Trump declares ceasefire with Iran 'terminated'; oil rises 5%, bond yields hit highs
Donald Trump said the June 17 ceasefire with Iran is over, sending oil prices up more than 5% and pushing French government bond yields to their highest since 2009 amid a wave of military strikes in the Strait of Hormuz.
Ceasefire collapse
On Wednesday, US President Donald Trump declared that the ceasefire with Iran, in place since June 17, was "terminated". Speaking to reporters, Trump said: "It's just a waste of time to talk to them, they are liars," also calling Iranian leaders "scum". He added that dialogue remained possible, but market participants immediately reacted to the prospect of renewed Middle Eastern instability.
Strait of Hormuz escalation
The breakdown followed a rapid escalation in the strategic Strait of Hormuz. On Tuesday, three ships were attacked in the waterway within 24 hours, with Qatar and Saudi Arabia attributing two of the strikes to Iran. In retaliation, the US military launched a "series of powerful strikes" on over 80 targets in Iran overnight into Wednesday, according to US statements. Iranian media reported explosions near the port city of Bushehr, close to the Kharg Island oil terminal.
- Ceasefire agreement signed, ending war that started February 28.
- Three ships attacked in Strait of Hormuz; U.S. military launches strikes on over 80 targets in Iran overnight.
- Trump says truce is over; Brent surges 5.3%, French 10-year yield hits highest since 2009.
Oil price rise
Crude prices rose sharply: Brent crude gained 5.3% to $78 per barrel and West Texas Intermediate added 5.4% to $74, as tracked around mid‑morning European time. The US also lifted a waiver that had permitted some Iranian oil sales, compounding supply concerns.
Geopolitical risks in the Middle East have resurfaced despite the temporary ceasefire, with Brent recording its biggest rise since early June.
The United States announced the lifting of the waiver allowing the sale of Iranian crude oil, in addition to large‑scale airstrikes against Iran, reviving concerns about the stability of crude oil supply.
Bond yields climb
Equity markets sold off on the news, with CFRA strategist Sam Stovall noting the president’s comments "triggered a wave of sales". Government bond yields surged as inflation fears resurfaced. The US 10‑year yield edged up to 4.57%, from 4.55% the previous close. More strikingly, the French 10‑year OAT yield jumped above 3.90%, its highest level since June 2009, driven by the broader move in European sovereign debt. The previous 2026 peak of 3.88% had been set in March.
It is certain that the concern now is about rising oil prices.
Fed minutes in focus
Investors turned their attention to the afternoon release of the Federal Reserve’s latest policy‑meeting minutes, the first under new chair Kevin Warsh. Markets are pricing a September rate hike, according to the CME FedWatch tool, as the central bank weighs fresh inflationary impulses. Meanwhile, the French public debt burden, at 117.5% of GDP, leaves the country especially exposed to higher borrowing costs.
We are in a delicate period where possible alternatives to the Iranian 'toll' system are being studied. But Iran is sending a clear signal: no alternative will be accepted.
