• US Treasury Secretary Bessent: We may have an Iran deal tomorrow to open Hormuz
• EUR/USD surges above 1.15 helped by yen intervention; focus shifts back to fundamentals
• Iran and Oman near Hormuz shipping deal, challenging decades of free navigation
• Is USD/JPY starting its rebound toward new cycle highs? Eyes on the Middle East and US CPI
• Reminder: US non-farm payrolls will be on the data docket this week
• Crude oil rebounds on mixed US-Iran messages as weekend risk keeps prices underpinned
• Japan-US joint intervention a turning point for the yen?
• Saudi Aramco’s 44% profit surge shows who really won the US-Iran war
• Nasdaq analysis after Palantir earnings: The key support that could unlock a move toward 29,500
• What are the main events for today?
• Japan and US will “certainly” intervene again if yen resumes slide, says ex-BOJ official
• FX option expiries for 4 August 10am New York cut
• Oil holds a little higher on the day as US-Iran uncertainty continues to linger

Markets have been trading in a relatively subdued manner for most of the European session amid lingering uncertainty surrounding the Strait of Hormuz and the broader US-Iran standoff. Major equity indices hovered near flat levels, bond yields were little changed, and currency markets lacked a clear directional catalyst as traders awaited fresh developments from the Middle East.

The mood shifted decisively in the latter part of the session after a series of headlines fuelled optimism that a diplomatic breakthrough could be imminent. US Treasury Secretary Scott Bessent stated that the United States could have a deal with Iran “tomorrow” to reopen the Strait of Hormuz, adding that shipping activity through the strategic waterway was already showing signs of improvement and that energy prices should eventually stabilize. The comments reinforced earlier reports suggesting that mediators, including Qatar, were circulating draft language for a potential agreement aimed at restoring maritime traffic and paving the way for renewed negotiations between Washington and Tehran.

Risk sentiment improved rapidly following the headlines. US equity futures moved higher, the US dollar weakened and oil prices started to slide fast as traders began pricing in a lower probability of further escalation in the Gulf. The prospect of a reopening of Hormuz encouraged investors to unwind some of the geopolitical risk premium that had accumulated in recent weeks. The decline in oil prices helped support broader risk sentiment.

While the apparent progress is welcome, some caution remains warranted. Iranian officials have continued to send mixed messages regarding direct talks with Washington, and previous attempts at reaching a lasting agreement have encountered setbacks. Nevertheless, markets remain highly sensitive to any signs of diplomatic progress, with hopes for an imminent US-Iran deal proving sufficient to spark a rally in risk assets and a notable selloff in crude oil.

This article was written by Giuseppe Dellamotta at investinglive.com.