•Meanwhile in markets, with punters waiting anxiously for US-Iran talks in Islamabad tomorrow morning local time, now is the right moment to take stock of the truce;

•The truce-induced relief rally is mostly intact, though equities are a tad more optimistic (or less pessimistic) than bonds. Brent crude oil futures have managed to stay below the key $100 level. With the war dictating moves in the near term, we can only wait for the inevitable next batch of headlines;

•So, what about the truce? I want to start with the stuff that the headlines and the algos don’t pick up. The stuff that is glaringly obvious to any rational human being, but not to a machine. The attacks on Iran and the Gulf have stopped. On Wednesday, there were piecemeal Iranian attacks on the Gulf states. But there are no reports of such attacks today. And yesterday was quiet too – if memory serves me well. Furthermore, following US pressure on Israel – it was pretty obvious that President Trump would not allow Prime Minister Netanyahu to ruin his truce – IDF attacks on Lebanon have come down a lot today compared to yesterday. So, that’s all quite positive;

•Now for the negative part. The Strait of Hormuz remains locked shut. If there’s any merchantmen traffic, it’s only a trickle (a trickle, trickle, trickle). Predictably, Trump took to Truth Social to complain about Iran not living up to its end of the bargain. But he did so in a polite way – no foul language this time. Bullish, no?

•So, tomorrow a cliffhanger event in Islamabad? I don’t think so. Probably the only thing the Americans and the Iranians can agree on at this point is to stop the fighting. The US has a 15 points proposal, Tehran has 10 points – disagreements left and right. You get the picture. Look for an outcome along the lines of we stop shooting at each other and keep talking. Nothing more, nothing less;

•And speaking of wars, like a bolt out of the blue, Ukraine and Russia could reach a peace deal soon according to a report by Bloomberg. That’s not just the Orthodox Easter truce that both sides have announced. Ukraine’s spymaster and all-round Grey Eminence, Kyrylo Budanov, told Bloomberg in an April 4 interview (only released this morning!) that he see a peace deal with the Kremlin soon. In the wake of the headlines, European defense stocks plunged, with Rheinmetall falling nearly four precent. Our proxy for peace in Ukraine, RBI, was up four percent before being halted for volatility;

•In broader markets, the Bloomberg report is taken in strides, with the Stoxx 50 recording only a modest gain of 0.4% and a marginal uptick in S&P 500 futures, which are by and large flattish for the day. US Treasury yields are flattish too, as are Bund yields;

•Pricing for the April ECB continues to sag, on bp a day. I clock the ESTR for that meeting at 2.009. That meeting will be a hold (I am a peace optimist);

•Looking ahead, eyes will be this afternoon’s US CPI release. Plus, the usual Iran-headline watching. We have crucial elections in Hungary and Peru on Sunday. Key events next week include a host of central bank speakers because of the IMF/World Bank Spring Meetings in Washington. The data docket is mostly empty next week, with the focus on US PPI and Chinese monthly trade data.

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