Volkswacht Bodensee - Crude prices plunge, stocks surge on US-Iran peace deal

The two sides confirmed an announcement from mediator Pakistan, with a signing ceremony set to take place in Switzerland on June 19, bringing an end to three months of conflict that has sent energy prices soaring and revived fears of another inflation spike.

The Strait -- a vital maritime chokepoint through which roughly 20 percent of the world's crude oil supply transits -- was effectively closed by Tehran soon after US-Israel strikes on Iran kicked off the conflict on February 28.

"The Deal with the Islamic Republic of Iran is now complete," US President Donald Trump wrote on social media Sunday as he marked his 80th birthday.

"I hereby fully authorize the toll free opening of the Strait of Hormuz, and, simultaneously herewith, authorize the immediate removal of the United States Naval blockade.

"Ships of the World, start your engines. Let the oil flow!"

Iran's Deputy Foreign Minister Kazem Gharibabadi then said on television that the deal put an "immediate end" to the war and that talks on a "final agreement" will be held within two months.

The content of the agreement, which follows weeks of fraught negotiations and periodic threats from Trump of fresh hostilities unless Iran reached a deal, remained unclear.

Crude prices tanked as much as five percent Monday, with West Texas Intermediate approaching $80 a barrel for the first time since the start of March. Brent was down more than four percent at around $83.60.

Both main contracts have come down since their initial surge past $110 soon after the conflict started.

The sharp drop in oil costs soothed growing concerns that soaring inflation could force central banks to begin hiking interest rates again.

Data last week showing a jump in US May consumer prices -- coupled with strong jobs creation -- had ramped up bets on the Federal Reserve tightening before the end of the year.

"Oil down takes the inflation impulse down. Lower inflation risk takes some of the Fed-hike premium out of the curve. Lower yields give duration and growth equities room to breathe," said Stephen Innes at SPI Asset Management.

"The dollar loses a bit of its wartime bid. Crypto, always the fastest animal in the speculative zoo, gets launched by the same liquidity impulse. In one headline chain, the market moves from bunker pricing to reopening pricing."

However, he also said: "This is a first step deal, not a final peace settlement."

"The market will now trade verification," he added, including the official signing in Switzerland, mine clearance and Israeli restraint.

"It is a marketable ceasefire framework that kicks the hard problems down the road. Iranian compliance, and Hezbollah quiet."

Asian equities surged, led by Tokyo and Seoul, which piled on more than five percent apiece thanks to another flood into tech firms, fuelled by last week's record-breaking $75 billion IPO by Elon Musk's SpaceX.

Japanese tech investor SoftBank, along with chipmakers Tokyo Electron and Advantest led the way in Tokyo, while chip titans Samsung and SK hynix also chalked up healthy gains in Seoul.

SpaceX's 19 percent debut rally, which made Musk the world's first trillionaire, revived investor desire to pile back into the AI trade , which has been a key driver of the record-breaking gains across markets in recent years.

Elsewhere in Asia, Shanghai, Sydney, Singapore and Taipei all rose more than one percent while there were also advances in Hong Kong, Wellington.

Jakarta jumped more than four percent as easing concerns over energy costs provided fresh support to the beleaguered rupiah, which strengthened to 17,700 per dollar, its best leve. since the end of May. It had touched a record 18,209 earlier this month.

- Key figures around 0300 GMT -

West Texas Intermediate: DOWN 5.6 percent at $80.16 a barrel

Brent North Sea Crude: DOWN 4.1 percent at $83.77 a barrel

Tokyo - Nikkei 225: UP 5.4 percent at 69,593,64 (break)

Hong Kong - Hang Seng Index: UP 0.5 percent at 24,835.26

Shanghai - Composite: UP 1.0 percent at 4,071.72

Euro/dollar: UP at $1.1599 from $1.1577 on Friday

Pound/dollar: UP at $1.3438 from $1.3416

Dollar/yen: DOWN at 160.14 yen from 160.23 yen

Euro/pound: UP at 86.31 pence from 86.27 pence

New York - Dow: UP 0.7 percent at 51,202.26 (close)

London - FTSE 100: UP 1.6 percent at 10,471.72 (close)

F.Wagner--VB