Good morning! Last night we were hit with an unexpected news of a temporary, 2-week ceasefire. However, there are still many unknowns as missiles continue to fly and Israel continues its operation in Lebanon.

Despite the official announcement, many inside Israel and the US were surprised and looking at continuing strikes, it looks more like another extension of the deadline rather than a proper cessation of hostilities. Let's see then what the prediction markets think.

Iran Tracker

#1 The Ceasefire

The main ceasefire markets resolved to Yes on the announcement, but traders are not exactly sure the military action will end soon.

The market's rules specify the end of military action as a full day of no strikes from the US and Israel on Iran. Since Israel was not consulted on the ceasefire and the current rumored arrangement doesn't solve their strategic goals, there is a fairly high chance the announced ceasefire will not hold.

#2 The Strait Of Hormuz

Despite the ceasefire, Iran still has control of the strait, as specified in the initial agreement and it said it will let only 10-15 boats per day.

However, traders see a path towards a resumed traffic, for now. We are still in the early hours of the ceasefire and the initial bullishness might soon be replaced with a volatile reversal. We are monitoring the markets closely.

Energy prices reacted similarly, even if the real, hard supply of energy is still in a dire situation. We are still at price levels 50%+ higher than at the beginning of the year:

#3 Boots On The Ground

Invasion chances cratered on the news, but are still at 30% by the end of the year.

The marines are still on the way while assets are not being recalled. In reality we are a long way from official, lasting peace and we are at the same level of risk as we were on 13th of March, in the middle of massive strikes.

Kharg Island invasion chances also dropped, but they have since regained half of the move as the proposed ceasefire framework is dubious at best:

#4 Regional Expansion

Bab-el-Mandeb strait closure chances are pretty much at the same level as a week ago as Netanyahu declared Lebanon offensive is not part of the ceasefire agreement.

Iran might not agree with it and the Houthis will definitely not agree with it, thus traders quickly reversed the initial move down.

Chances of the UAE and Saudi Arabia dropped slightly though as traders see a potential deescalation as a signal to at least postpone a regional expansion of the conflict.

#5 Iran Regime Fall

Iran regime fall chances reached a new low, but still remain elevated at 19% by the end of the year.

It is probably the best indication that traders expect a lot of volatility and chaos despite a ceasefire.

Wrap up

We were a bit surprised by the announcement (as were a lot of traders) and we can already see that the ceasefire is fragile, if not purely imaginary with missiles still flying from both sides and Lebanon conflict raging on.

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.