Good morning! We are still awaiting the Iranian response to the American peace proposal. Today it was other markets that proved to be extremely volatile, however.
Several political decisions reversed several markets from bonds to long-shots of the week. See them for yourself!
Main Events Of The Day
#1 Iran Peace
There's still no news on the Iranian response to the latest American proposal.
Traders see it as a sign of disagreement, with the Yes price for a permanent peace deal dropping from 21c to 16c. However, a return to hostilities is also down on the week, reaching 29c for a Yes share:
#2 The Strait Of Hormuz
Traders also retracted all the gains in the Strait of Hormuz traffic normalization market.
With 31c for a Yes share going into the weekend, traders see a prolonged stalemate as the base case. They seem to be aligned with energy markets, where WTI once again flirts with $100 per barrel, while Brent is over $6 above this target:
#3 Taiwan Arms Sales Halted
In a surprising move, the US has halted the sales of weapons to Taiwan.
The market had it priced as a bond on the No side. Yes shares were trading at around 1c per share just before the announcement. The official reason is inventory management with the Iran war ongoing, but the move will surely be seen as caving to China's demands.
#4 No Reconciliation Bill
The Senate and the House were supposed to vote on the reconciliation bill this week. At the last minute, unconvinced after the conversation with the acting AG, Congress went on the Memorial Day recess without taking the vote.
It is another example of a tail event happening today as traders saw a 93% chance of the vote passing only yesterday. Politics can be volatile.
#5 No Federal AI Models Review... For Now
David Sacks managed to convince Trump to postpone the executive order on the review of the frontier AI models.
The market retraced the entire move up. David Sacks said the executive order might slow down innovation. He also mentioned that the top AI labs were already cooperating with the government.
Wrap up
We had a volatile end of the week with 3 markets reversing course from bond territory. Not everyday something like that happens!
We will continue to monitor the situation on prediction markets.
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. These are only my opinions and I encourage anyone to do their own research before putting any money anywhere.