Oil prices cooled, and Asian stocks rose amid hopes of a US-Iran trade deal.
On the afternoon of May 25th, Asian stock markets uniformly rose, while world crude oil prices fell sharply by about 5% amid optimistic signals about an agreement between the US and Iran to reopen the vital shipping lane through the Strait of Hormuz.
The fact that Washington and Tehran are nearing an agreement to end the conflict has had an immediate positive effect on the global economy. Previously, the conflict, which erupted in late February, had led to a blockade of the Strait of Hormuz, driving up energy prices and raising concerns about inflation.
As recorded in the afternoon trading session on May 25th (Vietnam time), crude oil prices fell sharply across the board. Specifically, North Sea Brent crude retreated to $98.36 per barrel (down 5%), while US WTI light sweet crude decreased by 5.4% to $91.42 per barrel.
In contrast to the energy market, Asian stock markets closed the week on a high. The biggest highlight was the Nikkei 225 index in Tokyo (Japan), which surged 2.9%, surpassing the 65,000-point mark for the first time in history. Stock exchanges in Shanghai, Taipei, Manila, Singapore, as well as Frankfurt and Paris in Europe, all recorded positive gains upon opening.
The main driving force behind the market stems from progress at the negotiating table. Speaking in New Delhi, India, on May 25th, US Secretary of State Marco Rubio revealed that an agreement could be announced as early as today.
Earlier, US President Donald Trump also stated that the ongoing negotiations were constructive, but instructed US representatives not to rush. Nevertheless, the peace process still faces several core obstacles, including the handling of Iran's enriched uranium stockpiles, the release of frozen assets, and the possibility of including Lebanon in the overall agreement.
Besides the Middle East hotspot, global investors this week are paying particular attention to the Personal Consumption Expenditures (PCE) index, the most important inflation measure of the US Federal Reserve (Fed), which is expected to be released on May 28th.
