US-Iran Ceasefire Sparks Global Market Rally Amid Caution

Global markets rallied on Monday after the US and Iran suspended military strikes over the weekend. The move sparked a massive unwinding of safe-haven trades, with Brent crude plummeting more than 7% intraday to briefly dip below $90 per barrel.

The ceasefire led to a surge in equities, with Japan's Nikkei 225 Index rising 0.2% and the Nasdaq 100 futures climbing over 1%. US Treasury prices also rose, pushing yields lower, while the dollar weakened across the board.

However, analysts remain cautious about the durability of the ceasefire, citing concerns that it may not be a lasting de-escalation until there is tangible evidence, such as the resumption of traffic through the Strait of Hormuz. Data from Kpler indicates that fewer than 10 commodity vessels per day transited the strait over the weekend.

This week marks a central bank super week, with the Federal Reserve, Bank of England, and Bank of Japan set to announce interest rate decisions. Earnings from tech giants including Microsoft, Meta, Apple, and Amazon will also flood in, with the return on massive AI capital expenditure emerging as a core market concern.