Asian equity markets ripped to fresh records on Wednesday and Brent crude slumped almost 8% in the prior session as a cascade of diplomatic developments pointed to a possible end to the Iran war, with the Trump administration tabling a detailed 14-point memorandum and Tehran weighing its response.
Reporting on Bloomberg's Daybreak Europe, anchor Joumanna Bercetche said the US side had presented a so-called memo of understanding that, while not publicly released, includes a provision to end the war immediately and open a 30-day window of formal negotiations on the most sensitive points dividing the two sides.
"Not publicly released, but from what we understand it includes a provision to end the war immediately and start a 30-day period of negotiations to lift restrictions on the Strait of Hormuz, limit Iran's nuclear program in exchange for lifting US [sanctions]," Bercetche told viewers. The two sides remain far apart on timing, she added, with Washington pushing for a 20-year ceiling on uranium enrichment and Tehran proposing five.
The market response was immediate. Asian indices ran sharply higher, with the Nikkei leading the rally, the Kospi extending the prior day's roughly 6% surge by another fraction of a percent, and Taiwan's Taiex up close to 2%. Korea's market capitalisation has now passed Canada's to become the seventh-largest globally, with Taiwan one place above. The dollar slid against emerging-market currencies, dollar-yen plunged sharply on what traders interpreted as renewed Japanese intervention, and gold held its bid just shy of fresh highs.
The most market-moving headline came from President Donald Trump, who claimed publicly that Iran has agreed to abandon any pursuit of nuclear weapons as part of the framework being negotiated.
"Iran cannot have a nuclear weapon and they won't get [it]. And they've agreed to that, among other things," Trump said.
Iran's official response remains pending, but Bercetche said reporting from Bloomberg's regional team suggested a formal reply would arrive in the coming days. The Iranian foreign minister met his Chinese counterpart in Beijing overnight, and the diplomatic clock is now running against a separate deadline: a high-level Trump-Xi summit slated for next week, where the US president is widely expected to want a Middle East deal already inked before he sits down in Beijing.
The oil tape captures the scale of the macro shift. Brent had been pinned above $100 for weeks on the back of the Strait of Hormuz blockade and what shippers and refiners described as one of the tightest energy backdrops since the 2022 European gas crisis. Wednesday's session brought Brent down close to 8%, a move large enough to cascade through inflation-linked breakevens, the long-end Treasury curve and global equity multiples in the same direction.
Global bond markets gained alongside stocks, with Bloomberg Daybreak's Lizzy Burden noting that traders were repricing front-end UK rate expectations on the same hopes that an Iran framework would compress the war risk premium that has dominated cross-asset trading for two months.
The diplomatic picture is not without speed bumps. Iranian state media has signalled that some elements of the US proposal are unacceptable in their current form, and a separate report of a fresh ceasefire violation in the past 24 hours leaves open the question of whether Tehran will treat the incident as serious enough to walk away from the broader memorandum.
For markets, however, the directional read is clear: even a partial deal that locks in a 30-day pause would knock the Iran war risk premium out of oil, ease pressure on long-dated Treasuries, and remove the single biggest tail risk weighing on global equity beta heading into the back half of 2026.