Good morning! The weekend was a bus one. We had new rumors of an imminent peace deal in Iran. However, as the weekend came to an end, the urgency of the narrative dropped. We are still awaiting new news of progress.
Outside of the Iran war, US is still projected to draw down the SPR below 350 million barrels. If there weren't enough crises for the Trump admin, Powell cemented his decision to stay on the Board of Governors.
Lastly, we will take a look at the Enhanced Games, which results were a bit surprising.
Main Events Of The Day
#1 Iran Peace
This weekend was a volatile one. Rumors of an imminent deal, confirmed by Marco Rubio, sent the market to over 70c for a Yes share.
However, as time went on, Trump changed his rhetoric and started to signal that the process might be a bit longer. This sent the short-term market lower as we are waiting for more rumors to emerge. This is a market that trades purely on rumors, as there is nothing else.
In the meantime, the war is not projected to restart in the near term with chances for it by the end of the month hitting 22%:
#2 The Strait Of Hormuz
Initially the market took the deal news enthusiastically. However, the leaked deals involved a 30-day window to negotiate the Strait of Hormuz issue.
This detail cooled the market a bit. We are still above the last week's levels though, with the chance for traffic normalization at 50%. Energy markets are also bullish a deal. Oil is down to $90 per barrel:
#3 US Crude Oil Reserves Projection
Even with an imminent deal, the market still sees 66% chance we will see US oil reserves below 350 million barrels.
We are on a good track to beat that number. Even if the strait opens, there is still a huge backlog that would need to be filled. That's why the drop-off in price wasn't very steep.
#4 Powell Is On The Legacy-Building Mission
It's now official. Kevin Warsh is the new Fed Chair, but Powell decided to remain on the Board, defying the old tradition.
This act confirmed Powell's intentions to stay on and protect the independence of the Fed. Now, there is only 41% chance he will leave the Board by the end of the year. Many expect he will stay for the rest of his term as Governor.
#5 The Flop Of Enhanced Games
This weekend we also saw the first (and last?) edition of the Enhanced Games. The games allow athletes to use all kinds of doping. Traders were expecting many world records to be broken.
However, only 1 world record was broken, in a 50m swim. The new record shaved-off only hundreds of a second. One must wonder what did the games prove; did they show that genetics is still key? Or did they show that Olympic athletes are also doping?
Wrap up
That's all for today!
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.