Good morning! Today we are moving towards a more general selection of markets we cover. While Iran will retain daily coverage (as it is the most important global event currently), it will be contained to a couple of points.
The situation globally remains extremely dynamic. The US announced an escort operation lite, involving advice and potential assistance for ships trying to cross the Strait of Hormuz. At the same time, Iran is tightening its closure, with kinetic actions agains the US Navy rumored, but denied for now by the US military.
Outside of that, we had some moves on the Fed market, as well as new potential LLMs from top labs. Take a look at the markets!
Iran Tracker
#1 Peace
Peace remains elusive as chances of one by the end of May reached 18%, the lowest level ever.
While the tensions are high, impacting peace prospects, a return of hostilities is also unlikely as traders give only 40% chance by the end of the month for Iranian airspace closure. Last time Iran did this, was on February 28th, making this market a good proxy for the restart of hostilities:
#2 The Strait Of Hormuz
The Strait of Hormuz remains effectively closed as both sides are trying to tighten their blockade.
US announcement of project operation freedom mentioned above did nothing to market prices, indicating traders have no faith in its effectiveness to open the strait.
Energy prices also remain high, showing alignment between prediction markets and traditional finance:
#3 Defiant Powell
Jerome Powell surprised everyone by deciding to stay at the Fed Board after his term as chair ends, defying the long-standing tradition.
Powell cited Trump's legal challenges as his main reason, however everyone realizes he will do this to build his legacy as defender of Fed's independence. This is yet another issue for Trump, who's been trying to lower rates since he assumed office. Kevin Warsh will now have an especially hard time assuming authority and building consensus in a highly divided Fed.
#4 New Gemini Model Coming?
There are new rumors that a new Gemini model is coming very soon.
Google has been trailing both Anthropic and OpenAI as these 3 labs are trying to assert dominance on the LLM market. Google has been behind its competitors especially when it comes to coding capabilities.
#5 Update To Claude?
Anthropic has recently been on a roll as its coding tool gained massive popularity.
However, recently, Codex by OpenAI has also gained some cult following as 2 labs are battling to capture the coding market. We are not sure what moved the prices from close to 10% to 37%, but we will follow the market for updates.
Wrap up
Iran war remains central to the global situation. However, between Powell's announcement and new AI models, we have plenty of moves on the markets.
We will continue to monitor the Iran situation as it develops.
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.