Middle East ceasefire protocol drives Asian stock market rise, BTC breaking through $106,000 leading encryption market Rebound

Gate News, according to Bloomberg, as the ceasefire protocol between Israel and Iran seems to be holding, and US bond traders increase bets on a US rate cut, Asian stocks edged higher.

The MSCI Ming Sheng Capital International Asia Stock Market Index rose 0.3% on Wednesday, following a 2% increase after U.S. President Donald Trump announced a ceasefire between two Middle Eastern rivals the previous trading day. On Tuesday, the S&P 500 rose 1.1%, the Nasdaq 100 rose 1.5%, hitting a record high for the first time since February. U.S. stock index futures are basically flat.

U.S. Treasuries and the U.S. Dollar Index stabilized. On Tuesday, the yield on the benchmark 10-year Treasury note fell by 5 basis points. Prior to this, Federal Reserve Chairman Jerome Powell stated that there are “multiple paths” for monetary policy, with data showing weakening consumer confidence. As the recently reached peace protocol remains fragile, traders continue to closely monitor the situation in the Middle East. Following President Trump's fierce criticism of Iran and Israel's early default behavior, both parties seem to be adhering to the protocol.

At the same time, the cryptocurrency market has also seen a rebound, currently stabilizing. As of the time of writing, the performance of major cryptocurrencies is as follows:

BTC is currently trading at $106,219, up 1.1% in the past 24 hours;

ETH is currently trading at $2,434.68, up 1.1% in the past 24 hours;

XRP is currently trading at $2.18, with a 24-hour increase of 0.8%;

SOL is currently trading at $145.67, with a 24-hour increase of 1.3%.

"Geopolitical risks have abated, but at the moment, it appears that the ceasefire protocol is not unbreakable," said Tim Waterl, chief market analyst at KCM Trade in Sydney. "The ceasefire protocol provides a case for risk assets to move higher again, albeit in a slightly tentative way."

(Source: Bloomberg)

Oil prices rebounded after hitting their largest two-day decline since 2022, as traders evaluated the ceasefire protocol and an industry report indicating another drop in US crude inventories.

The US dollar weakened against most major currencies. Asian currencies such as the Philippine peso and the Indonesian rupiah strengthened for the second consecutive day. The Australian dollar fluctuated after monthly inflation data fell short of expectations.

Before Powell's speech at the House Financial Services Committee, the Fed decided last week to keep interest rates unchanged. Although the Fed chairman largely maintained his previous call for patience during the economic digestion of trade tariff impacts, he indicated that declining inflation and weak labor recruitment could lead to an early rate cut.

"If inflationary pressures are indeed under control, then we will cut interest rates as soon as possible," Powell told lawmakers in response to questions about the possibility of a rate cut in July. "But I don't want to specify which meeting. I think we don't need to be too hasty, because the economy is still strong."

The currency market has fully digested the expectation of two interest rate cuts by the Federal Reserve by the end of 2025, with a much higher likelihood of the first rate cut in September than next month, although the expectation of a rate cut in July has increased compared to last week.

Nomura Holdings Asia Pacific stock strategist Chetan Seth said on Bloomberg TV, "The Fed may wait for more data points before actually cutting interest rates. I think unless they have more evidence to support a rate cut, they won't make a commitment."

Minneapolis Federal Reserve Bank President Neel Kashkari said that while recent inflation data has been "fairly positive," officials need a clearer understanding of how tariffs will affect prices. New York Federal Reserve Bank President John Williams said that keeping interest rates unchanged to analyze the impact of policy changes is "completely appropriate." Federal Reserve Board Governor Michael Barr said he expects tariffs to boost inflation and expressed support for a wait-and-see approach to interest rates.

Cleveland Federal Reserve Bank President Beth Hammack said policymakers may keep borrowing costs stable for a while. Meanwhile, Boston Federal Reserve Bank President Susan M. Collins said a moderately restrictive stance is necessary.

On Tuesday, Trump seemed to undermine the long-standing US sanctions on Iran, allowing Iran's largest customer China to continue buying Iranian oil, a move that surprised oil traders and government officials as he sought to strengthen the ceasefire with Israel.

In Asia, the Bank of Thailand is expected to maintain its policy interest rate stability. South Korea's efforts to achieve developed market status suffered a setback as MSCI decided to keep Korea in the emerging market category after evaluation. Indonesian Finance Minister Sri Mulyani Indrawati emphasized that the government will focus on enforcing fiscal discipline while implementing the president's priority projects.