A two-week ceasefire agreement between the United States and Iran has triggered a broad relief rally across global financial markets, with Brent crude oil prices slumping by roughly 16%, equities and bonds rising sharply, and the US Dollar plunging against major currencies [1][2][6]. The ceasefire, announced after US President Donald Trump suspended planned attacks on Iranian infrastructure and Tehran agreed to reopen the Strait of Hormuz, has shifted market sentiment decisively into risk-on mode [2][6]. S&P 500 futures jumped 2.75% to near 6,800 in European trading, reflecting strong investor appetite for risk assets [2]. Energy stocks led gains on Wall Street, and technical analysts observed key resistance levels for oil futures were broken on the upside, signaling renewed bullish momentum [6].
The US Dollar Index (DXY) fell 0.85% to near 98.70, with pro-cyclical currencies outperforming [2]. The New Zealand Dollar (NZD) was the strongest major currency, rallying 1.6% to near 0.5830 against the USD, supported by upbeat risk sentiment and hawkish remarks from the Reserve Bank of New Zealand (RBNZ) [2][5]. The RBNZ held its Official Cash Rate at 2.25% as expected, but revised inflation forecasts sharply higher for Q1 (3% y/y) and Q2 (4.2% y/y), reaffirming a tightening bias and discussing the possibility of a pre-emptive hike, though ultimately holding off due to uncertainty around the conflict's resolution [5]. Governor Anna Breman indicated that the neutral rate midpoint is at 3.0%, suggesting rate hikes are likely in the near term [2][5].
Gold prices surged up to 3% to USD 4,855 per ounce following the ceasefire, behaving atypically for a safe-haven asset and benefiting from lower oil prices, reduced inflation risks, and softer rate expectations that pushed bond yields down [4]. The outlook for gold depends on whether a lasting peace settlement emerges in the coming weeks [4]. The Chinese central bank increased its gold reserves for the 17th consecutive month, while the Turkish central bank saw a significant decline in reserves [4].
In Europe, the Euro rebounded as producer prices fell 0.7% m/m and 3.0% y/y in February, driven by a sharp drop in energy prices, while ex-energy price pressures remained positive [3]. German manufacturing orders rose 0.9% m/m, with strong gains in the automotive, textiles, and metals sectors [3]. Retail sales volumes declined slightly, reflecting weaker food sales but gains in fuel sales [3]. Lower core bond yields and improved risk sentiment post-ceasefire contributed to the Euro's strength [3].
The average price for a gallon of gas in the US is now 88 cents higher than in 2025, underscoring the volatility in energy markets caused by the conflict [6]. Analysts and market participants remain cautious, noting that the ceasefire is fragile and could unravel, keeping markets sensitive to further developments [6].
CONCLUSION
The US-Iran ceasefire has sparked a high-impact relief rally across global markets, with oil, equities, currencies, and gold all reacting positively. While risk sentiment has improved and central banks signal tightening biases, the fragile nature of the ceasefire means markets remain alert to further geopolitical developments. Sustained peace could drive further gains and ease inflationary pressures, but uncertainty persists.