Capital Economics: Fragile US-Iran peace agreement is expected to reduce serious macroeconomic and market negative impact risks.

KaiTuo Macro stated in a report that the re-opening of the temporary peace agreement between the US and Iran in the Strait of Hormuz, although fragile, will reduce the risk of more serious macroeconomic and market scenarios in the coming months. Chief economist Neil Shearing expects that it will take time for oil supply through the strait to return to normal, as tankers are still not in place and production and refining facilities have not yet resumed full operations. He said that the agreement will not prevent short-term inflation from rising, nor will it protect global economic growth in the third quarter from being impacted. "The global economy may face a period of growth below trend levels in the third quarter, rather than falling into recession," Shearing said. KaiTuo Macro added that by the end of 2026 or 2027, GDP growth rates outside the Gulf countries should recover to pre-war levels of 3%.