Britain’s blue-chip stock index has hit its highest level since the first week of the Iran war, climbing to 10,701 points this morning, up 0.4%. That’s its highest level since March 3, and it’s being lifted by hopes of a US-Iran peace deal, a weaker-than-expected US employment report, and investors rotating out of chip stocks into ‘old economy’ companies. Fresnillo (+2.5%), Weir Group (+2%), and SSE (+1.8%) are leading the charge.

Dan Coatsworth, head of markets at AJ Bell, explains that weak jobs numbers would normally be a reason for central banks to cut rates, but the Fed isn’t reaching for the monetary policy scissors just yet. Still, the market is happy with the implication of no rate changes. Meanwhile, Chris Beauchamp of IG notes that the Dow Jones has been hitting record highs, and the rotation out of chip stocks is a healthy sign - though the consolidation hasn’t turned into anything more serious.

The pan-European Stoxx 600 is set for its biggest weekly gain since mid-May, and Germany’s DAX has hit a record high, up 0.7%. The drop in oil prices - Brent crude has fallen from $126/barrel in April to $72 today - has also lowered the risk of eurozone rate hikes. Analysts at Citigroup predict Brent could fall to $60 by year-end, as fundamentals reassert themselves and shipping flows normalize through the Strait of Hormuz.

However, the ceasefire remains fragile. Last weekend saw a new round of strikes, and James Hosie of Shore Capital warns that if talks stall, oil could spike back above $100. But for now, markets are enjoying the ‘bad news is good news’ routine, with weak US jobs data pushing back fears of Fed rate hikes.