ASX Ceasefire Rally: Why the Market’s Relief Trade Still Looks Fragile

The ASX ceasefire rally is the kind of move investors want to believe in, but probably should not trust too quickly.

After a bruising stretch for global equities, markets are trying to price the possibility of a 45-day ceasefire between the US and Iran. That has opened the door to a short-term relief trade across Asia, with crude easing from peak panic levels and equities lifting modestly. On the surface, it is a rational response. If the risk of a prolonged supply shock starts to fade, markets can begin to claw back some of the geopolitical premium that. . .