Oil tankers are moving again, stocks are soaring, and the dollar just got a fresh jolt from the Fed.
Japan’s Nikkei closed at a record for the fifth session in a row on Friday, up 0.8% and 8.5% for the week. South Korea’s Kospi did even better, jumping 3.1% on the day and 15.3% over the week. The rally followed news that tankers had started moving through the Strait of Hormuz again after the U.S. lifted its blockade on Iran, part of an interim deal ending a three-month war.
Key Details
Brent crude dropped 1% to $79.03 a barrel, down 9.5% on the week. Analysts warn the relief may be temporary – Iran and Oman will control the strait going forward, and toll-free transit is only guaranteed for 60 days. One geo-economics analyst flagged the risk of Iran eventually charging a “maritime service” fee.
Mainland China, Hong Kong, and Taiwan were closed for the Dragon Boat Festival.
Market Reaction
The dollar index is on track for a 1% weekly gain, sitting at 100.78. The yen slid to 161.26 per dollar, its weakest in two years, raising fresh questions about whether Tokyo will step in. The pound slipped to $1.3195 after the Bank of England held rates in a 7-2 vote. Gold fell 0.5% to $4,188 an ounce; silver dropped 0.8% to $65.30.
Why It Matters
Nine of the Fed’s 19 officials now expect at least one more rate hike this year, even with rates held steady this week. New Fed Chair Kevin Warsh reaffirmed his focus on price stability, pushing short-term Treasury yields higher while longer-dated bonds rallied on falling oil and steady policy.
What to Watch
Keep an eye on yen intervention signals and whether Iran moves to monetize control of the strait once the 60-day window closes.
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Source: Reuters
Time: 11:40 AM EEST
