A positive trend is observed in European stock markets due to the increasing global risk appetite following the ceasefire between the USA and Iran in the Middle East.
The geopolitical tension that started in the Middle East after the US and Israel’s attacks on Iran decreased after the parties agreed on a ceasefire in the 6th week of the war. Following the news of the ceasefire, sharp movements in asset prices are noted, and a “ceasefire rally” is taking place in the stock markets.
Stating that he accepted Pakistan’s proposal to stop possible attacks tonight and open the Strait of Hormuz, US President Donald Trump said, “I agree to suspend bombardments and attacks against Iran for a period of two weeks. This will be a bilateral ceasefire.” he said.
In the statement made by the Iranian administration, it was announced that the negotiations to be held in Pakistan to end the war with the USA and Israel are aimed to be concluded within the 15-day ceasefire period.
Iranian Foreign Minister Abbas Erakchi said in his statement that safe passage through the Strait of Hormuz for 15 days will be possible in coordination with the Iranian army.
As of 10.15 in European markets, the Stoxx Europe 600 indicator index is trading at 611.7 points, with an increase of 3.6 percent, and the FTSE 100 index in the UK is trading at 10,599 points, with an increase of 2.4 percent.
In Germany, the DAX 40 index is at 24,018 points with a 4.7 percent premium, in Italy the FTSE MIB 30 index is at 47,148 points with a 3.8 percent gain, in France the CAC 40 index is at 8,175 points with a 3.4 percent increase, and in Spain the IBEX 35 index is at 18,074 points with a 3.6 percent gain.
– The decline in oil prices exceeded 10 percent
Following the statements that a ceasefire has been reached to end the conflicts in the Middle East and that safe passage through the Strait of Hormuz can be ensured, oil prices are experiencing sharp declines.
While the barrel price of Brent oil is sold at $92.5 with a decrease of 10.2 percent, the barrel price of West Texas Intermediate (WTI) crude oil is sold at $90.1 with a decrease of 11.4 percent.
While the expectation of a decline in energy prices following the news of the ceasefire reduced concerns about global inflation, the sharp declines in energy prices and the increasing global risk appetite were reflected in the European markets.
Developments regarding energy supply and energy prices in the region continue to be closely followed. In her statement yesterday, European Union (EU) Commission Spokesperson Anna-Kaisa Itkonen stated that they are constantly monitoring the situation regarding fuel supply and that this is done in very close cooperation with member countries.
Itkonen pointed out that the Oil Coordination Group will meet today and the Gas Coordination Group will meet tomorrow.
Analysts stated that the Producer Price Index (PPI) in the Eurozone and the minutes of the last meeting of the US Federal Reserve (Fed) will be followed abroad for the rest of the day.
