The War Premium Is Cracking, but the Market Still Doesn’t Trust Peace

The trigger was oil. Brent crude fell more than 13 per cent after the announcement of a two-week US-Iran ceasefire and the reopening of the Strait of Hormuz, taking Brent back below US$100 a barrel. That was not a routine pullback. It was a sharp unwind of the scarcity premium that had built up when markets were bracing for a more severe supply shock.

That move in oil matters because it was the anchor for almost everything else. Once crude dropped that hard, the market could remove part of the inflation premium it had spent weeks building. . .