Mohammad Bagher Ghalibaf will travel to Switzerland to attend the formal signing ceremony of the memorandum of understanding between Iran and the United States, aimed at ending the conflict in the Middle East that has lasted over 100 days, Iranian diplomats announced on Tuesday.

High Expectations for the Reopening of Hormuz

The specific details of the agreement have not yet been disclosed. It is currently understood that "vessels will be able to transit the Strait of Hormuz starting Friday, following the framework agreement's signing ceremony," as stated by the U.S. President upon his arrival in Evian for the G7 summit.

When asked whether the Strait of Hormuz would reopen without transit fees for the duration of the upcoming 60-day negotiation period or for a longer term, JD Vance noted that he "expects the strait to be reopened without tolls on a long-term basis, and this is the type of issue we will address in these technical negotiations."

Reacting to Trump's statement on the reopening of the Strait of Hormuz, Sebastian Paris Horvitz, Director of Research at LBP AM, noted that "this would take place, as has been suggested several times in the past, within the framework of a 60-day extension of the current ceasefire. During this period, the issues that appeared to be the primary drivers of this war, including the Iranian nuclear program, will be debated."

"This discussion framework obviously appears fragile, given the lack of progress during talks over the last two months. However, we continue to believe, along with a large portion of the market today, that the incentives for both sides to end this conflict are so great that a return to war seems unlikely, though not impossible," he added.

According to Carmignac, "an agreement on the reopening of the Strait of Hormuz seems imminent, but it would not eliminate the threat that geopolitical tensions pose to global inflation. The anticipated deal would provide relief to energy markets without necessarily resolving the root causes of the conflict: Iran's nuclear, ballistic, and external intervention capabilities."

Iranian Foreign Minister Abbas Araghchi asserted that ending the war on the Lebanese front constitutes a "fundamental condition" of this agreement. According to him, the primary breakthrough of the first phase of negotiations is the declaration of an "immediate and definitive" end to the war on all fronts.

Furthermore, the Minister believes "that a final agreement must resolve issues related to the Iranian nuclear program and the lifting of sanctions" at the conclusion of the 60-day negotiation period.

Against this geopolitical backdrop, oil prices continue to retreat. Brent crude is down 1.98% at $81.71, while WTI has shed 2.61% to $79.19.

Fed: Warsh's Debut

Central banks are taking center stage this week. Ahead of Thursday's Bank of England decision and tomorrow's Fed meeting, the Bank of Japan announced this morning that it is raising its short-term policy rate to "around 1%," up from "around 0.75%" previously, following its policy meeting. This decision aligns with economist expectations. The Japanese central bank explained it is "adjusting its degree of monetary easing with a view to achieving its 2% price stability target in a sustainable and stable manner."

The Fed begins its two-day monetary policy committee meeting today, a significant first for its new Chair, Kevin Warsh. According to Paolo Zanghieri, senior economist at Generali Investments, "the Fed is expected to keep rates unchanged at its meeting, but the monetary policy debate is shifting significantly away from the possibility of a cut. The consolidation of inflation data makes a dovish stance very difficult to defend: the core PCE index is unlikely to fall below the 3% year-on-year mark anytime soon, while rising energy prices could keep headline inflation elevated and spill over into core inflation."

In corporate news, Virbac (+1.62%) is trading higher following a note from Oddo BHF suggesting that Ceva could be interested in a merger with the animal health specialist. According to an article in Journal Des Entreprises, the Chairman of Ceva Sante said he is "open to a merger" with Virbac. Analysts noted that Ceva Sante is the world's fifth-largest veterinary pharmaceutical company, generating revenue of €1.9bn, with 25% coming from vaccines and biology. It operates 32 industrial sites and 21 R&D centers with 7,200 employees.

STMicroelectronics announced a two-tranche convertible bond offering totaling $1.5bn and the early redemption of its 2027 convertible bonds.

Additionally, Beneteau (unchanged) indicated in a press release yesterday that it will cease production at its Cadillac, Michigan facility in the third quarter. The company also plans to sell the site along with its Four Winns, Glastron, and Scarab Jet brands. The global boating industry leader stated that a search for buyers is underway and that after-sales service and parts supply will be maintained until the divestiture is finalized.

Aperam is down 2.90% in Amsterdam, weighed down by a rating downgrade from Morgan Stanley. The U.S. bank moved from "overweight" to "equal-weight" on the stainless steel specialist, despite raising its price target from €48 to €52.

On the macroeconomic front, the ZEW index of economic sentiment for the Eurozone came in at 9.5, outperforming the consensus forecast of -7.2 and the previous reading of -9.1 in May.

In Germany, the ZEW economic sentiment index improved significantly more than expected in June. It rose from -10.2 to +10.5 points, while analysts had anticipated an increase to -5.8 points. At 10.5 points, it reached its highest level since February 2026, just before the start of the conflict in the Middle East.