Markets cheer U.S.-Iran agreement, but some investors caution deal is yet to be signed

• Oil prices tumbled sharply with WTI down 4.77% to $80.83 per barrel and Brent falling 4% to $83.77, while Asian equities surged with South Korea's Kospi jumping 5.1% and Japan's Nikkei climbing 3.6%
• Gold held near $4,300 per ounce despite the risk-on environment, suggesting markets are not fully trusting the unsigned deal, which remains subject to implementation challenges including damaged infrastructure and sea mines
• Lower oil prices are expected to ease inflation pressures on central banks, with analysts projecting Brent could fall to around $80 per barrel by year-end if the Strait of Hormuz remains open and exports recover to 60-70% of pre-war levels

Summary: Markets Rally on U.S.-Iran Peace Deal as Oil Prices Plunge

Key Developments:

Asian markets surged Monday following a U.S.-Iran peace agreement aimed at ending nearly four months of conflict. However, investors remain cautious as the deal awaits formal signing on June 19th.

Market Reactions:

*Equities:* Asian stocks rallied strongly with South Korea's Kospi jumping 5.1%, Japan's Nikkei 225 climbing 3.6%, and Australia's S&P/ASX 200 gaining 1.3%.

*Energy:* Oil prices tumbled over 4%, with WTI crude falling 4.77% to $80.83/barrel and Brent crude declining 4% to $83.77/barrel. The agreement includes reopening the Strait of Hormuz and lifting the U.S. naval blockade.

*Bonds & Currency:* The U.S. 10-year Treasury yield fell 5 basis points to 4.423%, while the dollar index weakened 0.32% to 99.483, reflecting reduced inflation concerns.

*Safe Havens:* Gold rose nearly 2% to $4,302.19/ounce, signaling lingering market skepticism about deal implementation.

Analyst Perspectives:

Experts note markets are unwinding geopolitical risk premiums built since February. Commonwealth Bank of Australia projects Brent crude could fall to $80/barrel by year-end if the Strait remains open, though risks include refining infrastructure damage, sea mines, and uncertain tanker traffic recovery.

Key Implications:

Lower oil prices ease inflation pressures and reduce urgency for central bank tightening, with analysts describing the outlook as "constructive" for global investors. However, uncertainty remains as the deal is unsigned and details are limited, with markets requiring only 60-70% recovery of pre-war oil flows to restore supply surplus expectations.