Hormuz Hopes Boost Global Markets Amid Ongoing Inflation Concerns

Global markets are showing signs of optimism as Iran and Oman discussed a joint temporary navigational corridor through the Strait of Hormuz, potentially alleviating nearly six-month US-imposed disruptions that fueled global inflation concerns.

Brent crude futures dropped nearly 3% to $85.95 a barrel on expectations that more oil could move through the Strait, which handled a fifth of the world's traded oil before the war.

The decline in oil prices pushed short-term bond yields lower as investors reassessed central bank interest rates, with the yield on two-year German bonds falling for a second day to 2.771%, a more than one-week low.

Markets are now awaiting the US Personal Consumption Expenditures Price Index, due at 1230 GMT, which could help investors gauge the Federal Reserve's monetary policy trajectory for the rest of the year.