US-Iran deal reopens Strait of Hormuz and oil erases conflict gains as rate concerns linger
This week @ 15:16 pm Friday 19th June in London.
Markets:
- FTSE 100 fell 0.92% this week to 10,375.77, as energy and mining stocks declined sharply on falling oil and commodity prices, offsetting gains in rate-sensitive sectors following the Bank of England’s hold decision.
- S&P 500 rose 0.93% this week to 7,500.58, as optimism surrounding the US-Iran peace deal and reopening of the Strait of Hormuz outweighed the hawkish signal from the Federal Reserve’s updated dot plot.
- Nasdaq Composite rose 2.43% this week to 26,517.93, led by semiconductor and technology stocks, with chip names rallying after President Trump announced Intel will work alongside Apple on domestic semiconductor production.
- Euro Stoxx 50 rose 1.00% this week to 5,341.03, as falling energy prices eased input cost pressures on European corporates and geopolitical risk premiums declined following the Iran deal announcement.
Bonds:
- UK 10-year gilt yields fell 11.8bps this week to 4.747%, as the US-Iran deal drove oil prices sharply lower, easing UK inflation expectations, while the Bank of England voted 7-2 to hold Bank Rate at 3.75% and concerns over political risk to Keir Starmer’s government also eased.
- US 10-year Treasury yields fell 2.5bps this week to 4.4538%, with modest relief from the Iran deal partially offset by a hawkish Federal Reserve dot plot that raised the median 2026 rate projection to 3.8%, signalling a possible hike before year-end.
Commodities:
- Brent crude fell 8.83% this week to $79.62/bbl, falling sharply as the US-Iran interim peace agreement opened the Strait of Hormuz to commercial shipping for the first time since the conflict began.
- Gold fell 1.45% this week to $4,177.30/oz, as a hawkish Federal Reserve dot plot raised the opportunity cost of holding the non-yielding metal, while oil-driven safe-haven demand eased on the Iran deal.
- Copper fell 1.46% this week to $6.35/lb, as the prospect of lower energy prices reduced inflationary pressure on industrial demand, though longer-term supply tightness continues to underpin the metal.
FX:
- GBP/USD fell 1.50% this week to 1.3205, sliding to its lowest level since late March as UK political uncertainty resurfaced following Andy Burnham’s strong showing in the Makerfield by-election, compounding the impact of the Bank of England’s hold and the Fed’s more hawkish stance.
- GBP/EUR fell 0.57% this week to 1.1524, as the euro benefited from improving eurozone risk sentiment on lower energy prices, narrowing sterling’s relative advantage.
Macro:
- US-Iran deal: The US and Iran reached an initial agreement to extend the ceasefire for 60 days and reopen the Strait of Hormuz, with a formal signing ceremony set for Geneva on 19 June.
- UK CPI (May): Headline inflation held at 2.8% year-on-year, unchanged from April and below the 3.0% market forecast, its lowest reading since March 2025.
- Bank of England: MPC voted 7-2 to hold Bank Rate at 3.75%, with two members voting for an immediate increase to 4%. T
- Federal Reserve: FOMC voted 12-0 to hold the federal funds rate at 3.50%-3.75% in Kevin Warsh’s first meeting as Fed Chair.
Company news:
- Take-Two Interactive: Shares rose approximately 5% on Thursday after Rockstar Games confirmed that Grand Theft Auto VI preorders will open on 25 June, ahead of the planned 19 November 2026 console release.
What we will be keeping an eye on next week…
w/c 22nd June 2026
- Tuesday 23 June: Flash PMIs for the US, UK, and Eurozone (S&P Global).
- Thursday 25 June: US core PCE price index (May), the Fed’s preferred inflation measure, alongside final Q1 GDP and durable goods orders.
- Fed Chair Kevin Warsh testimony: Markets will parse Warsh’s congressional appearances (scheduled mid-week) for further guidance on the pace and timing of potential rate hikes following Wednesday’s hawkish pivot.
Enjoy the weekend.
Markets move constantly and the numbers in this update will change. This is a snapshot only, pulled together from a range of sources, and is meant as a quick guide rather than a precise record. It’s not investment advice and shouldn’t be used to make trading or investment decisions. If you need more accurate or specific data over a defined period, please get in touch with a member of the team who will be happy to help.
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