Relief rallies are expected across global markets on Monday after Donald Trump said overnight that a deal to reopen the Strait of Hormuz had been “largely negotiated,” raising hopes of easing tensions in the Middle East and a sharp pullback in oil-driven inflation fears.
This is the bullish analysis of Nigel Green of deVere Group, one of the world’s largest independent financial advisory and asset management organisations, as investors prepare for potentially sharp rebounds across bonds, equities, currencies and crypto after weeks of market turmoil fuelled by rising oil prices and inflation fears.
Bond markets are expected to be central to Monday’s reaction after a brutal selloff in sovereign debt pushed benchmark yields sharply higher in recent weeks.
The US 10-year Treasury yield climbed toward 4.7% this month, among its highest levels since early 2025, while the 30-year Treasury yield moved above 5%, levels not seen since before the global inflation crisis cooled.
Nigel Green says: “Bond markets have been pricing in a dangerous combination of higher inflation, elevated oil prices and geopolitical instability.
“Investors feared the Strait of Hormuz crisis could become a sustained inflation shock across the global economy.
“Markets understand what disruption there means for inflation, transport costs, manufacturing and consumer prices.”
Brent crude surged sharply during recent volatility, with analysts warning prices could climb toward $120-$140 if disruption persisted through summer.
“A credible agreement to reopen the Strait changes market psychology rapidly because a huge geopolitical premium has been built into energy prices,” notes the deVere CEO.
“If oil retreats sharply, inflation expectations fall alongside it, and bond markets are likely to rally hard.
“Lower yields could become one of the biggest stories of the week because recent moves in sovereign debt markets have been extreme.”
The yield on the US 10-year Treasury eased back toward 4.56% on Friday after optimism surrounding possible Iran negotiations began filtering through markets.
Nigel Green comments: “Markets are extraordinarily sensitive right now to any signal that inflation pressure may cool.
“Bond yields surged because investors believed central banks might have no option but to keep interest rates elevated for longer.
“A meaningful fall in oil prices eases that pressure immediately.”
Equity markets are also expected to react strongly.
“Falling yields combined with lower energy prices create a highly supportive backdrop for equities.
“Tech stocks, in particular, are likely to benefit because lower bond yields improve valuations for growth companies.
“Industrials, airlines, transport firms and consumer-focused sectors could all rally sharply if investors conclude energy disruption risks are fading.”
Major stock indexes have already shown how aggressively investors reposition around developments linked to Hormuz. Earlier this month, Wall Street hit record highs while crude prices dropped sharply on optimism surrounding potential diplomatic progress.
Currency markets are expected to shift rapidly as defensive positioning unwinds.
Nigel Green says: “The US dollar strengthened during the crisis because investors rushed toward safety.
“A de-escalation scenario likely supports renewed appetite for risk-sensitive currencies, including the euro, pound, Australian dollar and several emerging market currencies.”
Gold, which has surged during the conflict amid demand for defensive assets, may experience near-term weakness.
The deVere CEO says, “Gold has benefited enormously from geopolitical fear and inflation anxiety.
“If bond yields begin falling and investors move back toward risk assets, some capital is likely to rotate away from gold in the short term.”
Bitcoin is also expected to participate in any broad-based relief rally.
“Bitcoin increasingly trades alongside other macro risk assets during major geopolitical events.
“Improving sentiment, lower yields and reduced inflation fears create conditions for strong upside momentum across crypto markets.”
Markets remain highly sensitive to confirmation surrounding sanctions relief, shipping access and implementation timelines. Investors will also watch closely for signs that oil supply flows through Hormuz can normalise quickly.
Nigel Green concludes: “Recent weeks have been dominated by fear that another inflation wave was building through energy markets.
“Bond yields reflected those fears aggressively.
“If diplomacy gains traction, investors could see a powerful relief rally extend rapidly across bonds, equities and digital assets.”
