Good morning! We are entering day 7 of the war and day 5 of our special coverage of the situation. There are no signs of things slowing down.
We continue our war focus as we believe that it poses significant risk to global economy. At the same time the visibility on the developments in the media is limited due to fog of war.
We believe that prediction markets offer unparalleled access to information in these difficult times, informing stranded tourists, businesses and governments on the most important issues, including ceasefire, Strait closure, oil prices and more.
Iran Tracker
#1 The Ceasefire
The ceasefire chances have somehow stabilized in the last 24 hours.
We believe the stabilization has more to do with lingering uncertainty, rather than any neutral / positive developments towards peace. On the one hand we have unfolding energy crisis, but on the other hand the reported missile strikes from Iran continue to subdue as the US and Israel continue their bombing campaign, targeting launchers.
#2 The Strait Of Hormuz
The effective closure of the Strait continues while Polymarket criterion for resolving the market to Yes (80% traffic reduction in the 7-day moving average).
We are starting to hear various reports on second-order effect industries that are starting to feel the pressure of the closure. From copper to fertilizers to helium, the potential ripple effects are uncovering.
In the meantime, we are seeing new highs in the price of oil. Traders now see 62% chance we will break $100:
#3 Boots On The Ground
Long-term chances of US boots on the ground followed the path of ceasefire prices. However, short-term prospects spiked as we hear more talks of just that in the media.
This is a repricing of the escalation path. It is no shocker considering the intensity of the ongoing campaign and the costs it is imposing on the global economy. At the same time, the Kurds are being pressured by the US, but their resistance makes traders a bit less confident:
#4 Iranian Regime Fall
The market on the Iranian regime fall is aligned with long-term ceasefire chances.
It represents 2 options: no ceasefire when regime collapses due to a civil war or a ceasefire with a new regime. However, as we progress, we should get more clarity on which option is more viable, which will decouple the trend.
#5 Next Supreme Leader
We continue to await the news on the new Supreme Leader as the internal struggle between the Ayatollahs and IRGC supposedly continues.
Now also Trump went in as a player in this struggle as he proclaimed he needs to be involved in choosing the new leader of Iran. A statement strongly suggestive of doubling down on the initial goals of the special combat operation.
Wrap up
Situation remains extremely volatile so make sure to follow the markets live to get fresh information on the conflict. 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.