Good morning! After initial hopeful reporting from Axios on Iran peace, once again a bucket of cold water was thrown at us as it turned out Iran is not that agreeable. And once again it seems that Axios is complicit in controlling the oil markets, rather than providing honest reporting.
Outside of Iran war, we have an outbreak of hantavirus, after passengers from a cruise ship, where several infections happened, flew around Europe and Africa.
Let's see though what the markets think about that.
Main Events Of The Day
#1 Iran Peace
Iran peace chances held steady at 32% even in the face of dubious reporting.
While Axios might have been too optimistic, we are now awaiting Iranian response that should come today. If anything, this is an indication that the proposal is being considered vs rejected outright. Today's response should shed more light on the whole process, but it does seem that traders are cautiously optimistic, with many whales building positions on the Yes sides across different strikes.
#2 The Strait Of Hormuz
Chances of the Strait of Hormuz traffic normalization also rose on the peace news, as well as a rumored tentative agreement to ease the double blockade gradually.
Traders are hopeful that the agreement will become reality and that the gradual opening will reach 60 ships daily. However, with chances at only 33%, plenty can go wrong.
Commodities are also down across the board on the news with all oil benchmarks below $100 a barrel:
#3 US Oil Reserves
The news also had impact on the US oil reserves level forecast. With the possible opening of the strait, traders now don't see them going below 350 million by June 5th as likely.
Recently, the US tapped into the stockpile to ease the pain of strait closure. However, some news suggest we could go lower soon so all depends on the US and Iran reaching the agreement.
#4 New Pandemic?
Hantavirus is in the headlines now, after a small outbreak at a cruise ship that subsequently spread to Switzerland, the Netherlands and possibly other African and European countries as some of the tourists on the ship took international flights.
However, traders give now only 9% chance there will be a hantavirus pandemic this year. Historically, these viruses have very low human to human transmission and a high mortality rate (up to 40%), making it difficult to spread quickly. Let's hope the markets are right here.
#5 New Frontrunner in the LA Mayoral Election
Karen Bass in now the frontrunner in the LA mayoral election after a better than expected performance during the mayoral debate.
Karen Bass is the current mayor of LA, and a Democrat. Her main opponent, Nithya Raman, is the current city council member and also a Democrat, making us think that in either case the overall outcome for the city would be very close.
Wrap up
Iran war continues its roller-coaster. We do hope it ends soon, especially if hantavirus proves to be more transmissible than expected (we do hope it's not the case!).
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.