Live: ASX set to slip as fragile Iran war ceasefire keeps markets on edge

Global markets showed unease on Friday, with major indexes dipping as the resumption of US-Iran peace talks stalled. The fragile ceasefire, which had previously sparked a rally, faltered after Israel's renewed offensive in Lebanon and the cancellation of planned negotiations. This geopolitical tension is expected to weigh on trading.

In Australia, the ASX 200 is forecast to open lower, with futures trading pointing to a 0.2% slip. This follows a 0.9% decline on Friday. Markets are closely monitoring renewed threats and the possibility of Iran closing the Strait of Hormuz, a critical chokepoint for global oil supply.

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We concede that there will be a number of ships eager to leave the Gulf's warm waters, and we think crude will struggle to find its footing amid a flurry of 'open for business' headlines, and yet we question the durability of the deal.

Oil futures saw a slight increase, but this was tempered by an 8% fall over the preceding week. Tanker traffic through the Strait of Hormuz, which had resumed, abruptly halted over the weekend. Analysts at RBC Capital Markets expressed skepticism about the durability of any deal, drawing parallels to the Red Sea situation where shipping traffic remains significantly below pre-crisis levels despite a previous agreement.

Precious metals and commodities also experienced declines. Gold slipped for its fifth consecutive week, while iron ore and copper lost ground. A stronger US dollar and the stalled peace talks contributed to the negative sentiment impacting these markets.

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In the event that the deal holds … the Hormuz reopening trajectory could resemble something similar to the Red Sea, where shipping traffic remains over 50% below pre-crisis levels despite the Houthis signing a deal in May 2025 to end hostilities.