Frankfurt, Paris, Madrid and Milan.
Mining and travel companies are driving the rally, while oil company shares are sliding.
That follows sharp gains in Asia-Pacific markets overnight, where Japan’s Nikkei surged by 5% on hopes that the strait of Hormuz will reopen within days.
Matt Britzman, senior equity analyst at Hargreaves Lansdown, says global equity markets are starting the week firmly on the front foot after President Trump announced that a deal with Iran had been reached, adding:
The move has given investors a clear reason to dial back some of the geopolitical risk premium that has hung over markets, especially as the Strait of Hormuz is expected to reopen and oil prices move sharply lower.
Energy prices have been one of the clearest transmission channels from Middle East tensions into inflation, bond yields and equity sentiment, and there is likely to be a concerted effort to get prices down even further once this deal is finalised.
There are still details to be ironed out before markets can fully trust the agreement, but for now the direction of travel is clear: lower oil, calmer nerves and a renewed appetite for risk.
Key events
Peace deal should keep mortgage rates down
Mortgage borrowers can breathe a sigh of relief at the news of a peace deal in Iran, says Adam French, head of consumer finance at Moneyfactscompare.co.uk.
While we are far from being out of the woods yet, a lasting peace deal should dramatically reduce the risk of the Bank of England’s worst-case scenario for inflation and interest rates becoming a reality.
“Under that scenario, Base Rate could have risen to 5.25%, potentially pushing typical rates on new mortgages towards 6.75%. Instead, today’s news means mortgages rates, which have already been slowly falling for several weeks, have likely already passed their peak – at least until the next unwelcome crisis.
“Borrowers can be optimistic but with a word of caution, as inflation and economic data will continue to influence the outlook. However, a lasting peace should remove one of the biggest risks to mortgage costs and may help restore a more stable environment for hard-pressed remortgage borrowers and prospective buyers.”
Even before this morning’s drop in UK bond yields (see earlier post), average mortgage rates have dipped slightly.
Moneyfacts reports:
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The average 2-year fixed residential mortgage rate today is 5.61%. This is down from 5.62% the previous working day.
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The average 5-year fixed residential mortgage rate today is 5.58%. This is down from 5.59% the previous working day.
Why it may take months for oil flows to return to normal
Donald Trump excitedly declared: “Ships of the World, start your engines. Let the oil flow!” last night, but the reality is that it will take some time for oil flows through the strait of Hormuz to return to pre-war levels.
One reason is that many oil tankers are simply in the wrong place, after the long closure of the strait.
Another is that some production and refining facilities have been damaged by the conflict, while others were mothballed after storate facilities filled up to the brim.
A third factor is that insurers could still be wary of the conflict reigniting, and price their cover accordingly.
Neil Shearing, group chief economist at Capital Economics, explains:
Even if ships now have safe passage, tankers are in the wrong place, oil production/refining facilities need to get up to full capacity, and questions over the cost and availability of insurance for ships traversing the Strait will remain.
Our current working assumption is that ~80% of energy flows will resume by the end of Q3. Natural gas flows will be slower to return, following the damage to Qatari facilities earlier in the conflict, which according to local officials has put 17% of production offline for two to three years.
US crude drops below $80
US crude oil has dropped to its lowest level since the second week of the Iran war.
The cost of a barrel of West Texas Intermediate (WTI) light sweet crude has dropped by 6% today to $79.72 per barrel, the first time since 10 March that it has been under $80/barrel.
That could help to pull down US gasoline prices, which climbed after the conflict began, hitting consumer confidence.
UK bond yields fall
Today’s relief rally is also driving up government bond prices, pushing down the cost of borrowing.
The yield (or interest rate) on 10-year UK government debt has dropped by 6.5 basis points (0.065 of a percentage point) to 4.775%.
Two-year bond yields are down 8bps to 4.16%.
Lower bond yields indicate that that the cost of issuing new government debt has fallen, which will be a relief for the UK Treasury after the Iran war drove up borrowing costs.
Copper mining company Antofagasta is now the top riser on the FTSE 100, up almost 8%.
Trader will be concluding that an end to the Iran war will boost the world economy, leading to more demand for raw materials such as copper.
European stock markets hit record high
European stock markets have hit a record high at the start of trading, as relief over the US-Iran peace deal ripples across global markets.
The pan-European Stoxx 600 index has jumped by 0.9% to 639 points, over the previous record high set just before the Iran war started, with shares rising in London, Frankfurt, Paris, Madrid and Milan.
Mining and travel companies are driving the rally, while oil company shares are sliding.
That follows sharp gains in Asia-Pacific markets overnight, where Japan’s Nikkei surged by 5% on hopes that the strait of Hormuz will reopen within days.
Matt Britzman, senior equity analyst at Hargreaves Lansdown, says global equity markets are starting the week firmly on the front foot after President Trump announced that a deal with Iran had been reached, adding:
The move has given investors a clear reason to dial back some of the geopolitical risk premium that has hung over markets, especially as the Strait of Hormuz is expected to reopen and oil prices move sharply lower.
Energy prices have been one of the clearest transmission channels from Middle East tensions into inflation, bond yields and equity sentiment, and there is likely to be a concerted effort to get prices down even further once this deal is finalised.
There are still details to be ironed out before markets can fully trust the agreement, but for now the direction of travel is clear: lower oil, calmer nerves and a renewed appetite for risk.
BP and Shell’s shares slide
Shares in oil companies are falling, though – BP and Shell are both down 3.7%, as investors anticipate an end to their earnngs boost from the Iran war.
FTSE 100 index hits eight-week high
Boom! Britain’s stock market has hit a near-two month high at the start of trading, as investors welcome the breakthrough between the US and Iran to end the Middle East conflict.
