Gulf shipping lanes deal and oil price rise

On August 9, Iran announced that a deal with Oman defining new shipping lanes in the Strait of Hormuz was in its final stages, but reiterated that the waterway would only reopen once the United States met other conditions. This lack of progress in Gulf peace talks contributed to a rise in oil prices, with Brent crude adding 0.9% to $84.32 a barrel and US crude rising 0.7% to $78.74 a barrel. Meanwhile, Asian share markets tracked Wall Street higher on August 10 after a soft US jobs report pared the risk of a near-term rise in borrowing costs. The futures market scaled back the chance of a September United States — Federal Reserve rate hike to around 44%, from 67% a week ago. The pullback in rate risk helped Treasuries rally and saw Wall Street close at record highs. Japan's Nikkei rose 0.6%, South Korea's KOSPI added 0.5%, and MSCI's broadest index of Asia-Pacific shares outside Japan edged up 0.3%. In European Union — Europe, EUROSTOXX 50 and DAX futures dipped 0.1%, while FTSE futures fell 0.4%. S&P 500 futures dipped 0.1%, while Nasdaq futures were little changed after climbing 5% last week amid upbeat earnings reports. Analysts at Bank of America noted that with nearly 90% of S&P 500 results in, earnings per share were up 30% on the year after excluding investment gains at Alphabet and Amazon, with a 76% EPS beat rate matching the strongest level since 2021. AI remains the standout, with median EPS growth of 28% versus 12% for non-AI related stocks. Earnings this week include Applied Materials, Cisco, and CoreWeave. In bond markets, 10-year Treasury yields were a shade higher at 4.673% with the market bracing for $125 billion in new issuance. The drop in yields and general improvement in risk pulled the US dollar broadly lower, with the euro just off a seven-week top at $1.1557. The dollar was flat on the yen at 157.85. Gold held at $4,342 an ounce, having climbed more than 7% last week.