Risk assets rallied around the world and oil slumped during Monday’s European session, as reports of progress in U.S.-Iran peace talks boosted risk sentiment.
Bitcoin Asian gains were extended to trade near $82,000 during European hours, as futures linked to Wall Street’s tech index Nasdaq rose more than 1%. WTI crude oil futures fell 6% to $95.28 a barrel.
The move follows a report from Axios that Washington and Tehran are close to concluding a one-page memorandum of understanding aimed at ending the war. The draft deal would include negotiations between U.S. envoys Steve Witkoff and Jared Kushner and Iranian officials, conducted directly and through intermediaries.
The report raises hopes for a normalization of oil flows through the Strait of Hormuz, which has reportedly been mined by Iranian forces. Flow disruptions since the end of February have wreaked havoc on energy markets around the world, particularly in Asia.
According to the report, Iran would agree to remove highly enriched uranium from the country, a long-standing US demand that Tehran has previously resisted. However, some market participants have questioned the likelihood of lasting progress, particularly on nuclear concessions.
“I’m a little skeptical on the last point about Iran ceding ground on the nuclear front. But we’ll have to wait and see, I guess,” said ForexLive currency analyst Justin Low.
Nonetheless, the prospect of a de-escalation was enough to trigger a widespread shift in positioning, with traders moving toward risk assets and abandoning energy exposure in expectation of a reduction in geopolitical friction.
