US-Iran MOU Formally Signed — Strait of Hormuz Reopens, Brent Crashes ~11%

The US-Iran memorandum of understanding was formally signed and entered into force: Iran agreed to immediately reopen the Strait of Hormuz to commercial shipping, and the US agreed to lift its naval blockade of Iranian ports. The MOU sets up 60 days of follow-on talks toward a permanent peace deal. Oil prices collapsed on the news — Brent crude fell as much as 11% to roughly $96/barrel, WTI fell roughly 14% to about $96 — while Asian equity markets hit fresh records (Nikkei, Kospi, and Taiex all posted gains). The 10-year Treasury yield fell 9bp to 4.25% as rate-hike odds eased on the improved energy-price outlook, partially offsetting the hawkish signal from the same-day Warsh dot plot.