ORLANDO, Florida, April 8 (Reuters) - World markets

soared on Wednesday and oil had its biggest fall in five years,

as investors gave a hearty welcome to the ceasefire in the Iran

war. The question now is whether this is just a mega-relief

rally, or a major turning point in sentiment.

In my column today I look at the return of 'global

imbalances', the widening current account deficits and surpluses

of major economies, that could pose financial stability risks if

allowed to go unchecked.

If you have more time to read, here are a few articles I

recommend to help you make sense of what happened in markets

today.

1. Vance to lead US delegation to Iran talks on Saturday

2. Iran war ceasefire pushes energy markets into

twilight zone: Bousso

3. Traders place large $950 million bet on oil price

falling hours ahead of ceasefire

4. Why the bond market won't bounce back to pre-war

levels

5. Fed minutes show growing openness to rate hikes at

March meeting

Today's Key Market Moves

* STOCKS: South Korea +7.5%, Japan +5% the standouts in

Asia; UK +2.5%, Europe +3.7%; Wall Street benchmarks rally 2.5%

- 2.9%, Nasdaq regains pre-war levels.

* SECTORS/SHARES: Ten of the 11 S&P 500 sectors rise -

industrials, comms services, materials up 3% or more. Energy

sinks 3.7%. Airlines, cruise operators, hotel stocks rise

sharply.

* FX: Dollar index -1%. SEK, NZD biggest G10 gainers,

+1.6%; ZAR, HUF, CLP biggest EM FX winners, up ~2%.

* BONDS: Huge rally in Europe: 2-year German, UK yields

plunge ~25 bps, 10-year yields 15-20 bps. US Treasuries more

muted, yields down 6 bps at short end. 10-year auction on the

soft side. JGBs narrowly mixed.

* COMMODITIES/METALS: Oil plunges. Brent -13%, WTI -16%

for its biggest fall since April 2020. European LNG -15%. Gold

up only 1%.

Today's Talking Points

* The ultimate TACO Tuesday

It had to be on a Tuesday, didn't it? President Donald

Trump's ceasefire announcement fired up the 'Trump always

chickens out' trades and triggered stunning moves across all

markets on Wednesday.

World stocks had their best day in a year, two-year UK and

euro zone yields fell the most in three years, and U.S. oil had

its biggest fall in five years. The euphoria was palpable, but

reality will soon set in. Think again Thursday?

* Just a minute

Minutes of the Fed's March 17-18 policy meeting show that a

growing group of officials were leaning towards raising rates,

and saw a "strong case for a two-sided" assessment of the bank's

next move. That is, the Fed could just as likely raise interest

rates as lower them.

This compares with a smaller group of "several" officials

who were open to raising rates in January. If the feared

"persistent increase in oil prices" plays out, rate cut(s) this

year should probably be taken off the table. Even if the

ceasefire holds.

* The only certainty is uncertainty

The relief across markets is palpable, and the rally may

have more room to run. But it's clear that economic conditions

are becoming increasingly volatile for investors, businesses and

households. Just take a look at the U.S. policy uncertainty

index.

Beyond the one-off spikes around certain events and the

once-in-a-century global pandemic of 2020, there has been a

structural shift higher in the index since Trump came back to

the White House. Forecasting, planning, and decision-making is

more difficult with uncertainty consistently higher. As

policymakers are also finding out.

What could move markets tomorrow?

* Developments in the Middle East

* Energy market moves

* Social media posts from Trump

* Japan consumer confidence (March)

* Poland interest rate decision

* Germany trade (February)

* Germany industrial production (February)

* Mexico inflation (February)

* US Treasury sells $22 billion of 30-year bonds at auction

* US weekly jobless claims

* US PCE inflation (February)

* US GDP (Q4, final)

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