A potential Iran nuclear deal is driving a risk-on move in stocks and bonds while crushing oil prices, but the only fundamental determinant is whether the Strait of Hormuz actually reopens to free-flowing tanker traffic. Without a confirmed deal, the current market reaction is purely speculative and fragile.
•News of a possible Iran deal over the weekend triggered a sharp rally in equities and bonds and a sell-off in oil as short-term traders positioned for de-escalation.
•The author argues that regardless of political rhetoric, the sole question that determines the lasting market impact is whether the Strait of Hormuz begins to flow normally again.
•The article questions the durability of the move, noting that an actual deal has not yet been finalized and that current price action is driven by speculative positioning.