Markets Respond Favorably to News of U.S.-Iranian Deal Despite Interim Nature and Unaddressed Issues
June 15, 2026
(135) The reported truce, which is to be signed Friday in Switzeraland, primarily addresses the mutually imposed impediments to shipping traffic through the Strait of Hormuz. Typically, President Trump has made assertions that Iran has not confirmed such as the water passageway remaining toll-free. The deal defers agreement on the whole justification for the U.S.-initiated war, that is the intention to dismantle Iran’s nuclear weapons program and its ability to join the club of nine countries with nuclear weapons. Also, Israel and Hezbollah are not parties to the deal.
Seeing will be believing if the peace will hold up beyond two months if eve to the 60-day limit, but financial markets, as they’ve done all along, are not waiting. Immediate reaction to the news has been impressive:
- Equity markets closed up 5.0% in Japan, 4.1% in Indonesia, 5.2% in South Korea, 1.6% in China and 1.0% in India.
- Euroland stock exchanges and futures readings for the four major U.S. indices are each at least 1% higher.
- West Texas Intermediate oil’s prices has plunged 5.5% further to around $80.20.
- Overnight dollar losses range from 0.1% versus the Canadian dollar and sterling to 0.4% against the Swiss franc and rupiah.
- Gold and silver prices have soared 2.8% and 4.4%.
- Ten-year sovereign debt yields have retreated five basis points in France and Italy, four bps in Germany, Japan, France and Italy, three bps in the United States and Switzerland.
The reality even if the truce leads to a more comprehensive peace and disarmament deal is that it will take many months for global oil supplies to be restored to pre-war levels because of damaged and/or shut-down facilities. Like the post-pandemiic period, the inflationary fallout of the war may outlast the initial reduction of supplies by an uncomfortably long interval.
A 0.1% uptick in U.S. industrial production last month fell short of analyst expectations but was still associated with the largest 12-month rate of increase (1.7%) in a half year and the highest capacity utilization (76.2%) in ten months and up from last November’s trough of 76.4%.
Euroland’s seasonally trade surplus trade surplus of EUR 1.9 billion in March and April combined was down from 17.8 billion euros in January-February. The unadjusted surplus cratered to EUR 12.9 billion in January-April from EUR 63.7 billion a year earlier, as exports fell 3.6% while imports rose 1.2%. Weak growth was also reflected in today’s reported industrial production figures showing a rise of only 0.1% in April compared to March and by 0.3% from a year earlier.
A 3.7% increase in Turkish industrial production during April, by contrast, was the most in 16 months and associated with an 8-month high 6.0% increase from a year earlier,
Japan’s tertiary index of service sector activity jumped 1.3% in April, and its 2.2% rise from a year earlier matched March’s year-on-year advance.
Price data released today featured a 0.4% decline in the combined Swiss PPI/import price index. The 1.8% drop in year-on-year terms reflected a 2.5% slump in domestic producer prices along with a 0.2% dip in import prices.
Polish consumer prices in May were 0.3 lower than in April but dipped only 0.1 percentage point on a year-on-year basis to a 2-month low of 3.1%.
Finnish consumer price inflation accelerated from -0.2% in January to 1.5% in April and a 26-month high of 2.1% last month.
Bulgarian consumer price inflation of 6.9% in May constituted a 32-month high, but Slovakia’s 2-month low CPI reading of 3.8% was 0.1 percentage point lower than in April.
After a 30-month high Croatian CPI inflation rate of 5.8% in April, such settled back to a 2-month low of 5.2%.
German wholesale prices dipped 0.6% in May. their 5.9% year-on-year increase was down from April’s 58-month high of 6.3%.
Wholesale price inflation in India accelerated to a 44-month high in May of 9.68%. That’s almost as far above as the 4.2% low in June 2023 as the May 2022 high of 16.6%. Wholesale price inflation for the fuel component was also at a 44-month high, the the manufacturing and food components respectively were at 45- and 14-month highs.
From a multi-year high of 19.6 in May, this month’s reading of the Empire State manufacturing survey index settled back to a 3-month low of 5.7 this month.
The U.S. housing market monthly index compiled by the National Association of Home Builders, which has ranged between 30 and 90 since early 2020, slipped to 35 this month from 37 in May and 34 in April. Canadian housing starts exceeded expectations last month.
The State Bank of Pakistan‘s policy interest rate was left unchanged after today’s scheduled review at 11.5%. That marginally lower than the May consumer price inflation reading of 11.7% and well above the 5-7% targeted range. “The Committee noted that global oil prices have eased following the recent positive geopolitical developments,” according to a released statement. At peak, the central bank’s interest rate had been held at 22.0% from May 2023 until June 2024.
Copyright 2026, Larry Greenberg. All rights reserved.
Tags: Euroland trade balance and industrial production, financial market reaction to U.S.-Iran deal, Swiss PPI, U.S. industrial production and capacity utilizzation
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