Asian Session: Markets See U.S.–Iran Deal Getting Closer Despite Fresh Strikes Asian markets traded in a strange but telling environment on May 26: military action and diplomacy happening at the same time. Instead of pricing in escalation, traders increasingly interpreted this as a sign that a final deal may be getting closer. Hormuz Developments U.S. forces reportedly targeted two IRGC mine-laying vessels in the Strait of Hormuz and destroyed a missile site near Bandar Abbas. Iran responded by launching anti-ship cruise missiles toward U.S. naval assets. CENTCOM described the actions as defensive and said the ceasefire technically remains intact. Explosions were reported across Bandar Abbas, Sirik, and Jask. Markets appear to be reading this “fight while negotiating” setup as pressure tactics ahead of a deal, not the start of a wider war. Oil, Gold, Dollar Oil recovered slightly after Monday’s nearly 7% drop, but gains stayed limited as conflict headlines returned. A source said Qatari mediation made progress on Iran’s frozen assets, with a possible announcement as early as Tuesday. Trump also appeared to soften his stance on Iran’s enriched uranium, suggesting monitored destruction or third-country transfer could be acceptable. That removed one of the biggest obstacles. Gold and silver slipped in Asian trading. The U.S. dollar firmed slightly while equities saw mild pressure. Asia Policy Signals BoJ officials kept the rate hike path alive, though Middle East risks may affect timing. PBoC fixed $USDCNY at 6.8288 — strongest since Feb 2023. Sri Lanka unexpectedly hiked rates 100bps to fight energy-driven inflation. Market View Current pricing suggests traders believe diplomacy is winning over escalation. Fragile ceasefire. Real negotiations. High headline risk. Doha now matters more than the battlefield. #USIranDealStandoff