Good morning! We are nearing the weekend, and thus a possible breakthrough either way. Come Friday market close, we shall see either renewed push of the ceasefire narrative, or an escalation.
Trump famously loves to escalate over the weekend as the markets are closed and he has 2 days to fix the narrative. Will it happen this time? We'll see, based on what prediction markets tell us.
Iran Tracker
#1 The Ceasefire
Since yesterday, ceasefire chances dropped from 51% to 44%, making a resolution to this conflict less likely than not by the end of April.
Part of the move can be explained by continuation of the hawkish narrative in the media. The rest can be explained by no news on the diplomatic track. Ultimately, prices hovering around 50c indicate that there is still a lot of uncertainty, with clarity expected in the next 4 days.
#2 The Strait Of Hormuz
We are nearing end of March and with the Strait of Hormuz being effectively closed, chances of 20+ ships passing the strait in a single day by the end of the month dropped to 14%.
Traders expected to see some headlines about either increased traffic that is approved by Iran or an escort operation. For now we have neither and the market is adjusting sharply to the reality on the ground:
With no progress on any issue, energy prices start to go back up:
#3 Boots On The Ground
Chances for US forces on the ground continue to rise after a Monday drop as recent hawkish messages include taking over Iranian islands.
Marines and / or 82nd Airborne Division would be necessary for such an action, be it Kharg Island (in plans, but seemingly less likely), or other islands, including UAE / Iran contested land:
#4 Iranian Regime Fall
Amid all the uncertainty the regime survival chances improved this week.
A recent small rise can be attributed to Israel eliminating IRGC Naval Commander responsible for the Strait of Hormuz blockade. However, by now most traders realize that the Iranian regime is bigger than 1 person (or even hundreds of persons).
#5 Next Supreme Leader
For the first time since we started covering this market, Mojtaba Khamenei has more chances than not on staying in as the Supreme Leader.
Considering that the diplomatic track is now open, the US and Israel might not be willing to jeopardize any progress by eliminating the core of the current senior leadership. At least till the effort is being pushed, Khamenei junior might feel relatively safe. Relatively, because at least some factions on the US / Israel side might want to press on the regime change goals despite global blowback.
Wrap up
Since yesterday hawkish narratives are back. Ceasefire chances dropped again below 50% and US boots on the ground are more and more likely. All the while the Strait of Hormuz remains effectively closed and first Asian economies start to experience massive blowback.
From Australia where over 500 gas stations run out of diesel, to Philippines where national energy emergency was issued due to quickly depleting oil reserves and no obvious replacement.
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.