Good morning! Last night the news hit that the Pentagon is mulling over sending another 10,000 troops to the Middle East as part of the Iran war. Since it's Friday, it will be fitting to say that we started the week with a very dovish message, that didn't really translate to subsequent developments, all of which were very hawkish.
We are once again entering the weekend with escalation in mind, so let's take a look a the prediction markets to understand what the weekend can bring us.
Iran Tracker
#1 The Ceasefire
We are entering the weekend with ceasefire chances at 40%, the lowest level since Trump's dovish message on Monday.
It's the second week in the row in which Monday brought a significant rise in ceasefire chances, due to certain narratives being pushed, only to see hawkish developments in the subsequent days that bring the ceasefire chances down.
We are already starting to see that Trump's narratives have lower and lower impact on the markets, pretty soon we shall see the same on prediction markets.
#2 The Strait Of Hormuz
The Strait of Hormuz continues to be effectively closed as chances for 20+ ships to transit the strait in March dropped to the all time low of 11%.
For a few days now there are no news on any escort operation, thus the chance sof one happening remain flat:
The combination of the above sent energy commodities higher, erasing almost all the drop that happened on Monday:
#3 Boots On The Ground
Chances for the US boots on the ground rose slightly, erasing all the effect of ceasefire talk.
Outside of more soldiers being sent to the region, there are rumors in DC that we might see first boots on the ground this weekend. However, chances are the target might not be Kharg Island, this no change in chances there as the market stayed flat on the news:
#4 Iranian Regime Fall
Chances of regime change in Iran remain elevated, but flat on this week's news.
Dual track negotiations (kinetic + diplomatic) are ongoing, suggesting no regime change can happen anytime soon.
#5 Next Supreme Leader
Mojtaba Khamenei's chances for staying in as the Supreme Leader of Iran dropped slightly below 50%.
Despite ongoing negotiations, Israel is still keen on eliminating senior Iranian leadership. However, we expect the new Ayatollah to be kept in a deep, safe place.
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.
We are entering the weekend with low expectations when it comes to peace. Rumors are, we should rather expect escalation and a big one. We will be watching closely.
Make sure to follow prediction markets live to get fresh information on the conflict. Stay strong and see you on Monday 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.