US-Iran Schrödinger’s cat deal: signed and unsigned at once. Where are we at?Markets surge as Trump announces deal with IranBreaking: Trump cancels scheduled attacks on Iran today, says there is an agreementUS sells 30-year bonds at 5.020% vs 5.008% WIUS 30 year fixed-rate mortgage averages 6.52% up from 6.48% last weekECB sources report: Policymakers see July pause if energy prices stay where they areWorld Bank cuts 2026 global GDP growth to 2.5% from 2.6%ECB’s Lagarde: Risks to the growth outlook are to the downsideTrump says Iran will be hit hard and “at some point” the US will take Kharg IslandCanada building permits for April -7.6% versus -3.5% estimateUS Initial jobless claims 229K vs 219K estimate. Continuing Claims 1.795M vs 1.780M est.US May PPI +6.5% y/y vs +6.4% expectedECB hikes rates, as expected
Risk sentiment surged on Thursday after Trump cancelled planned strikes on Iran, citing a near-complete deal with Tehran and a possible signing in Europe this weekend. Equities rallied hard, led by cyclicals and tech, while energy was the lone sector in the red. Oracle bucked the broader rally, sliding over 8% on its USD 40bln equity raise following weak capex guidance.
Crude bore the brunt of the de-escalation, reversing earlier gains to settle sharply lower, which in turn fuelled a broad Treasury rally. Yields fell 8-10bps across the curve, led by the belly, as traders unwound inflation premiums tied to the conflict. Markets now price just 18.5bps of hikes by year-end, a 74% chance.
The USD softened broadly on the improved risk tone, with AUD and NZD outperforming on the constructive backdrop, while CAD lagged on crude’s slide.
US PPI added a wrinkle: headline rose 1.1% m/m (exp. +0.7%, prior +1.4%) and 6.5% y/y (exp. +6.4%), but core cooled to 4.9% y/y (exp. +5.3%, prior +5.2%). Supercore reaccelerated to 5.1% y/y, a reminder underlying pressures haven’t fully faded. Jobless claims ticked up to 229k (exp. 219k, prior 225k).
A weak 30-year auction, tailing 1.2bps with soft indirect demand, underscored lingering caution on duration even with yields near 5%. Iran’s Supreme Leader sign-off remains the key swing factor heading into the weekend.
Another deal, this time for sure?
This article was written by Eamonn Sheridan at investinglive.com.