• Meanwhile in markets, punters have quickly put aside the latest WSJ reports that President Trump is mulling a quick end to the war in Iran. No surprise: according to Axios, Trump has already publicly claimed the war was near its end twelve times, starting on its third day. Brent crude trades at $114.50 a barrel – essentially on par with yesterday’s close;

• The WSJ reported that President Trump told his aides that opening the Strait of Hormuz is not a necessary condition for the US to end the conflict. This administration seems unconcerned with the Pottery Barn rule, attributed to former Secretary of State Colin Powell in warning President Bush before the 2003 Iraq war: you break it, you own it. The implication is that others – like those pesky NATO allies – can sort out the Hormuz blockade, since they rely on the Strait more than the US does;

• While the White House is hinting peace is around the corner, it is still moving more personnel and equipment to the Middle East for potential ground action. Flight tracking websites show the US is sending two brand new EA-37B electronic warfare aircraft towards the combat theatre. Their primary role is to disrupt and deny enemy communications – nifty things to have in the neighborhood if you plan on putting boots on the ground. But I wouldn’t recommend parking them too close to the front. NPR now reports that last Friday’s Iranian strikes on a Saudi airbase, which destroyed one US AWACS aircraft, also damaged a second one;

• In this morning’s commentary, we mentioned an FT story on alleged insider trading. According to the report, US Secretary of War Pete Hegseth’s stock broker tried but failed to make a multimillion-dollar investment in a defense ETF ahead of the war. That turned out to be quite fortunate for Hegseth. The ETF in question is down 13 percent since the first strikes;

• Shifting to bond market commentary, UST and Bund yields are down 1–3 bps for the day. In the US and Germany, the long end of the curve has largely avoided market turbulence, with 30-year yields little changed YTD. That hasn’t been the case in Japan and the UK: the 30-year JGB yield is up 32 bps YTD and the 30-year Gilt yield is up 30 bps – which is still 10 bps and 20 bps below their war highs, respectively;

• Moving to equites, the Stoxx 50 is up just under half a percent today, while S&P 500 futures are up nearly a percent for the day. Although AI fears are no longer front and center in equities, they still seem to linger beneath the surface. Our AI index – which includes major hyperscalers like Nvidia – is approaching bear market territory. The index is more than 18 percent below its January highs – almost double the S&P 500’s decline over the same period;

• In broader market commentary, gold is trading at $4,570 a troy ounce. In FX, the broad dollar is slightly lower today. The dollar hit its highest level since May last year yesterday against major currencies. The strength of the Swiss franc has also waned over the past week. EURCHF is trading at 0.917 – after touching 0.920 yesterday – with USDCHF trading at 0.80;

• Later this afternoon, the US detailed job openings data for February will be released, alongside remarks from several Fed-speakers and Dutch central bank President Olaf Sleijpen. Tomorrow brings plenty of data releases, including US retail sales and ISM manufacturing PMI, the Eurozone unemployment rate, and Japan’s Tankan survey.

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