It was a classic relief rally on Monday as markets digested the prospect of an interim peace agreement between the US and Iran. The deal has reportedly been electronically signed by President Trump and Vice President JD Vance, with Friday’s in-person signing expected to initiate a 60-day technical negotiation period.Oil Slides and Equities Catch a BidPeace agreement developments are certainly good news and a step in the right direction, and markets have responded as expected: risk-on. Oil benchmarks – Brent crude and WTI – closed yesterday’s session 4% lower, with Brent approaching the widely watched 200-day SMA at around US$80/barrel. US equity benchmarks ended the session higher across the board, led by technology (XLK), consumer discretionary (XLY), and industrials (XLI). SpaceX (SPCX) gained another 20% on its second day of trading, closing just south of US$200, underscoring that appetite for frontier technology remains incredibly strong. In the fixed-income space, US Treasury yields moderately bull-steepened as uncertainty surrounding the US-Iran deal remains high, particularly the many unresolved issues, such as Tehran’s prospective tolling process in the Strait of Hormuz and Iran’s enriched uranium stockpile. Meanwhile, in FX, the USD ended only a touch lower, per the USD Index, almost shrugging off the easing in Middle East tensions and, as of writing this morning, is on the front foot.BoJ Delivers as Expected – JPY Largely UnmovedIn a 7-1 vote, the BoJ raised the policy rate by 25 bps to 1% overnight – the highest level since 1995 – as widely expected by economists and markets. The sole dissenter, Toichiro Asada, argued that downside risks to output and employment from Middle East disruption outweighed the case for tightening on inflation grounds. The decision did little to support the JPY, which continues to trade above ¥160 against the USD – a widely watched intervention zone.RBA Hits the Pause Button After Three Rate HikesAlso landing overnight was the RBA, which unanimously voted to leave the cash rate unchanged at 4.35%. This follows three consecutive rate increases. With GDP growth slowing in the latest report and unemployment rising, this helped justify the pause. Although headline inflation eased, price pressures remain too elevated to begin easing policy at this point, I feel. The announcement triggered modest downside pressure in the AUD, but it was really nothing to write home about.Eyes on UK CPI Inflation DataTomorrow, we have the UK May CPI inflation data at 6 am GMT. Money market expectations show year-end pricing at around 30 bps of tightening, and given the data, that feels a little too optimistic to me. GDP growth has shown little sign of life of late, unemployment continues to trend higher, emphasising a softening of the jobs market, and inflation remains closer to 3% than 2%.Although economists expect YY headline and core CPI to reach 3% (up from 2.8% in April) and 2.7% (up from 2.5%), respectively, if we see further easing in tomorrow’s inflation print, this could unwind some of the hawkish rate pricing and send the GBP southbound. I would need to see inflation at least hold at current levels, or, better still, come in lower. This would unwind some BoE hawkish rate pricing and possibly influence the MPC vote on Thursday. We also have the Fed rate decision at 6 pm GMT tomorrow. However, I will include a brief primer on this event in tomorrow’s morning briefing to ensure it aligns with market sentiment.