Today's Edition
LONDON (REUTERS)
The price of oil tumbled and stocks and government bonds rallied on Friday after the Strait of Hormuz was opened for passage amid a ceasefire.
The price of benchmark Brent crude futures tumbled to $90 a barrel, down 9% on the day, US crude fell 10% to $81.5 a barrel.
While still above pre-war levels, the prices are down significantly from late March's highs, which, for Brent, were close to $120 a barrel.
Stocks around the world, which had already been trading around record highs, jumped further on the news. Europe's broad STOXX 600 was last up 1.3% having been close to flat before the announcement, S&P futures were 0.9% higher.
Government bonds also rallied, with the benchmark 10-year Treasury yield dropping 7 basis points to 4.23%, its lowest since mid March. Unlike stocks, which had already regained their pre-war highs in the United States and many other markets, bonds have yet to do so.
European bonds have sold off more than US ones since the war began as the impact of higher energy prices had traders rushing in to price rate hikes from the European Central Bank and Bank of England. On Friday, they were outperforming as those rate cut bets were pared back.
Germany's 10-year yield fell 8 basis points to 2.96%, while the rate sensitive two-year yield fell 10 bps to 2.42%. Britain's two-year yield fell 15 bps to 4.10%.
The dollar also slid, falling 0.6% to 158 yen, while the euro was up 0.6% at $1.1848, a two-month high.
