Oil Price Plunges 10% as Iran-US Ceasefire Holds

The recent agreement between the US and Iran to cease hostilities has significantly reduced geopolitical risk premiums in financial markets, leading to a sharp decline in oil prices. The Brent crude oil price has fallen by 10% and is now trading at $86 per barrel.

This development has boosted risk sentiment, with equity index futures rising sharply, particularly the Nasdaq, which is predicted to rise 1.5% today as key earnings releases approach.

The falling oil price has also put downward pressure on yields, with the UK 10-Year yield lower by 13bps this morning. Asian equities rose overnight, led by chip makers such as SK Hynix, up 1.5%.

The US Federal Reserve's (Fed) decision to keep interest rates steady is expected to be a key event for financial markets this week, particularly given the recent shift in market expectations following the Iran-US ceasefire.