08/04/2026 Daily Reports
Global FX: Back from the Brink
- Two-Week Ceasefire: News of a 14-day halt in hostilities in Iran has triggered a sharp recovery across all asset classes. Equities are up, and yield curves are steepening as the immediate “war premium” evaporates.
- Hormuz Reopens: In the most impactful move overnight, Iran announced it will allow safe passage through the Strait of Hormuz during the ceasefire. This is expected to significantly ease oil supply fears and pull back the “stagflation” trade.
- The Dollar Retreats: After a 3% rally in March, the DXY (Dollar Index) has gapped lower. Analysts see a move toward 98.50, though a full reversal is unlikely until peace looks sustainable.
Currency Movements & Central Banks
- EUR/USD Reprieve: The Euro is enjoying a strong bounce, aiming for the 1.1730/1750 range. However, it’s still a climb back to its pre-conflict level of 1.1800.
- Retracement Targets: High-beta emerging market and commodity currencies are expected to recover about 2% from their recent lows today
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Global Markets Surge as Ceasefire Triggers Equity Rally and Oil Sell-Off
- In the United States, the Nasdaq and broader equity markets rallied sharply following a newly announced two-week conditional ceasefire agreement between the US and Iran. The development provided immediate relief to equities recently pressured by the five-week geopolitical conflict. In exchange-specific news, Daktronics is scheduled to ring the Nasdaq closing bell today, while the exchange also launched the Rayliant NxtGen Multifactor International Equity ETF under the ticker RWIN.
- In Europe, the German DAX index surged roughly 5% to approach the 24,100 mark, achieving its highest level in a month. This robust recovery was directly tied to the ceasefire and the subsequent expectations of resumed oil flows through the Middle East. Energy-sensitive stocks were the primary beneficiaries of the de-escalation. Major industrial and technology firms, including Siemens Energy, Infineon, and Lufthansa, led the Frankfurt market with individual gains ranging between 9% and 10%.
- In the Asia-Pacific region, Japan’s Nikkei 225 index recorded its third-largest point gain in history, soaring 5.39% to close at 56,308.42. The index surged by over 2,878 points, reclaiming the 56,000 level. The Japanese market reacted aggressively to the receding geopolitical risks and the sharp decline in global crude oil prices, prompting widespread buying across multiple sectors. Concurrently, the Japanese yen strengthened to approximately 158 against the US dollar as safe-haven demand diminished.
- Brent crude oil markets experienced a massive sell-off, plunging roughly 14% to trade below $95 per barrel. This sharp decline followed the confirmation that the US halted threatened military strikes in exchange for Iran’s agreement to the provisional ceasefire. Crucially for global energy supply, Tehran announced it will temporarily allow safe passage of maritime traffic through the Strait of Hormuz under the supervision of its armed forces, with formal peace negotiations scheduled in Islamabad
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