What matters in U.S. and global markets today

The global stock rally triggered by the preliminary U.S.-Iran ⁠deal seemed to moderate on Tuesday as markets awaited more details on its terms and looked for signs that it would lead to ​a meaningful increase in tanker traffic through the Strait of Hormuz.

Attention was also fixed on central banks on Tuesday as the Reserve Bank of Australia and the Bank of Japan kicked off the week’s busy calendar for ‌monetary policymakers. The BOJ delivered an expected quarter-point rate ‌hike to 1%, a 31-year high.

I’ll get into that and more below.

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Despite President Donald Trump’s comments on Monday that oil tankers were exiting the Strait of ​Hormuz, there were no significant tanker crossings visible in vessel-tracking data on Monday - although ships continue to move along Oman’s coast under the watch of the U.S. Navy.

Brent crude moved down further on Tuesday, having slid some 5% on Monday, but held above $80 per barrel. Meanwhile, global shares extended their gains as major Asian indexes edged up and European shares opened higher. Wall Street futures were broadly flat before the bell.

It’s still early days, and Trump said ​on Monday that the text of the deal would be released after its formal signing on Friday. Meanwhile, fighting between Israel and Hezbollah in Lebanon eased on Monday.

Moving to central ⁠banks, ⁠the BOJ’s expected rate hike to 1% ⁠represented another step in the normalization of ​the country’s monetary policy as it sought to tamp down price pressures that were exacerbated by the Iran war-driven energy shock. Speaking on Tuesday, BOJ Deputy Governor Shinichi ​Uchida welcomed the U.S.-Iran memorandum but noted uncertainty on the “pace ⁠of improvement” regarding oil flows.

The well-telegraphed move had little impact on the yen, which remained near 160 to the dollar. Any further weakness from here could trigger another bout of government intervention to prop up the currency.

Meanwhile, the Reserve Bank of Australia kept rates unchanged at 4.35%, highlighting the slowing economy, but it also warned that inflation remained too high, meaning it may yet hike rates.

While the Federal Reserve and the Bank of England are expected to leave rates unchanged when they meet on Wednesday and Thursday, respectively, their language will be closely scrutinized as investors assess how the prospect of a resolution to the Iran war could ⁠influence their rate paths.

On the tech front, Elon Musk’s SpaceX continued to shoot upward after its monster IPO last Friday, having risen more than ⁠19% on Monday. Its moves in premarket trading put it on track to become the world’s fifth-largest company, eclipsing $2.7 trillion Amazon.

It’s worth considering that more than $1.16 billion of SpaceX shares had exchanged hands as of early this morning. That’s several times the trading volumes in Nvidia, Microsoft, Tesla and Apple combined over that period.