Matt Britzman, senior equity analyst at Hargreaves Lansdown, said: “Global equity markets are starting the week firmly on the front foot, with futures pointing to positive opens across the board after President Trump announced that a deal with Iran had been reached.
“The move has given investors a clear reason to dial back some of the geopolitical risk premium that has hung over markets, especially as the Strait of Hormuz is expected to reopen and oil prices move sharply lower.
“Energy prices have been one of the clearest transmission channels from Middle East tensions into inflation, bond yields and equity sentiment, and there is likely to be a concerted effort to get prices down even further once this deal is finalised.
“There are still details to be ironed out before markets can fully trust the agreement, but for now the direction of travel is clear: lower oil, calmer nerves and a renewed appetite for risk.
“Oil prices have taken another leg lower, but this hasn’t come completely out of the blue.
“Oil has been sliding for much of the past month, a sign that markets had already started to price in a decent chance of a breakthrough between the US and Iran before President Trump’s latest announcement.
“The confirmation of a deal has still added fresh downward pressure, with traders now looking for evidence that the Strait of Hormuz reopens smoothly and energy flows return to something closer to normal.”
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