Global markets shifted into a stronger risk-on mood after President Trump announced that the United States would suspend its naval escort operations in the Strait of Hormuz. The move, reportedly encouraged by Pakistan and several other countries, was interpreted as an attempt to give negotiations more time and reduce tensions in the region. Oil prices reacted sharply, with front-month crude contracts dropping between 8% and 10%, easing pressure on bond yields and supporting equities worldwide. The US dollar weakened broadly, while gold and silver rebounded alongside lower Treasury yields and improving investor sentiment.

Asia Pacific Markets

Asia Pacific markets rallied strongly as lower energy prices and expectations of de-escalation boosted appetite for risk assets. South Korea’s Kospi surged more than 6%, leading regional gains, while China’s CSI 300 and India’s Sensex advanced over 1%. Currency markets were volatile, especially in Japan, where speculation of another official intervention intensified after the dollar suddenly plunged from near JPY158 to the JPY155 area during thin holiday trading. The Australian dollar climbed to its highest level since mid-2022 after the recent rate increase by the Reserve Bank of Australia, while the Chinese yuan strengthened as the PBOC fixed the reference rate at a fresh multiyear low for the US dollar.

European Markets

European assets advanced sharply as falling oil prices reduced inflation fears and encouraged buying across both equities and bonds. The Stoxx 600 gained more than 2%, putting it on course for its strongest daily rise in over a month. Government bonds rallied across the region, with benchmark yields dropping between 7 and 12 basis points. In currency trading, the euro climbed toward the upper end of its recent range as traders viewed the US decision on naval escorts as a sign of possible de-escalation, despite the continued blockade of Iranian ports. Meanwhile, eurozone services and composite PMIs remained below the 50 threshold, although producer prices rebounded in March.

American Markets

US markets extended their positive momentum after major equity indices, including the S&P 500 and Nasdaq, reached record highs in the previous session. Futures pointed to additional gains as investors welcomed the decline in oil prices and lower Treasury yields. The 10-year Treasury yield slipped toward 4.34%, while the 30-year yield moved back below 4.93%. In commodities, June WTI crude collapsed from above $102 to near $92.50, marking a two-week low. Attention now turns to the ADP private employment report and the Treasury’s quarterly refunding announcement, while traders continue to assess expectations for Federal Reserve policy and future debt issuance plans.