US-Iran Tensions Ease Amid Optimism Over Strait of Hormuz Deal
Risk appetite improved during the session, despite rate hike expectations weighing on Australia's ASX 200. Sentiment was cautious ahead of Nvidia earnings and Jackson Hole.
Oil FUTs and bond yields dropped on Iran-related headlines. The US reportedly offered to halt the 'siege' and lift sanctions on Iran in exchange for reopening the Strait of Hormuz and ending proxy attacks. Iran and Oman Foreign Ministers discussed a phased framework to provide a practical basis for resuming safe navigation through the Strait.
A proposed framework includes joint mine-clearing and future management of the Strait of Hormuz. US Secretary of State Rubio reportedly informed foreign counterparts that 'for the time being' the US is not expected to initiate new strikes against Iran, shifting strategy from strikes to sanctions. The US may return diplomats to the Mideast as soon as this week.