Good morning! Being honest here, we didn't really think that this special edition of the Morning Brief would last so long, but here we are. Over a month deep into a war with consequences so massive that any other topic feels irrelevant.
More and more, people on our timeline face the unthinkable and cling to hope that since the effects of a protracted energy supply shock will be extremely massive, there surely must be a way to stop all this madness. But is there?
We welcomed Monday with yet another ceasefire rumor, but let's see if this one has any credibility in it.
Iran Tracker
#1 The Ceasefire
Ceasefire chances shot up since the rumors of talks, but we are still well below the last week's level.
As we said in the intro, people want to believe, but the reality is that there is little to believe in. It's another Monday with a dovish rumor, that feels more and more like pure market manipulation than an honest effort to end the conflict.
We shall learn more one Trump speaks at 1 PM ET, but our expectations are low.
#2 The Strait Of Hormuz
The Strait of Hormuz remains effectively closed, but as more and more countries approach Iran to cut a deal, chances of 20+ ships passing the strait in a signle day rose to 82%.
However, 40+ bracket is priced at 46%, showing that any hope of a return to normal is limited. At the same time chances of a US-led escort operation remain low:
All the ceasefire talk managed to lower the oil prices a bit, but we are still above $100 a barrel for any type of oil and it remains to be seen how long will the effort manage to keep the prices down:
#3 Boots On The Ground
It happened. We had US boots on the ground as part of CSAR operation for one of the F-15 crew that crashed over Iran.
Now we must focus on a different market - an actual invasion. With massive airlift over the weekend, combined with plenty of rumors, even ceasefire narrative didn't manage to drop the chances here:
However, it still remains to be seen what is the target of the assumed invasion, as chances of a Kharg Island one are slim:
#4 Regional Expansion
Despite the failed UN vote on the Iran war, chances of UAE involvement rose over the weekend to 24%.
Gulf countries have all the incentive to continue the war at this point and their involvement is certainly on the table. Iranian control of the strait would be a massive strategic loss for them.
At the same time, chances of Bab-el-Mandeb strait closure remain low as the Houthi are not escalating at this point:
#5 Iran Regime Fall
Left on purpose with no comment.
Wrap up
That's all for today. We are anxiously awaiting this week's developments while looking at what countries in Asia and Europe do to limit the impact of energy supply shock. More about that in PROPHET's Global Outlook.
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.