Good morning! The anxiously anticipated Trump address was a big nothingburger. No ground invasion, no details of the coming operations, but at the same time once again we heard the 2-3 weeks deadline. The same one we heard in the first week of the war.
Additionally, Trump compared the length of the Iran war with both world wars and the Vietnam and Korean war, implying Iran war might drag on.
Traditional financial markets expected a deescalatory speech and oil went above $100 on the news. Let's see how prediction markets reacted as recently they offer a more nuanced view hen it comes to macro.
Iran Tracker
#1 The Ceasefire
Ceasefire chances went down across the board as traders internalized that the 2-3 weeks of operations is only a plan.
And as it is usual with plans, they tend to take their own life when executed. Thus we've reached the lowest level yet for the chances of a ceasefire by the end of the month. And we are still unsure what the US is planning.
#2 The Strait Of Hormuz
Whatever operation is being planned, we can be sure that it will negatively impact the Strait of Hormuz in the short term.
For now the strait remains effectively closed, outside of the ships that pay the Iranian fee and are not affiliated with the US, Israel or other allies that aid the US in the current war.
Traders were also restrained when thinking about any escort operation as the chances of one grew only modestly during the speech. Which cannot be said about energy prices with WTI now being on par with Brent:
#3 Boots On The Ground
With the speech, chances of US boots on the ground rebounded, almost reaching previous highs.
Despite the American public being largely against a ground operation, the US might not have another choice. Be it an escort operation, or something else that gives the US leverage, ground troops will be essential in securing the objective.
#4 Regional Expansion
Chances of any Gulf country joining the war remain low, even as the UAE tries to force the UN to approve the use of force to reopen the Strait of Hormuz.
At the same time, the Houthi are once again threatening the closure of the Bab-el-Mandeb strait as pressure on Iran and Lebanon increases, with chances slightly up since yesterday:
It is now more likely than any ground action against Saudi Arabia, presumably because the kingdom eased its aggressive rhetoric in recent days:
#5 Iran Regime Fall
All the escalatory talk did little to influence Iran regime fall chances.
Resilient. Entrenched.
Wrap up
That's all for today. We are awaiting now the long weekend as expectations are for the beginning of round 2 to start then.
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.