The FTSE 100 blue-chip share index has jumped by 99 points, or almost 1%, at the start of trading to 10,570 points, its highest level since 21 April.
Engineering firm Rolls-Royce, which makes and services jet engines, is the top riser on the FTSE 100, up 5.5%, followed by British Airways parent company IAG, up 4.8%.
UK house prices dip in June
Gwyn Topham
Two bits of good news for Britons who don’t own their homes have been revealed, with data showing a drop in house prices in June as well as fewer tenants facing rent hikes last month.
Figures from Rightmove showed the average price of property coming on the to market fell by 0.6% or £2,113 to £376,191, the biggest June fall in fourteen years, with prices 0.5% below this time in 2025. The biggest drops were seen in southern England and Wales, and in asking prices for flats rather than houses.
The property site said the number of homes for sale was still at historically high levels for summer, making it more of a buyer’s market. Mortgage affordability has also improved slightly this month, with the average two-year fixed rate deal dropping about 0.1 percentage points to 5.07%, it said.
Meanwhile, figures suggest that the introduction of the Renters Right Act may already be seeing results in terms of keeping rents down for tenants.
The new law came into force at the start of May and means landlords can only increase rents for sitting tenants once a year. According to Hamptons monthly lettings index, the number of tenants who saw their rent rise was down 23% from the same month last year. Hamptons said if the rest of the year saw similar change, it would expect only 31% of sitting tenants to face increases, compared to 40%-50% in previous years.
However, the agency warned that rent rises in Scotland, where landlords have been operating under a similar system for longer, exceeded the national average. Sitting tenants who faced rent rises had an average increase of 5.4% in May, but the figure reached 7.7% in Scotland, albeit for a lower absolute rent – £952 – than the Great Britain average of £1375.
Speaking of the ECB, their president Christine Lagarde has been warning that inflation pressures are spreading in the euro area.
In an intervew with broadcaster France Culture, Lagarde warned that high energy prices are starting to feed through to other parts of the economy, saying:
“Indirect effects of inflation, we have absolutely started to see that more or less everywhere in recent weeks.”
The US-Iran agreement is well-timed for the Bank of England, which is due to set UK interest rates on Thursday.
If the strait of Hormuz does reopen, and oil flows return towards pre-war levels, there will be less inflationary pressure – and thus less need for interest rate rises.
The European Central Bank raised its interest rates last week, but this week is the turn of the BoE, the US Federal Reserve and the Bank of Japan.
Kathleen Brooks, research director at XTB, says:
Over the past month, the price of oil is down by more than a fifth, and the Brent crude price is now back at levels from early March. This is good news for inflation, which should start tumbling monthly from June, and it could ease concerns about price pressures as we lead up to some major central bank action this week. The decline in the oil price also raises questions about whether the ECB was too hasty in raising rates last week.
European stock markets are on track to jump when trading begins, in just over 20 minutes.
Germany’s DAX share index is up 1.65% in the futures market, Reuters reports, with the UK’s FTSE 100 0.75% higher.
The US dollar is weakening, as investors shift into riskier currencies.
The pound is its highest in over a week, at $1.3438.
Markets rally across Asia
There are strong gains across Asia-Pacific markets today, as investors welcome the deal between the US and Iran.
Japan’s Nikkei share index has leapt by 5%, as has South Korea’s KOSPI, while China’s CSI300 index is 1.9% higher.
Jim Reid, market strategist at Deutsche Bank, says:
Whilst the deal is very good news for markets it looks like tough conversations will have occur in the 60-day window to ensure the peace is sustainable. As an example, the Senate needs to approve any extensive sanction relief for Iran.
For now the can kicking exercise has been very well received by markets even after a strong US close on Friday where hopes were raised of a weekend signing
Introduction: Oil falls to three-month low
Good morning, and welcome to our rolling coverage of business, the financial markets, and the world economy.
The peace deal agreed between Iran and the US is sending a wave of relief through the markets today.
Oil has tumbled 4%, and markets across the Asia-Pacific region have jumped, as investors anticipate the reopening of the strait of Hormuz.
Although it is unclear exactly what has been agreed – with the final text of their memorandum of understanding unpublished – Donald Trump’s claim that “oil will flow on both ends again for the region, and the world” is pushing down energy prices – a relief for busineses, consumers, politicians and central bankers alike.
Brent crude has fallen as low as $83.04, its lowest since 10 March, after the prime minister of Pakistan announced the US and Iran will sign a memorandum of understanding in Switzerland on Friday.
That still leaves Brent above its pre-war price of $72.48 a barrel, though.
Trump has indicated that the opening of the strait is contingent upon the signing of the peace deal, scheduled for Friday.
Iran’s Mehr state news, though, reported that the agreed memorandum of understanding calls for the reopening of the strait within 30 days under “Iranian arrangements” – an indication that Tehran hasn’t surrendered its control of the waterway.
Chris Weston of IG points out that there are still obstacles to overcome:
The probable reopening of the Strait of Hormuz later this week would represent a significant positive development. Markets had increasingly questioned how long inventory draws could offset supply disruptions and whether physical dislocations would begin weighing more heavily on risk assets. The focus now shifts towards understanding what normalisation of logistics could realistically look like, and how quickly shipping volumes can return to pre-conflict levels of 120 to 140 commercial vessels transiting eastbound and westbound each day.
There are still obstacles to overcome. Mines may need to be cleared, and there may be structural damage to refineries and export facilities around the region that will take time to repair and come back to pre-conflict capacity.
The agenda
Paying tribute, Sir Keir Starmer said Lord Hattersley “was a giant of the Labour movement”.
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