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Commerzbank Says Brent Falls 7% as Mideast Tensions Ease, Dollar Weakens

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Brent crude prices fell by about 7%, reaching around $92 per barrel, as tensions in the Middle East eased amid a halt in US-Iran military strikes, according to Commerzbank. Treasuries rally.

The US paused military attacks against Iran for a second consecutive night, while Tehran also refrained from retaliatory action, said Commerzbank. Meanwhile, Oman and Iran continued discussions on a transit arrangement for the Strait of Hormuz, with diplomats describing the negotiations as "moving in the right direction."

Iranian officials likewise characterized the talks as "constructive."

Asian equity markets mostly advanced, though gains lagged in Japan's Nikkei and South Korea's Kospi, said Commerzbank. US equity futures edged higher, the US dollar weakened broadly and the euro strengthened to trade above $1.14.

President Donald Trump urged the Senate to pass the Budget Resolution before the August recess, added the bank. Trump also warned that the US could impose substantial tariffs on Canada in response to cross-border wildfire smoke.

European Central Bank Chief Economist Philip Lane said the eurozone is facing a moderate economic shock and stressed that the ECB's policy response will be "not over-reactive, not under-reactive."

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