Prospects of an Iran war deal and reopening of the Strait of Hormuz prompted risk-on sentiment on Monday, sending Tokyo and Taipei stocks to record highs while oil and the dollar fell.
But US President Donald Trump dampened hopes of an imminent breakthrough, telling his representatives not to rush. With UK and US markets closed for holidays, liquidity is thin.
The will-they-won't-they saga leaves investors jittery but the consensus is that a deal is a matter of when, not if.
Shipping data showed two LNG tankers exiting the Strait of Hormuz, while an Iraqi crude supertanker left the Gulf after three months stranded. Still, oil prices won't return to pre-war levels, inflation worries persist, and rate cuts are off the table.
Traders now fully price in a 25-bps Fed rate hike in January 2027.
