MCO Morning Wrap | Iran Deal Reopens Hormuz, the War Premium Drains Out

Good morning. The US and Iran reached a deal to end the fighting and reopen the Strait of Hormuz, and the war premium is draining out of everything. Oil down hard, stocks up, volatility crushed. Risk-on across the board.

Crude is where the move is cleanest. Brent down about 5 percent near 83.50 dollars, WTI back near 80. The draft runs 14 points, includes lifting oil sanctions, and commits Tehran to reopening Hormuz within 30 days. Twenty percent of global oil flow stops being a daily headline risk, at least on paper.

Europe is leaning into it. The DAX closed Friday at 24,635, up 1.76 percent, and futures point higher again into the open. Cheaper oil is pure oxygen for European industrials and the inflation picture. The broad Euro Stoxx 50 is up around 1.4 percent.

US futures are flying. Nasdaq futures up 2 percent near 30,552, S&P futures up 1.3 percent, Dow futures up 0.85 percent around 52,043. Tech leads, because that's what tech does when oil and rate fears fade together. The VIX got cut down to 16.80, off almost 14 percent.

Asia got there first. The Nikkei closed at a record 69,317, up almost 5 percent. Hang Seng added 0.37 percent to 24,808.

Crypto joined in, just quieter. Bitcoin near 65,800 dollars, up about 2 percent. Ether around 1,720, up a touch more. And gold, which should fade on a peace deal, is still bid. Up 2.8 percent near 4,355, third session higher. Different trade, same buyers. The structural gold story doesn't care much about one ceasefire.

On data, Empire State manufacturing lands this morning, last read 19.60. The bigger event is midweek. The Fed meets Tuesday and Wednesday, Kevin Warsh's first meeting in the chair, with the decision Wednesday. Retail sales Tuesday. And the week is short, markets closed Friday for Juneteenth.

The risk now is the obvious one. A deal that looks signed on Monday can look shaky by Thursday, and oil knows it. For today the relief trade has the wheel.

Let's see how it holds.