Good morning! We were hopeful this week might be the last week of this special edition as peace talks were promising. But for now it may even take an escalation before deescalation for the war to end.
We are entering dangerous territory - if the war ends soon and the traffic through the Strait of Hormuz is restored, we might avoid a global depression. If not, the war might be the least of our problems, wherever you happen to live.
In hopes of finding positive news, let's look at what prediction markets think after the weekend.
Iran Tracker
#1 Peace
Traders are cautious about a permanent peace deal after the first round failed to produce a preliminary agreement.
Current mood is rather escalatory in the media amid reports of more airlift operations being conducted since the talks. However, we are still before market open and the small rise in the Yes price might be explained by expectation of some bullish news for the peace.
Especially since expectations are for the ceasefire to not end after 2 weeks:
#2 The Strait Of Hormuz
The Strait of Hormuz is bound to be double blocked right now as US 10AM deadline looms.
Iran threatened retaliation while traders updated their forecast of daily ship crossings:
However, the market remains volatile as traders expect some taco by the market open time.
#3 Boots On The Ground
US invasion chances remain slightly elevated after the first round of talks in Islamabad.
We already mentioned another massive airlift operation over the weekend, which makes some traders think escalation is coming. For now though all eyes are on the Strait of Hormuz. Kharg Island remains forgotten in the current discourse:
#4 Regional Expansion
Regional expansion chances remain low even as escalation looms. The rumors of an UAE aircraft over Tehran blew off unconfirmed.
Traders also begun positioning for another Monday morning taco, further decreasing the chances.
On the other side of the Arabian peninsula, chances of the Bab-el-Mandeb strait blockade increased as Houthi are expected to close the strait once the US blockade is live. We remain a bit skeptical of this prospect as Houthi have other priorities.
#5 Iran Regime Fall
Iranian regime fall chances are mostly flat on the news. Even another round of escalation doesn't necessarily mean collapse.
The regime is still proving to be resilient as it clashes with the biggest military on Earth.
Wrap up
With nothing certain now, markets are volatile responding to any new report. We shall wait for what the week brings. A lot hinges on the Monday morning taco.
We will continue to monitor the situation as the next hours and days will be crucial.
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.