(Updates prices before European markets open)

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Asian stock markets: https://tmsnrt.rs/2zpUAr4

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Trump says Iran and Israel agree to ceasefire

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Wall St futures rise, Nikkei up 1.3%

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Dollar extends pullback, Treasury yields steady

By Wayne Cole, Stella Qiu

SYDNEY, June 24 (Reuters) - Global shares rallied and

the dollar extended declines on Tuesday as a ceasefire to end a

12-day war between Iran and Israel came into effect, while oil

prices dived to nearly two-week lows on easing concerns about

supply disruptions.

Most of the moves came after U.S. President Donald Trump

announced late on Monday that Iran and Israel had agreed to a

ceasefire. A few hours later, Trump said the ceasefire was now

in effect and urged both countries not to violate it.

Oil prices fell over 3%, having already slid 9% on Monday

when Iran made a token retaliation against a U.S. base which

came to nothing and signalled it was done for now.

With the immediate threat to the vital Strait of Hormuz shipping

lane seemingly over, U.S. crude futures fell another 3.7%

to $65.96 per barrel, the lowest since June 11 before Israel's

attacks on Iran began.

"With markets now viewing the escalation risk as over,

market attention is likely to shift towards the looming tariff

deadline in two weeks time," said Prashant Newnaha, senior

Asia-Pacific rates strategist at TD Securities.

"Our sense is that the quicker than expected resolution to

the Middle East conflict leads to expectations for a swifter

resolution on tariffs and trade deals."

Risk assets rallied, with S&P 500 futures up 0.6% and

Nasdaq futures 0.9% higher. EUROSTOXX 50 futures

jumped 1.5% and FTSE futures rose 0.4%.

The MSCI's broadest index of Asia-Pacific shares outside Japan

jumped 2.2% while Japan's Nikkei rallied

1.3%.

Two sources told Reuters that Japan's tariff negotiator

Ryosei Akazawa is arranging his seventh visit to the United

States for as early as June 26, aiming to end tariffs that are

hurting Japan's economy.

China's blue chips rose 1.2%, while Hong Kong's Hang

Seng index gained 1.8%.

News of the ceasefire saw the dollar extend an overnight retreat

and slip 0.5% to 145.43 yen, having come off a

six-week high of 148 yen overnight. The euro rose 0.2%

to $1.1603 on Tuesday, having gained 0.5% overnight.

The yen and euro benefited from the slide in oil prices as

both the EU and Japan rely heavily on imports of oil and

liquefied natural gas, while the United States is a net

exporter.

"The market was so well hedged against a major tail-risk event

to play out...the actions and the dialogue we've seen highlight

that the tail risks have not and will highly unlikely

materialise," said Chris Weston, head of Research at

Pepperstone.

Ten-year Treasury yields were mostly steady at

4.338%, having declined 5 bps overnight after Federal Reserve

Vice Chair for Supervision Michelle Bowman said the time to cut

interest rates was getting nearer as risks to the job market may

be on the rise.

Fed Chair Jerome Powell will have his own chance to comment

when appearing before Congress later on Tuesday and, so far, has

been more cautious about a near-term easing.

Markets still only imply around a 22% chance the Fed will

cut at its next meeting on July 30.

The risk-on mood saw gold prices ease 1% to $3,333 an ounce

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To read Reuters Markets and Finance news, click on https://www.reuters.com/finance/markets

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