(Updates after Strait of Homruz news)

* Iranian Foreign Minister says Strait open while

ceasefire in place

* Brent tumbles 9%

* Stocks jump, Europe's STOXX 600 up 1.4%, S&P futures up

0.9%

* 10 year Treasury yeild falls 7 bps,

* Two-year British gilt yield falls 15

*

By Alun John

LONDON, April 17 (Reuters) - The price of oil tumbled

and stocks and government bonds rallied on Friday after Iran's

foreign minister said that the Strait of Hormuz was open for

passage while a ceasefire is in force.

Abbas Araqchi said in a post on X that passage for all

commercial vessels through the Strait of Hormuz was declared

completely open for the remaining period of ceasefire, in line

with the ceasefire in Lebanon.

The price of benchmark Brent crude futures tumbled to $90 a

barrel, down 9% on the day, U.S. crude fell 10% to $81.5 a

barrel.

While still above pre-war levels, that is down significantly

from late March's highs, which, for Brent, were close to $120 a

barrel.

Stocks around the world, which had already been trading

around record highs, jumped further on the news. Europe's broad

STOXX 600 was last up 1.3% having been close to flat before the

announcement, S&P futures were 0.9% higher.

"If we move to a situation where the path is still towards

de-escalation - but we now have the bonus of commodity flows

through Hormuz getting back to something resembling a normal

level that we saw pre-conflict - then that's obviously removing

a pretty chunky tail risk for the economy," said Michael Brown,

senior research strategist at Pepperstone.

"I think that's why markets are reacting so positively."

Government bonds also rallied, with the benchmark 10-year

Treasury yield dropping 7 basis points to 4.23%, its lowest

since mid March.

Unlike stocks, which had already regained their pre-war

highs in the United States and many other markets, bonds have

yet to do so.

European bonds have sold off more than U.S. ones since the

war began as the impact of higher energy prices had traders

rushing in to price rate hikes from the European Central Bank

and Bank of England.

On Friday they were outperforming as those rate cut bets

were pared back.

Germany's 10-year yield fell 8 basis points to 2.96%, while

the rate sensitive two-year yield fell 10 bps to 2.42%.

Britain's two-year yield fell 15 bps to 4.10%.

The dollar also slid, falling 0.6% to 158 yen, while the

euro was up 0.6% at $1.1848, a two-month high.