The Week Ahead

• Geopolitics remains firmly in the driver’s seat this week, with reports emerging of a proposed framework between the US and Iran that would see the Strait of Hormuz reopen, sanctions eased and a pathway established for ongoing nuclear negotiations.
• The proposal would also extend the current ceasefire by 60 days, providing markets with greater confidence that tensions in the region may continue to de-escalate while diplomatic discussions progress.
• Risk assets welcomed the developments, with equity markets rallying while Brent crude eased toward the mid-US$80s per barrel, trading at the lower end of its conflict-era range.
• Looking ahead, attention shifts from geopolitics to central banks, with a heavy calendar of policy meetings set to shape market sentiment over the coming week.
• Of those, the RBA will be front of mind for local markets, while current expectations point to the RBA, Fed and BoE remaining on hold, with the Bank of Japan expected to deliver a 25bp rate increase.