• Meanwhile in markets, President Trump’s message to “ships of the world” to “start your engines” captures the high-octane optimism among punters. With a ceasefire extension slated for signature this Friday and the Strait of Hormuz is officially poised to reopen for shipping, Brent crude prices have already fallen to levels last seen in the early stages of the war – propelling European equities to fresh record highs;

• Brent crude now trades at $82.73 a barrel – its lowest level since the first half of March. Further down the curve, January 2027 futures have dipped just below the $79 handle with the conflict-driven backwardation in the futures curve continuing to unwind. Yet, at a $79 price tag Jan-27 dated Brent remains nearly $20 higher than where active futures traded in January this year;

• Turning to bonds, the relief rally has pushed US Treasury yields down roughly 4bps across the curve this morning. Despite the move lower, yields remain much closer to their wartime highs than their pre-conflict lows. The 30-year UST yield still sits 33bps above its pre-war levels, with the 2-year yield gaining 65bps since the end of February;

• In our neck of the woods, Bund yields are down 3–5bps today in a bull-steepening move. However, the broader bear-flattening trend since the outbreak of the war also means that yields here remain relatively close to their conflict peaks. Losses have been more contained than in US Treasuries: the 30-year Bund yield is up 21bps since the end of February, while the 2-year yield has risen 56bps;

• In equities, European benchmarks surged to fresh all-time highs this morning: the Stoxx 50, Stoxx 600, AEX, IBEX and FTSE MIB all printed records. Today's 1.5 percent rally pushed the Stoxx 50 just shy of the 6,300 milestone – cementing a year-to-date gain of over just over eight percent. Across the Atlantic, S&P 500 futures climbed a little over one percent this morning, allowing the US benchmark to preserve its lead over Europe in 2026 despite trading below its own all-time high;

• Turning to broader market commentary, EURUSD is trading above the 1.16 handle for the first time in over a week following a broader weakening in the greenback. Dipbuyers will be consoled to hear that Bitcoin has risen back above the $65,000 mark. Gold has managed to stabilize after its early June sell-off – undoing a little over half of its 12.5 percent decline;

• Looking ahead, we have a couple of ECB-speakers to keep us entertained this afternoon, but the real action in this week’s central bank bonanza starts tomorrow. First in line are the Bank of Japan – which is expected to deliver a 25bps hike – and the Reserve Bank of Australia – which is expected to take its first policy pause of 2026.

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