US EQUITY OPEN: Stocks rally as Iran allows commercial traffic through Hormuz

US EQUITY OPEN: Stocks have opened in the green with SPX breaching 7,100 to the upside while the Russell outperforms after Iran announced it has opened the Strait of Hormuz to all commercial vessels through the coordinated route announced by Iran. The news has heavily weighed on energy prices with Brent falling to a low of USD 87.77/bbl on prospects of the reopening of Hormuz, however, Hapag-Lloyd have said they will refrain from using it for now, while shipping analysts via WSJ said the industry needs more clarity. Nonetheless, it is clearly a step in the right direction to reopen traffic through the Strait. The optimism is weighing on the Dollar while AUD outperforms on the risk tone, while JPY outperforms as UST yields slide. Yields are lower across the curve with money markets now pricing in c. 12.5bps of cuts by year-end (vs 8bps on Thursday) from the Fed as lower energy prices reduce inflation expectations. Gold prices are rising on the softer dollar, yields and more dovish central bank policies. 

STOCK SPECIFICS

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