Is it "true peace" or "false hope"? An overview: How investment banks view the temporary ceasefire between the U.S. and Iran

Ask AI · Can a two-week ceasefire open a window for lasting peace?

Cailian Press April 8 (Editor Xiaoxiang) On Tuesday, U.S. President Trump said he has agreed to a two-week ceasefire agreement with Iran. However, less than 12 hours earlier, he had also issued a “destroy civilization”-style ultimatum to Tehran, demanding it reopen the Strait of Hormuz, or else face large-scale attacks on its civilian infrastructure.

Since the ceasefire is seen as paving the way for lasting peace and restarting oil and natural gas exports in the Gulf region, oil prices plunged in the early hours of Wednesday, bond markets rose, and Asia-Pacific stocks and U.S. stock futures also jumped significantly.

In this regard, many Wall Street strategists said that Trump’s announcement of a temporary two-week ceasefire between the United States and Iran has, in the short term, sent a welcome signal of easing global market tensions. But they also warned that whether the market rebound can be sustained depends on when shipping through the Strait of Hormuz can return to normal. High oil prices remain a major downside risk facing the global economy, especially Asian economies, because many of them are highly dependent on Middle Eastern crude oil imports. At the same time, it may still be too early to start believing the story of “permanent peace.”

The following are some investors’ and analysts’ latest comments and analyses of the situation:

Harris Financial Group: Trump has finally found a way down

Harris Financial Group managing partner Jamie Cox said the market had been predicting that Trump was looking for an escape route on the Iran issue. Today, he finally found it and seized the opportunity. Over the past week, markets have been rising gradually, driven by more hardline rhetoric, which is often the inevitable prelude to the turnaround before reaching an agreement.

IG International: The rebound in Asian stock markets may be larger than in Europe and the U.S.

IG International market analyst Fabien Yip said, “Of course, there is a lot of optimism now, but because oil prices are still elevated, we have not yet returned to the levels seen at the end of February. It is crucial to watch Iran’s willingness to open the strait. Once oil tankers begin to pass through, the picture will become clearer.”

“The rebound in Asian stock markets could be greater than that of Europe and the U.S., because Asia was hit the hardest after the outbreak of the war. Tech and AI stocks, which previously suffered the most severe sell-offs, are expected to benefit the most. During the rebound, we may also see some investors take profits—some investors may use this opportunity to exit. Energy stocks may see profit-taking, because they previously benefited from rising commodity prices.”

Valverde Investment Partners: The market will focus on undervalued growth sectors

Valverde Investment Partners founder John Foo pointed out that the market is seeing another TACO trade again, and ceasefire-related headlines will bring some risk-on moves, as ASEAN and North Asia may get a breather on energy.

Clearly, the market will focus on undervalued growth stocks and sectors—for example, North Asia tech stocks, Vietnam, Singapore, and Thailand stocks.

WILLIAM BUCK: Investors will still realize the ceasefire may not last

WILLIAM BUCK chief economist Besa Deda said, “Given this is the first ceasefire with real substance since hostilities began, the market may show some cautious optimism. However, investors will still realize that the ceasefire may not last. What we want now is for the ceasefire to be maintained, thereby limiting the risk of the economy suffering deeper shocks. Of course, even if the ceasefire ultimately leads to resolving the issues, it will still take time to repair and restore refineries and infrastructure to normal—but this is far better than being affected in the long term.”

BARRENJOEY: There is uncertainty whether oil prices can fall back to $75

BARRENJOEY chief rates strategist Andrew Lilley said, “We still have a long way to go to return to levels before the conflict broke out. The current concern is how much the market’s uncertainty will allow oil prices to realistically fall back to $75.”

“In the current delicate situation—oil is indeed flowing and nobody is running short on supply, but prices remain at the $90 equilibrium—this actually rules out the tail risk of central bank rate cuts. This scenario would keep yields permanently high, because our infrastructure has been damaged and oil prices will stay sticky at high levels over the next few months, which implies higher inflation.”

Westpac Banking: The market’s knee-jerk reaction is just the algorithm at work

Martin Whetton, head of financial market strategy at Westpac, said, “This (TACO) happens from time to time. Does this mean people will take on new risks? No, not in any real sense. To change the situation, there must be truly lasting peace. People are not really taking on risk. This is just the algorithm operating.”

ANNEX Wealth Management: The ceasefire decision is enough to keep hope alive

Brian Jacobsen, chief economist at ANNEX Wealth Management, said, “President Trump said he agreed to a two-week ceasefire. That’s enough to keep hope alive—not only will the entire (Iran) civilization not be destroyed, but we may even see oil flow through the Strait of Hormuz again.”

“Of course, whether it’s ‘kicking the can,’ ‘moving the goalposts,’ ‘TACO Tuesday,’ or any other metaphor—ultimately, it will only lead to renewed tensions and bombs falling again. Who knows? But for now, it’s enough to trigger a positive market reaction.”

Lombard Odier: The market will see a relief-style rebound over the rest of this week

Lombard Odier Singapore strategist Homin Lee said, “If traffic through the Strait of Hormuz begins to improve significantly, the market will see a relief-style rebound over the rest of this week.”

“Traders will do their best to push the famous ‘TACO trade’ and further reduce the Hormuz premium in key asset classes. Beyond that, the reality of long-term geopolitical uncertainty in the Gulf region will limit how far they can push—especially if negotiation progress is not fast enough.”

K2 Asset Management: The key in the coming week is to replenish energy supplies

K2 Asset Management research director George Boubouras said, “Since the conflict could flare up again soon, replenishing energy supplies next week is key. The ceasefire decision lowers the probability of an economic recession, especially if more oil, natural gas, and fertilizer can flow in around next week. Markets are always pragmatic rather than blindly optimistic, because they are looking through the conflict itself, and from a one-year perspective, current valuations still look attractive.”

Vantage Global Prime: It’s too early to start believing the story of “permanent peace”

Vantage Global Prime senior market analyst Hebe Chen said that the sharp drop in oil prices after Trump announced the news gave the market a “much-needed breathing space.”

“However, although this 11-day window has somewhat repaired shaken confidence, it is only a fragile emotional recovery—tactical breathing, not a structural turning point. We are seeing funds frantically pulling out from war-hedging instruments, but with the Strait of Hormuz still the world’s most expensive ‘hostage,’ it is too early to start believing the story of ‘permanent peace.’”

Mitsui Sumitomo Trust: Stocks sold off during the plunge over the past month will be bought back

Hiroyuki Ueno, chief strategist at Mitsui Sumitomo Trust Asset Management, said, “This (temporary ceasefire) is a relief for the market. The situation has already calmed down. Iran has actually returned to the negotiating table, which is a step forward. Now people feel that high oil prices won’t last for long.”

“Stocks that were ‘sold off’ during the steep decline over the past month will be bought back again, driving a ‘reasonable’ rebound in the short term. In Japan, tech and AI stocks appear to be the most suitable for buying. But nothing is guaranteed to go smoothly from here onward, and investors should not get ahead of themselves.”

Commonwealth Bank of Australia: Still expects the U.S. to ultimately need to escalate actions to end the war

Carol Kong, a strategist at Commonwealth Bank of Australia, said, “There has been a knee-jerk reaction in the FX market, but critically, there is still no plan on how the war will end. We still expect the U.S. to ultimately need to escalate actions to end the war. Therefore, although the dollar may weaken further in the short term, it will be difficult to sustain the decline.”

(Cailian Press Xiaoxiang)