The surprise announcement on Sunday of a framework peace deal between Washington and Tehran triggered an immediate unwinding of geopolitical risk premiums across global markets on Monday. With a formal memorandum of understanding expected to be signed in Switzerland on 19 June, crude oil prices plunged—Brent futures dropped more than 5% to around $82 a barrel—while the yield on the benchmark 10-year US Treasury note retreated from recent highs. The dollar weakened broadly against major developed-market currencies, touching a 10-day low versus the euro and sterling, as investors rotated out of safe havens and back into risk-sensitive assets.

In emerging markets, the reaction was more nuanced. Brazil’s real initially strengthened, opening lower against the dollar, but quickly surrendered its gains to trade near stability as the session progressed. The São Paulo stock exchange, the Ibovespa, slipped into negative territory by the afternoon, with traders pointing to a rotation into US technology shares that drained capital from local equities. By contrast, Brazilian interest rate futures rallied decisively: the DI contract for January 2028 fell 20 basis points to 14.31%, reflecting a clear easing of domestic rate expectations. Mexico’s peso fared slightly better, edging up 0.16% to 17.20 per dollar, supported by the broader improvement in risk sentiment.

The core market-moving element of the accord is the commitment to reopen the Strait of Hormuz, the narrow waterway through which roughly a fifth of global oil supply transits. The deal also reportedly includes a lifting of the US blockade on Iranian ports and a truce extending to Lebanon. Viewed from Washington, the framework represents a significant diplomatic breakthrough, yet analysts in London caution that the memorandum is only a preliminary step. The details of a durable settlement—including verification mechanisms and the sequencing of sanctions relief—remain to be negotiated, leaving ample room for setbacks that could swiftly reverse the oil price decline.

For emerging economies, the calculus is mixed. Lower crude prices offer a clear benefit to net importers, easing inflationary pressures and improving current account balances. However, the rotation of global capital toward US tech stocks may continue to starve developing-world equity markets of fresh inflows. In Brazil, the external relief is further complicated by a fluid domestic electoral landscape, which keeps a floor under local risk premia. The coming days will test whether the détente can hold, with the formal signing ceremony on Friday serving as the next critical inflection point for markets that have quickly priced in a peace dividend.