• Meanwhile in markets, the US has put itself in a bind. Tehran has the Strait of Hormuz in a chokehold, underscoring how ill-prepared President Trump’s attack on Iran is;

• OSINT X accounts report three Kuwaiti Eurofighters have been destroyed and provide satellite images of a Kuwaiti airbase battered by strikes. Israel claims to have neutralized two-thirds of Iran’s launchers. That suggest the progress has stagnated – rising slightly from sixty percent last week – as the remaining equipment is becoming increasingly elusive. Western nations have been hit too: a French soldier was killed in a strike on an Iraqi base last night and a US refueling plane went down following a reported midair collision;

• Clearly emboldened by their success in Venezuela, the US entered Iran without a single strategic objective or an exit plan. Reuters reports the ‘TACO’ faction – led by Chief of Staff Susie Wiles and Deputy Chief of Staff James Blair – are now urging Trump to declare a quick victory as surging gasoline prices threaten to alienate voters. While formal polls do not show a major shift yet, Polymarket predict the Democrats will win a clean sweep in Congress during the November Midterms. Before the conflict, the Dems were only set to win the House of Representatives;

• Moving on to some market commentary, Brent crude is trading just above $100 a barrel, up marginally for the day. In our neck of the woods, Dutch TTF gas prices sit nearly €20 below Monday’s highs, though that means they’re still 60 percent above pre-war levels;

• In FX, the dollar has risen half a percent against major currencies today – reaching its highest level since November. EURUSD has fallen to 1.14 – the lowest level since late July – and USDJPY has risen to 159.5 – the highest level in two years’ time. The greenbacks momentum even outpaces that of the Swiss franc. USDCHF is up two and a half over the past month;

• Shifting to bond markets, US Treasuries and Bunds are holding near post-conflict lows today. At the same time, periphery-Bund spreads have widened further – reaching their highest levels in months. Italian, Spanish, and Portuguese Bund spreads all broke above their 200-DMA’s this session;

• Equities face another red day as the Stoxx 50 is down over half a percent and S&P 500 futures continue to extend yesterday’s losses today. While both indices remain above Monday’s lows, they have now erased all year-to-date gains. The Stoxx 50 is down a percent and a half in 2026 but still outperforms the S&P 500, which has fallen over two and a half percent;

• Looking ahead, this afternoon features the release of US job openings alongside January’s PCE income, spending, and inflation data. There is plenty to look forward to next week; we’re set to have a full-on central bank bonanza. On Wednesday we have rate decisions of the FOMC and BOC while on Thursday it is the turn of the ECB, BOE, BOJ, SNB, CNB and the Riksbank.

‍