• Meanwhile in markets, Europe is not exactly providing much excitement to make up for the closed US markets. That does not mean nothing is happening – Bund yields have moved off their recent lows – but for the cause we once again have to look towards the Middle East;

• US and Iranian delegations cancelled their flights to Switzerland at the last minute today. In Switzerland they were scheduled to begin negotiations on a nuclear agreement that would allow them to establish a more permanent peace deal. The talks have now been postponed – thanks to a fresh flare-up in clashes between Israel and Hezbollah in southern Lebanon. The flare-up marks the most intense bout of fighting since the ceasefire extension was agreed to last week – temporarily sending Brent crude back above the $80 mark;

• Tehran has made it clear that peace between the US-Iran is directly tied to peace in Lebanon. It is worth noting that Iran has not responded by moving to re-close the Strait of Hormuz at the first sign of trouble – it is giving diplomacy time. We remain convinced that President Trump will not allow Israel to derail his peace push. Vice President JD Vance – the key architect of the ceasefire extension on the US side – has openly vented his frustration with Israeli politicians lobbying against the agreement – sending a warning that the United States is Israel's only powerful ally;

• In the US, war hawks such as Republican Senator Lindsey Graham have tied Vice President Vance closely to the ceasefire agreement – a maneuver which could damage his potential 2028 presidential bid if the deal blows up. However, a successful peace deal could just as easily become a political asset – and betting markets appear to agree. Earlier this month, Vance lost the lead in Polymarket’s “Presidential Election Winner 2028” market for the first time – falling behind California Governor Gavin Newsom and Secretary of State Marco Rubio. But since the deal came into effect Vance has reclaimed the lead. Nevertheless, with his odds at 18 percent Polymarket punters are hardly showing overwhelming conviction in their bets;

• Ultimately, the Democratic Party remains the favorite to capture the White House in 2028 – with odds at 59 percent. Still, the race for who will be their candidate is far more open – a race that will only truly begin after the November midterms. Speaking of the midterms, betting markets remain confident that Democrats will reclaim a majority in the House of Representatives this fall. The Senate contest looks far closer. The odds of Republicans retaining their majority has been ticking higher over the past weeks – now sitting at 56 percent;

• Turning to some market commentary, Bund yields are up roughly 4bps across the curve this morning. The Stoxx 50 is only marginally higher from yesterday’s close, though that still leaves it at a fresh all-time high. In FX, EURCHF has finally broken above its 200-DMA – trading at 0.923 at pixel time;

• Looking ahead, the calendar is bone dry this afternoon. Next week is also to be quiet with respect to major data releases, though we have a sizable slate of Fed- and ECB-speakers that will keep our feeds well filled.

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