Oil surged by more than 5% on Wednesday and global stocks and bond prices tumbled, as investors fled risk assets after US President Donald Trump said the memorandum of understanding signed with Iran to end the Gulf conflict was "over".
Trump, who was speaking in Ankara ahead of a NATO summit in the Turkish capital, added that he did not want to engage with Tehran. "As far as I'm concerned, it's just a waste of time dealing with them," he said.
Market sentiment was already fragile after US and Iranian forces had traded attacks in the Gulf.
Brent crude futures leapt 5%, the most in a day since late May, to $78 a barrel.
While that was well shy of the peaks above $120 seen during the height of the fighting, it was enough to inject some fresh inflation risk into the bond market, particularly since months of conflict have drawn down global oil inventories.
