Reopening of Hormuz Strait Makes IMF Growth Downgrades Look Outdated — Market Talk

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1014 ET - Iran's announcement that the Strait of Hormuz will remain open during the current ceasefire has sent Brent crude prices tumbling and already makes the International Monetary Fund's latest global growth forecasts look out of date, XTB's Kathleen Brooks says in a note. While it will take time to relieve the backlog of tankers, this is undoubtedly good news, and it brightens the outlook for the global economy for the rest of this year, she says. The news is reducing upward pressure on bond yields while interest-rate expectations will also be recalibrated. "We expect to see a rapid pricing out of rate hikes from the Bank of England and the European Central Bank," she says. (edward.frankl@wsj.com)

1013 ET - The retail sales report will give a preview of what spending was like amid the conflict in the Middle East, with BofA remaining optimistic on the consumer. Aside from gas spending the firm says credit and debit card data have been solid, with balance sheets healthy going into the war. Still, they remain cautious on a consumer where K-shaped dynamics are likely to become more pronounced. BofA predicts a solid 1.8% increase month-over-month in March, and 0.6% jump for ex-auto and control group retail sales. (jessica.coacci@wsj.com)

1011 ET - Investors cut back expectations of the Bank of England raising interest rates in the coming months after Iran's foreign minister Abbas Araghchi said on his X account: "The passage for all commercial vessels through Strait of Hormuz is declared completely open". The announcement caused oil prices to drop sharply, calming concerns about the risk of rising inflation. Markets currently price in 25 basis points of BOE rate rises in 2026, down from 36 basis points priced in a week ago, LSEG data show. At the peak of the Middle East conflict, investors fully priced in the possibility of three 25 basis-point BOE rate rises this year. (miriam.mukuru@wsj.com)

1003 ET - Bitcoin rises to another 10-week high after Iran's foreign minister Abbas Araghchi declared the Strait of Hormuz "completely open" to commercial vessels following a cease-fire between Israel and Lebanon. President Trump welcomed the move on his Truth Social but said a U.S. blockade of Iranian ports would remain in place until a peace deal is reached. "This process should go very quickly in that most of the points are already negotiated," he said. Earlier, Iran said it wouldn't accept any further temporary cease-fire between the U.S. and Iran and instead wants the conflict to "end here once and for all." Bitcoin rises 2.8% to a high of $77,532, LSEG data show. (renae.dyer@wsj.com)

0956 ET - Investors continue to bet on almost two full interest-rate hikes by the European Central Bank this year. This is despite oil prices dropping sharply after Iranian foreign minister Abbas Araghchi said on X that the passage for all commercial vessels through the Strait of Hormuz is declared completely open for the remaining period of ceasefire. If normal maritime traffic returns, inflationary risks could decline but investors maintain caution for now. Money markets price in 45 basis points of rate hikes for 2026, according to LSEG data, slightly less than about 50 basis points of hikes previously. Money markets expect the ECB to stay on hold at the April 30 policy meeting. (emese.bartha@wsj.com)

0954 ET - Shares in European banks gain after Iran foreign minister said the Strait of Hormuz is "completely open" to commercial vessels. The Stoxx 600 banking subindex is up 2.4% in afternoon trade on Friday, compared with a 1.4% increase for the broader index. As an economically sensitive sector, banks had lost ground in recent weeks as cautious investors weighed the risk that higher oil prices could force central banks to keep interest rates high, potentially slowing economic growth. "That's a massive shot in the arm for risk sentiment," says Saxo UK's Neil Wilson. The continent's largest banks trade in the green. (elena.vardon@wsj.com)

0953 ET - Another gauge of Canadian housing prices provides more evidence of softness. The Teranet-National Bank Composite Index fell in March for a fourth-straight month, by a sharp 1% on a seasonally-adjusted basis. The Teranet-National Bank index tracks prices in Canada's 11 biggest urban markets. National Bank economist Daren King says that prices in 55% of markets tracked fell by more than 10%. That share "remains very high by historical standards, especially given the current environment of more accommodative interest rates," King says. King says prices are likely to weaken further in the coming months, unless there is a positive development in US-Canada trade relations--such as more certainty about USMCA's future. (Paul.Vieira@wsj.com, @paulvieira)

0946 ET - The euro is likely to rise further against the dollar by year-end if the European Central Bank raises interest rates, ING analysts say in a note. While ING now expects just one ECB rate rise in June, it sees the Federal Reserve delivering two rate cuts later this year. This should encourage investors to hedge against the risk of a weaker dollar, they say. ING expects the euro to rise to $1.20 by year-end but sees the risk of a bigger appreciation if the ECB ends up delivering two rate rises and political uncertainty builds ahead of U.S. midterm elections in November, triggering more dollar weakness. The euro rises to a two-month high of $1.1848, LSEG data show. (renae.dyer@wsj.com)

0935 ET - The dollar erases nearly all of its wartime gains as the Strait of Hormuz is declared open for commercial traffic and Wall Street grows confident an Iran peace deal is coming. ICE's DXY gauge falls 0.4% to 97.78, compared to 97.61 at close on February 27, just before the first U.S.-Israel attacks on Iran. The WSJ Dollar Index, down 0.4%, is also just above its pre-war level. Oil prices plummet more than 10%, easing inflation fears and supporting the prospect of interest rate cuts in the U.S. The greenback weakens 0.5% against the euro and the yen. (paulo.trevisani@wsj.com; @ptrevisani)

0934 ET - U.K. 2-year government bond yields fall to a month-low as inflation concerns ease after Iran's foreign minister Abbas Araghchi said that "the passage for all commercial vessels through Strait of Hormuz is declared completely open," on his X account. Investors are optimistic that the energy supply will resume normal levels in the near term, calming nerves about the risk of energy-driven inflation. Two-year gilt yields fell to a one-month low of 4.091% following the announcement, Tradeweb data show. Ten-year gilt yields drop 9.5 basis points to last trade at 4.749%. (miriam.mukuru@wsj.com)

0925 ET - Eurozone government bond yields fall sharply after Iranian foreign minister Abbas Araghchi said on X that the passage for all commercial vessels through the Strait of Hormuz is declared completely open for the remaining period of ceasefire. Oil prices drop sharply as Iran's announcement adds to market hopes of a return to normal maritime traffic, enabling a resumption of energy transport from the Gulf region. The 10-year German Bund yield falls 6.5 basis points to 2.961%, the 10-year French OAT yield is down 8.8 basis points at 3.579%, and the 10-year Italian BTP yield drops 11.7 basis points at 3.678%, according to Tradeweb. (emese.bartha@wsj.com)

0918 ET - The dollar weakens as oil prices plunge on reports that Iran is declaring the Strait of Hormuz is now open. President Trump refers to the announcement on social media. The news comes amid growing hopes of a peace deal. Treasury yields also fall as the prospect of cheaper energy eases fears of lasting inflation and boosts expectations of Fed cuts. ICE's DXY index falls 0.6% and the WSJ Dollar Index is down 0.5%. The 10-year Treasury yield is at 4.23%, down from around 4.30% before the news. (paulo.trevisani@wsj.com; @ptrevisani)
source: https://www.tradingview.com/news/DJN_DN20260417004151:0/