Good morning! It's been a volatile week as we are hearing conflicting statements from the US and Iran. On the one hand Trump remains bullish on the ceasefire and sends Witkoff and Kushner to the region to negotiate.
On the other hand, more and more military assets and troops are being deployed to the theater. Here we prefer to trust reality rather than statements from Trump who has been rather untrustworthy when it comes to ceasefire promises.
Traditional markets still tend to trust him though. But that can't be said about prediction markets, where while we have some volatility, the prices speak a rather coherent story.
Iran Tracker
#1 The Ceasefire
Ceasefire chances continue to rise slightly this week. Traders cannot entirely discount Trump's statements.
However, the move has been rather muted as the price of Yes rose by only 10c. Considering how bullish Trump is on a month-long ceasefire to discuss his 15-point proposal, the end of April market should trade significantly above coin flip odds.
Same should be said about April 15th market, which for now trades at 38c. If anything, it's a testament to Trump's credibility.
#2 The Strait Of Hormuz
The Strait of Hormuz continues to be effectively closed, however Iran has let some ships through (those ones that paid the fee).
That being said, majority of the ships are still stranded as even with a fee, ships associated with the US, Israel and any country that is seen aiding them in any way are banned from transit.
Keir Starmer announced the UK might help the US in the escort operation, but the market didn't really react to the news, understanding complexity of such a situation:
Amid all the situation, paper oil markets dropped significantly, partly due to government interventions into them (officials deny the rumors, but we know better):
#3 Boots On The Ground
Due to ceasefire rumors chances for US boots on the ground dropped by almost 10 percentage points, but since then rose slightly and stay at around 65%.
The ceasefire narrative is countered by more US military deployments to the region. Amid conflicting statements, the market is flat since the initial Trump announcement. We imagine traders are waiting for the weekend to understand what is really going on.
Kharg Island invasion market followed a very similar pattern:
#4 Iranian Regime Fall
Iran regime fall is also flat since the news. There were no new developments to influence the market.
#5 Next Supreme Leader
Mojtaba Khamenei's chances of staying in a the Supreme Leader of Iran continue to rise, reaching almost 50%.
His position is only strengthened by the negotiations narrative. He is being well-hidden and at least until the negotiations narrative is there, there should be no decapitation strikes directed at him.
Wrap up
Despite the recent developments the markets tell us that chances for the war to end are still slim in the short-term. Both sides are even further apart than before and Trump's message is calibrated for the markets, not resolution of the conflict.
There is no consensus building in the Washington at the moment, as indicated by conflicting moves - on the one hand we have Trump with his ceasefire narrative while on the other we have continually increasing deployments to the Middle East.
Make sure to follow prediction markets live to get fresh information on the conflict. Stay strong and 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.