In brief:

Ceasefire credibility questioned as violations emerge, weekend talk schedule looking tenouous
Israel-Hezbollah conflict continues alongside Iran tensions
Iran accuses US/Israel of breaching agreement terms
Strait of Hormuz effectively remains closed to tankers
Only four vessels crossed post-ceasefire, none oil/gas
IRGC issues alternative routes due to sea mine risks
Oil edges higher as supply concerns persist
USD rebounds modestly; FX risk tone cautious
Equities softer but holding recent gains

Skepticism around the ceasefire agreement remains high, leaving markets cautious as signs of fragility continue to emerge. The deal appears to be under strain, with Israel maintaining its parallel conflict against Iran-aligned Hezbollah in Lebanon, while Tehran has accused both Israel and the United States of violating the agreement, warning that further negotiations would be “unreasonable” under current conditions.

Lebanon has become a key flashpoint, with Iran’s Parliament Speaker Ghalibaf stating that three clauses of the proposed 10-point framework have already been breached, further undermining confidence in a durable ceasefire.

At the same time, the Strait of Hormuz remains effectively closed to most commercial traffic. Only four vessels have reportedly transited since the ceasefire began, none of them oil or gas tankers, with no confirmed crossings since the IRGC declared the waterway shut amid alleged violations. Shipping activity remains severely constrained, reinforcing concerns that energy flows have yet to normalise.

There was a modestly constructive development, however, with Iran’s Islamic Revolutionary Guard Corps issuing guidance on alternative transit routes through the Strait, aimed at navigating around sea mines deployed during the conflict. While this offers a potential pathway to restoring limited flows, it does little to alleviate broader uncertainty or insurance concerns in the near term.

Across markets, the tone reflected this cautious backdrop. The USD regained some lost ground, with USD/JPY pushing back toward 159.00 before settling near 158.80, while EUR/USD slipped below 1.1660. Gold traded largely sideways, and oil edged higher but remained rangebound. Regional equities were modestly softer but held onto much of their recent gains.