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Oil prices slid, stocks and bonds surged, while the safe-haven dollar was knocked back on Wednesday, as \u200ba two-week Middle East ceasefire<\/a> brought some relief to markets on hopes for a resumption of oil and gas flows through the Strait of Hormuz.<\/p>\n The news capped \u200cweeks of market volatility and geopolitical upheaval after US and Israeli strikes on Iran at the end of February pushed tensions to the brink, with Tehran effectively choking off the strategic waterway that typically carries about 20 per cent of the world\u2019s energy supplies.<\/p>\n US President Donald Trump agreed to the ceasefire less than two hours before his deadline for Iran to reopen the strait or face \u200bdevastating attacks on its civilian infrastructure.<\/p>\n Market reaction was swift and dramatic, with US crude futures down around 15pc to $96.31 a barrel, while Brent \u200bfutures also slid 13pc to $94.71 per barrel.<\/p>\n S&P 500 futures rose 2.5pc, while European futures leapt more than 5pc. US Treasuries rallied \u2060while futures for German Bunds and French OATs surged.<\/p>\n The US dollar fell broadly, having been the haven of choice during the tumult.<\/p>\n In Asia, Japan\u2019s Nikkei jumped about 5pc \u200bwhile South Korea\u2019s KOSPI vaulted 6pc, triggering a brief halt in trading. That left the MSCI\u2019s broadest index of Asia-Pacific shares outside Japan up 4pc.<\/p>\n \u201cWhen you factor in that \u200bthe two-week delay is longer than the original 10-day window set for the initial attack, it seems plausible that the worst of the conflict may now be behind us,\u201d said Matt Simpson, a senior market analyst at StoneX.<\/p>\n \u201cMarkets can worry about the complexities later. For now, they\u2019ve been given the green light to rally.\u201d<\/p>\n The six-week conflict had \u200bsent oil prices soaring, reignited inflation fears and thrown the global rates outlook into disarray, forcing governments and companies to scramble for cover against a \u200bsudden energy shock.<\/p>\n Trump\u2019s social media announcement on the ceasefire marked an abrupt reversal from hours earlier, when he issued an extraordinary warning that \u201ca whole civilization will die tonight\u201d unless \u200chis demands \u2060were met.<\/p>\n Beyond the immediate relief, investors remain keen to see whether the ceasefire leads to a broader resolution before placing major bets.<\/p>\n \u201cDoes it mean people are going to take new risks? No, it doesn\u2019t,\u201d said Martin Whetton, head of financial markets strategy at Westpac.<\/p>\n \u201cIt would have to actually be a lasting peace (to change things). People aren\u2019t actually taking risk.\u201d<\/p>\n Gold prices climbed 2.5pc to $4,820 per ounce.<\/p>\n In currencies, the risk-sensitive Australian dollar rose 1.4pc to $0.7074 and the euro gained 0.8pc to $1.1687.<\/p>\n The dollar index eased to 98.835, \u200bhovering near a one-month low.<\/p>\n Meanwhile, New Zealand\u2019s central \u200bbank kept its policy rate unchanged, as \u2060expected, buying time to assess the fallout from the war but signalling it would act decisively if inflation heats up.<\/p>\n The comments underscore the challenge facing global central banks as the energy price and supply chain shocks from the war \u200btake time to normalize, leaving price pressures intact.<\/p>\n Some analysts are also sceptical that the ceasefire will translate into lasting peace, warning \u200bof likely twists \u2060and turns ahead.<\/p>\n Carol Kong, a currency strategist at Commonwealth Bank of Australia, said the conflict\u2019s root causes remain unresolved, keeping the risk of re\u2011escalation firmly intact.<\/p>\n \u201cWe maintain our view that the war will run into June. The implication is dollar losses may prove short-lived.\u201d<\/p>\n US Treasuries surged after the announcement, with traders putting the prospect of rate \u2060cuts from the \u200bFederal Reserve later in the year back on the table, although doubts about whether oil prices \u200bwill go back to pre-war levels kept enthusiasm in check.<\/p>\n The yield on the benchmark US 10-year Treasury note dropped 10 basis points to 4.241pc, the lowest since mid-March.<\/p>\n The yield on monetary \u200bpolicy-sensitive US 2-year Treasury notes sank 10.7 bps to 3.725pc.<\/p>\n<\/a>Two weeks of relief<\/h2>\n