Overview
- News outlets reported on Wednesday that U.S. and Iranian negotiators have a preliminary memorandum of understanding that would pause hostilities and open the Strait of Hormuz, but the pact has not been formally signed.
- Markets quickly rotated away from hedges as oil prices fell, equities rose, and bitcoin surged intraday past $72,000 before cooling later in the session.
- Negotiators are due to reconvene around June 19 and have discussed a possible 60-day window to finalize terms, leaving the outcome uncertain if talks stall.
- Turkey’s National Intelligence Organization, with reported help from Pakistan and Qatar, is credited with brokering the talks and linking Washington and Tehran for the ceasefire framework.
- The Strait of Hormuz matters because about one fifth of seaborne oil and LNG passes through it, so its reopening would lower the risk of big energy shocks that can push up inflation and hit household budgets.