-- The US-Iran ceasefire may be extended by up to two weeks, though it will take much longer to hammer out a complete peace agreement, Macquarie Group said in a note on Monday.
Iran took back control the Strait of Hormuz on Saturday after opening the waterway to commercial vessels on Friday. The US and Iran have accused each other of violating a two-week ceasefire announced April 7.
The US Navy on Sunday seized an Iranian-flagged vessel that tried to move past a naval blockade, President Donald Trump said in a Truth Social post.
The US is sending negotiators to Pakistan for a second round of peace talks, though Iran said it doesn't plan to participate in those negotiations. Trump told Bloomberg News Monday he's unlikely to extend the ceasefire and that the Strait of Hormuz would stay blockaded until a deal is reached.
"At the very least, the current two-week ceasefire may be extended this week for another one or two weeks," Thierry Wizman, global foreign exchange and rates strategist at Macquarie, said. "But a fully-formed peace agreement will take much longer."
The peace process is likely to be "long and jagged," based on historical precedents set by other similar deals, Wizman said.
"We don't expect that this process will be any different, and it may last several weeks, if not months, before the final contours are inked and agreed to," he said.
Financial markets were largely stable this morning, suggesting traders continued to bet on the prospect of reaching "a permanent deal within a multi-week timeframe," Wizman said.