US-Iran Deal Hopes Fuel Global Market Surge

Global Markets Rally on US-Iran Deal Hopes Global stocks and bonds rallied on Wednesday, May 6, following an report indicating that the United States and Iran are nearing an agreement to end the ongoing conflict. This development led to a significant dip in oil prices and a weakening of the U.S. dollar, while boosting risk assets across major markets.

Europe's broad STOXX 600 index surged by 2.2%, with energy and economy-exposed sectors such as banks and miners experiencing gains, while oil and gas stocks declined. Concurrently, bond markets saw a rally, with yields on benchmark U.S. 10-year Treasury notes falling 6 basis points to 4.35%. European bonds outperformed, as German 10-year yields dropped 7.5 basis points to 2.99%, and rate-sensitive two-year yields decreased by 10 basis points to 2.658%.

The U.S. dollar depreciated against major currencies, with the euro and pound both rising 0.6% to $1.1762 and $1.3618, respectively. The report, which sources could not immediately verify, suggested that the U.S. anticipates Iranian responses on several key points within 48 hours, noting that while nothing is finalized, this represents the closest the parties have been to an agreement since the conflict began.