ADDED LATE:
- Trump said that he isn’t thinking about extending the ceasefire, adding that he doesn’t think it will be necessary.
- “I think you’re going to be watching an amazing two days ahead. I really do,”
Summary:
- Optimism extends into Asia on US–Iran deal signals
- Vance flags progress, “grand bargain” framework in play
- Trump tone mixed: “very close to over” but not finished
- Oil softens as geopolitical risk premium eases
- Japan manufacturing sentiment hit by energy shock
- USD firms modestly, equities supported but off highs
The optimistic tone carried into the Asia session, supported by further constructive signals from US officials on Iran negotiations.
US Vice President JD Vance said talks with Iran are progressing, with the ceasefire holding for a seventh consecutive day and a broader “grand bargain” under discussion. While key gaps remain, the continuation of negotiations is helping to underpin a cautiously constructive market mood. Reports also suggest Vance is expected to lead a potential second round of talks ahead of next week’s ceasefire deadline, alongside Steve Witkoff and Jared Kushner. Vance added that if Iran commits to forgoing nuclear weapons, the US would support its economic reintegration.
Messaging from Donald Trump remained characteristically mixed. A promotional clip for a Fox interview suggested Trump viewed the war as “over,” which initially lifted sentiment. However, subsequent remarks were more measured, with Trump saying the conflict is “very close to over” but stressing operations are not yet complete and that developments in coming days will be key. The tone reflects ongoing uncertainty despite improving headlines.
In markets, oil remained on the back foot, with softer price action suggesting a further easing in geopolitical risk premium. That said, the session spike low should provide near-term technical levels to watch.
Data-wise, Japan’s Reuters Tankan survey showed the sharpest drop in manufacturing sentiment in three years, highlighting the growing impact of higher energy costs and supply disruptions, even as domestic-facing sectors remain relatively resilient.
In FX, the US dollar saw a modest bounce, with USD/JPY pushing back toward the 159.00 level. US equity futures remained supported, albeit slightly off session highs, as markets balance improving geopolitical signals against lingering uncertainty.
