Asia-Pacific stock markets and precious metals all rose across the board, while oil prices plummeted.

Amid the bullish news of a ceasefire between the US, Iran, and Israel, all major Asia-Pacific and European and American stock market futures surged today, precious metals markets continued their upward trend, and crude oil markets plummeted. Analysts believe that the market may readjust expectations, with the likelihood of the Federal Reserve cutting interest rates being somewhat higher than current market expectations.

Boosted by the ceasefire news between the US, Iran, and Israel, global capital market risk appetite significantly rebounded, with all Asia-Pacific and European and American stock market futures rising sharply. Among them, the MSCI Asia-Pacific Index rose 4% during the session to 246.42 points.

Asian stock markets rise

As of press time, the Hang Seng Index increased by 2.69%, the Shenzhen Component Index rose 3.6%, the ChiNext Index gained 4.53%, and the Shanghai Composite Index increased by 1.83%.

In Japan, the Nikkei 225 Index quickly surged after opening, rising 4.9% to 56,078 points as of press time.

The Korean market performed even more strongly, with the Korea Composite Stock Price Index (KOSPI) soaring as much as 6.2%, leading Asian markets, and rising for the fourth consecutive trading day. Chip giants Samsung Electronics and SK Hynix both gained over 9%. After a 5% increase in KOSPI 200 futures, the index circuit breaker was triggered, halting trading for 5 minutes.

The Korean won appreciated against the dollar by as much as 1.9%. The 10-year Korean government bond futures rose by 120 basis points, while the 3-year bond yield fell to 3.3%, due to falling oil prices easing inflation pressures and reducing market expectations for rate hikes by the Bank of Korea.

Oil prices may stay around $90

Driven by the bullish ceasefire news, precious metals markets continued their upward trend. Spot gold prices increased nearly 3% intraday, rising above $4,835; silver surged 5.33% to $76.81; platinum and palladium also followed higher.

The oil market crashed, with Brent crude futures opening down 15%, currently trading at $95 per barrel; WTI crude futures are at $71 per barrel.

Bloomberg pointed out that as tensions eased, trading volume surged. In the first hour of trading of the global benchmark, about 240k Brent crude contracts changed hands, whereas a typical trading session might only see a few thousand contracts during that period.

Hiroyuki Ueno, Chief Strategist at Sumitomo Mitsui Trust Asset Management, said, “This is a relief for the market. Things have calmed down now. Iran has actually come to the negotiating table, which is a step forward. Now there’s a feeling that high oil prices won’t last much longer.”

However, Andrew Lilley, Chief Rate Strategist at Barrenjoey, warned that there is still a long way to go to return to pre-war levels. He believes the market is currently uncertain whether oil prices can fall back to the $75 range.

“The current dilemma is that although the recovery in crude oil liquidity alleviates the urgent need, due to infrastructure damage, oil prices may stay at an equilibrium of around $90.”

Probability of US rate cuts increases

In the forex market, the dollar weakened, with the dollar index falling 0.6%; the euro rose to 1.1677 against the dollar, and the yen appreciated to 158.71 per dollar.

The yield on the 2-year US Treasury fell 7 basis points to 3.72%, and the 10-year Treasury yield declined 4 basis points to 4.26%.

In March this year, Middle East conflicts caused oil prices to surge, intensifying concerns about accelerating global inflation, and US Treasuries experienced their largest decline since October 2024. Although there was a rebound afterward, the gains were limited as investors continued to wait for signs of peace in the Middle East.

Ken Kranpton, Head of Rate Strategy at National Australia Bank, said, “The market may readjust expectations, thinking that the likelihood of a Fed rate cut is somewhat higher than current market expectations.”

Currently, overnight index swaps indicate that the market prices in about a 60% chance of a rate cut by the Fed before the end of the year, whereas earlier this week, that probability was nearly zero.