Ceasefire agreement faces uncertainty; if weekend negotiations are canceled, risk sentiment will be suppressed

Optimism about the ceasefire faded on Thursday as news from Iran turned negative. Global stock markets stalled, and oil prices rose. Brent crude oil topped $97 per barrel this morning, triggering a slight sell-off in European bonds at the start of trading hours. European stock markets are giving back some of Wednesday’s gains, and market sentiment is clearly no longer as bullish as before.
Although volatility remains stable, traders are cautious about the continued passage of oil tankers through the Strait of Hormuz, leading the market to retreat from some of Wednesday’s gains. Official data shows only three ships passed through the Strait of Hormuz on Wednesday. Currently, about 800 oil tankers are waiting around the strait, suggesting that reopening the shipping route will be a lengthy process. This could provide a bottom support for current oil prices.
It remains a news-driven market, with headlines dominating market sentiment. Iranian officials claim the ceasefire agreement has been broken, and reports indicate that energy infrastructure in the Gulf region continues to be targeted by Iranian missile attacks. U.S.-Iran negotiations are not expected to start until the weekend, so substantial progress is unlikely within the next 24 hours, which may keep the market range-bound for the rest of the week.
Despite nearly a 3% rise in oil prices and pressure on stocks on Thursday, oil has not broken the $100 per barrel level, possibly indicating that investors still hold hope for a breakthrough or a more stable ceasefire in the coming days. This may limit downside for risk assets in the short term and cap further oil price gains.
Throughout the conflict, traders have been eager to buy stocks and sell oil whenever regional positive news emerges, and we believe this trend will continue. If the overall trajectory suggests the war will end, risk sentiment should remain supported. We believe only significant setbacks—such as weekend peace talks being canceled—could change the overall market direction and lead to a spread of pessimism.