Markets Await Iran Agreement, Though Analysts Warn Against Excessive Optimism

Global markets are rising in expectations that a possible agreement between the US and Iran could lead to the reopening of the Strait of Hormuz, which would reduce one of the main geopolitical risks of recent months.

US President Donald Trump stated that an agreement with Iran is "largely already agreed upon," and according to media reports, a possible agreement would also include the opening of the Strait of Hormuz.

These expectations increased demand for equities and currencies, though later Trump noted that expectations for a rapid breakthrough could be exaggerated.

Analytics firm Capital Economics believes that if an agreement actually materializes, the expected "rally" in markets could prove much weaker than investors anticipate.

According to Thomas Mathieu's assessment, investors already demonstrated high resilience during the conflict period, which has reduced the scope for a large-scale recovery of assets.

According to analysts, the Japanese yen could emerge as one of possible beneficiaries, as energy-import-dependent economies were particularly hurt by rising oil prices.

Capital Economics notes that even in the event of the strait opening, oil and gas prices would not quickly return to pre-war levels, which would continue to maintain inflation risks.

At the same time, due to high energy prices and inflation, expectations for interest rate cuts from central banks have already been postponed. Consequently, a strong recovery in the bond market is also less likely.

Analysts also note that future growth in the stock market will depend more on the growth of corporate profits, particularly in the technology sector, rather than solely on the reduction of geopolitical risks.