Tumbling crude prices on news that Iranian fuel may soon hit global markets promised inflation relief and pushed bond yields lower on Wednesday, while stocks and currencies were quieter ahead of Kevin Warsh's debut meeting as Federal Reserve chair.Brent crude futures dived below US$80 to the lowest since the opening salvos of the US-Iran conflict in March.
A senior US official said the US will waive sanctions on Iranian oil, under the deal to end the war, raising the prospect of millions of additional barrels of supply.
US bond yields dipped and rates in Asia followed suit, with 10-year Japanese yields down 1.5 basis points to 2.63 percent and 10-year Australian rates down almost 5 bps to 4.787 percent.
"Markets appear to be pricing in a relatively high probability of a full Hormuz flow normalization," said Kim Fustier, senior oil and gas analyst at HSBC, though the bank thinks it will take until the end of September.
Few details of the US-Iran agreement, due to be signed on Friday, have been publicly confirmed and a three-month stranglehold on the Strait of Hormuz has drained oil inventories, with US reserves at the lowest since 1983.
