WS #8168

The US-Iran peace deal narrative continues to dominate, with new details emerging that both corroborate and complicate the outlook. Iran's foreign ministry spokesperson stated that a framework has been reached but no deal is imminent, and that management of the Strait of Hormuz is an Iranian-Omani issue, not part of the current US talks. A senior Iranian diplomat added that nuclear issues and enriched uranium reserves would only be discussed in a 60-day negotiation after a potential MOU, contingent on US fulfilling commitments. This suggests the deal is not as close as earlier headlines implied, introducing uncertainty. Separately, oil prices fell over 5% on the hope of a Strait reopening, boosting Asian equities and crypto. Bitcoin traded above $77,000. The Nikkei 225 rose 3.04%. However, Toyota announced further overseas production cuts of 83,000 vehicles due to the Strait blockade, highlighting ongoing supply chain disruption. China's crackdown on illicit cross-border stock trading is causing a rush for exits, per Bloomberg. Huawei announced a new chip design method to overcome US restrictions, with its executive expressing confidence in competitiveness for the next decade. The Iran deal narrative is de-escalating from 'imminent' to 'framework only', which may temper the oil price decline and equity rally.