US-Iran Halt Strikes Boost Market Sentiment Ahead of Fed Decision

The US and Iran's decision to halt military strikes has boosted market sentiment, making it a risk-positive start to Fed week. The pause in operations has given investors cause for optimism, with crude oil prices declining sharply as a result. The barrel of West Texas Intermediate (WTI) is now trading below $64, down more than 6% on the day.

The US economic calendar will feature Durable Goods Orders and the Federal Reserve Bank of Dallas' Manufacturing Business Index in the second half of the day. Analysts at ING caution that while the recent pause in US-Iran strikes marks 'the first tangible signal of de-escalation,' the underlying drivers are 'less clear.' The easing in tensions has not led to any meaningful pickup in vessel flows through the Strait of Hormuz.

The Euro (EUR) has opened with a bullish gap and is trading at around 1.1400, while the Pound (GBP) holds its ground near 1.3350. Gold (XAU/USD) gains traction on Monday, rising about 1% on the day, and the US Dollar Index is down more than 0.2% near 101.20.