Senior US official says:
- U.S. has signed MOU with Iran
- Trump, Vance signed MOU, so did Iranian parliamentary speaker
- Deal provides for immediate opening of Strait of Hormuz and lifting of U.S. blockade on Iran
- There will be significant increase in traffic in Strait starting already
- U.S. has signed MOU with Iran
- Details of agreement will be put out within next 24-48 hours
- Going to launch technical discussions later this week
- Relief of frozen funds, sanctions relief tied to performance
- Plan is to keep current U.S. military force posture during next phase of negotiation
- Agreement is to contemplate reduction military forces upon the agreement of a final deal
- We were unhappy with the job the Omanis did during negotiations before war
- Sanctions relief not tied to any particular conduct, but to Iran acting appropriately to sign and negotiate
- U.S. prepared to release frozen funds and relieve sanctions; may do some small gestures at beginning
- U.S. wants to see Iran taking verifiable and irreversible steps
- Israel’s withdrawal from Lebanon is not a condition of the deal
- Israel will have right to defend itself from Hezbollah attacks
- Sanctions relief not tied to any particular conduct, but to Iran acting appropriately to sign and negotiate
- US prepared to releasing frozen funds and relieve sanctions. May do small gestures at beginning.
- US wants to see Iran taking verifiable and irreversible steps.
- Israel’s withdrawal from Lebanon is not a condition of the deal.
- Israel have right to defend itself from Hezbollah attacks.
Meanwhile Trump is also speaking and says:
- The deal’s all signed
- Strait all opened.
- Completely opened on Friday.
- MOU with Iran is explicit that Strait of Hormuz will be open toll-free for 60 days.
- Important that oil is plummeting and stocks are rising.
- Iran will not have a nuclear weapon.
- There will be a strong policing of the deals.
- Hopefully there will be good relationships going forward.
- Text on MOU will come sometime in the very near future.
- No sanctions relief from Iran until they do what they are supposed to do.
- Iran, allies don’t think we are going to need much help but not a bad idea.
- Do want to see if we can straighten out Lebanon.
On a aside, Trump on the war in Ukraine:
- Had good conversation with Zelinski, Putin.
- Going to see if we can do something, both leaders seem open.
The latest comments from Pres. Trump and U.S. officials add some detail around the framework agreement with Iran, but they do not materially change the market narrative that has been driving price action throughout the day. The key themes remain the reopening of the Strait of Hormuz, the signing of a memorandum of understanding between the U.S. and Iran, and the prospect of sanctions relief tied to Iranian compliance. Officials emphasized that any easing of sanctions will be performance-based and that the U.S. will maintain its current military posture while technical negotiations continue. They also reiterated that Israel retains the right to defend itself and that any broader agreement will require verifiable and irreversible steps from Iran.
For markets, the takeaway remains largely risk-positive. The reduction in geopolitical uncertainty and the prospect of increased oil flows have helped keep pressure on crude prices while supporting equities. U.S. stocks extended gains following the headlines, with the Nasdaq now up nearly 3% and the S&P 500 advancing close to 2%, as investors continue to embrace a more optimistic outlook on global growth and inflation risks in the wake of the agreement.
Meanwhile, crude oil prices are down $4.75 on the day to $80.14, although they have rebounded modestly from the session low of $79.70 as traders continue to unwind some of the geopolitical premium following the U.S.-Iran agreement headlines.
U.S. Treasury yields are also lower, reflecting a more risk-friendly backdrop and reduced inflation concerns tied to energy prices. The 2-year yield is down 4 basis points at 4.045%, but remains above the key 4.00% level. The 10-year yield is down 2.6 basis points at 4.459%.
In precious metals, gold is benefiting from the weaker yield environment, rising $124 or 2.95% to $4,344. Despite the strong gain, the price remains below its 200-day moving average at $4,428.31, leaving longer-term sellers with a technical edge. Silver is outperforming, up $2.33 or 3.44% at $70.35
