Good morning! Each day we see less and less war footage. But that doesn't mean we are out of the woods. Quite the contrary - we are hearing that more commercial ships are being hit while the US supposedly has no actual plan to open the Strait of Hormuz!
With so many unknowns, only markets can show us a reliable picture of the future.
Iran Tracker
#1 The Ceasefire
The markets have erased the entire enthusiastic rise in Yes price after Trump's speech on Monday.
We are now back to sub 50% territory when it comes to the end of April deadline as once again traders are looking towards a prolonged conflict.
#2 The Strait Of Hormuz
The Strait of Hormuz remains effectively closed while Iran has supposedly started laying mines.
However, the news seems to have hardly moved the market. The expectation of closure lies around insurance cost, risk to cargo and sailors not willing to cross fearing for their safety. And considering the main threat comes from drones, mines seem like a minor issue, especially since the US has the tech to find and neutralize them.
Additionally, with 45% chances we won't see the traffic return to normal, there's definitely some government market manipulation going around as traders priced in massive volatility in the future price of oil:
#3 Boots On The Ground
With the focus now on the Strait of Hormuz, the US forces on the ground market continues to trade around 60%.
There is no news regarding boots on the ground, however any prolonged campaign would likely include some. Senators are already talking about such a possibility. Especially after the Kurds declared they wouldn't take part in the fight:
#4 Iranian Regime Fall
Regime fall chances stabilized at 34% by the end of the year.
We stopped hearing of high-profile assassinations; in part because most of the senior leadership has already been assassinated. Those who are left, along with the replacements, are decentralized and in hiding. Chances are they won't be the point of focus anymore as it became clear that the regime is far more resilient than anticipated.
#5 Next Supreme Leader
Mojtaba Khamenei continues to be the favorite to lead Iran by the end of the year, with only 35% chances of doing so.
The prices have stabilized on the market, however we are shocked that Reza Pahlavi is so expensive on this market. Trump has repeatedly said that he doesn't see him as the next leader. Reza himself also said his home is in the US now. Hard to be a Shah after such words.
Wrap up
Situation remains extremely volatile so make sure to follow the markets live to get fresh information on the conflict. See you tomorrow for another Morning Brief!
This is not official investment or life advice. Do your own research. This are only my opinions and I encourage anyone to do their own research before putting any money anywhere.