Markets get a taste of peace as war trade unwinds

Hello, this is Anniek Bao writing to you from Singapore. Welcome to another edition of CNBC’s Daily Open.

President Trump’s decision to call off a planned strike on Iran sent oil prices tumbling, as investors repriced the risk premium after OPEC+ moved to pump more oil.

Markets, unsurprisingly, climbed on optimism over diplomatic overtures, with futures rallying ahead of a jobs report and a stacked earnings week.

Japan and the U.S., meanwhile, confirmed they had joined hands to prop up the yen — their first such effort since 2011.

Trump said he has canceled a planned attack on Iran, and he reached an agreement over the “perimeters of a deal,” signaling that the off-ramp that allows both sides to return to the negotiating table might be within reach — hopefully.

The agreement would include the complete opening of the Strait of Hormuz and an end to Iran’s nuclear threat, Trump said, adding that the decision would be “subject to being able to rapidly make a DEAL.” Israel has joined the commitment, he said.

The reversal came a day after the Wall Street Journal reported Trump had ordered the military to prepare a fresh attack that could begin as soon as the weekend. Trump told reporters on Air Force One that “we had an attack that would have been the biggest attack since WORLD WAR II.”

Renewed signs of de-escalation sent oil prices lower, with WTI and Brent both down more than 4% in early Asia trading.

OPEC+ also did its bit to calm oil markets. The cartel approved a production quota increase of around 188,000 barrels per day from September. The output hike, agreed by core members Saudi Arabia, Russia, Iraq, Kuwait, Algeria, Kazakhstan and Oman, completed a phased rollback of a 1.65 million bpd cut originally agreed in 2023.

U.S. stock futures rallied as investors gear up for a jobs report and a heavy earnings slate, with cooling crude offering a reprieve to anyone who found recent inflation prints uncomfortable. Though Asian markets opened lower.

Japan’s finance minister on Monday confirmed a joint foreign-exchange intervention with the U.S. to shore up the yen, the first coordinated action between the two since 2011. The dollar has retreated sharply, trading at 157.84 yen on Monday, down from a near 40-year low of 164 last week.

From lows to highs: Berkshire Hathaway shares scaled an eight-month peak last week with hopes for more gains ahead. The B shares ended Friday at $511.54, 5.2% below the record close of $539.80 set on May 2 last year, the day before Warren Buffett revealed he would step down as CEO at the end of 2025. The rally may still have room to run, since the stock remains well behind the S&P 500.

AstraZeneca is considering a merger with Bristol Myers Squibb that would value the combined company at roughly $400 billion, the Financial Times reported Sunday….