Equities in Japan, South Korea and Australia rose, sending the broader MSCI Asia Pacific Index up 2.4%. Nine shares rose for every one that declined in the gauge on optimism that an end to the war will ease crude oil flows and support economic growth. Asian technology shares advanced 2.9% after a four-day tumble.
The dollar fell, Treasuries extended their gains, and oil steadied as President Donald Trump said he foresaw the US ending the war with Iran within two to three weeks, and would leave it to other nations to resolve issues with the Strait of Hormuz. Brent crude traded just below $105 a barrel, after losing 3.2% on Tuesday.
A resolution would likely restore investor confidence after the five-week conflict roiled energy and equity assets, pushing some gauges into correction territory. Focus will also turn to policymakers’ response to elevated energy costs and supply disruptions and their impact on the economy, as well as whether first-quarter earnings later this month reflect the strain on growth.
“Markets have taken it on the chin for over a month and expectations may have hit a low enough point that any glimmer of hope is now much more valuable,” said Michael Bailey at FBB Capital Partners.
Trump, who will give an address to the nation at 9 pm Eastern Time Wednesday to provide an “important update” on Iran, said the Islamic Republic could still reach a deal with the US. He, however, added that an agreement with Tehran isn’t a prerequisite for the war to conclude. Iran reiterated its five demands must be met before the war against the US and Israel ends.In other corners of the market, the dollar weakened in early Asian trading. The Bloomberg Dollar Spot Index rose 2.4% last month, with the greenback emerging as the haven of choice during the war. Treasuries extended their gains with the yield on the benchmark 10-year falling two basis points to 4.29%.Gold advanced for a fourth consecutive day to trade above $4,700 an ounce. Despite the rebound in the past few days, bullion’s near 12% decline in March was its worst monthly performance since October 2008.
