Morning Report

Morning Report PDF (PDF 269KB)

Key themes:

• Ahead of today's deadline for Iran to accept the ceasefire deal and open the Strait of Hormuz, Trump threatened that "a whole civilisation will die tonight, never to be brought back again".
• Pakistan, which is mediating the US-Iran negotiations requested a two-week extension for further talks. Hopes for a diplomatic resolution to the conflict supported the risk-on sentiment in financial markets.
• US equities recovered earlier losses, with the S&P500 closing little changed. US Treasuries rallied, with yields heading 2-7bp lower. The AUD was among the top performers, rising 0.8% to 0.6970.
• With several different war scenarios in the Middle East remaining likely, oil prices were mixed, but the Dated Brent - a benchmark used in the physical market for more immediate delivery - surged to a new record higher reflecting the lack of supply.