•Meanwhile in markets, punters are remarkably unperturbed by President Trump’s profanity-laced demand for a ceasefire within 24 hours with the Iranians;

•You’ve probably seen Trump’s ‘outspoken’ social media outburst over the weekend, in which he threatened to obliterate Iran’s infrastructure with airstrikes if Tehran doesn’t reopen the “f******” Strait of Hormuz. He also offered an olive branch in his own perverse way, namely by praising Islam. Really;

•For the record, Trump’s deadline for Iran to cede to US demands is 02:00 CET. But, as we we’ve seen on plenty of occasions, Trump deadlines are often not final or can disappear without a trace, depending on his whim. In any case, it seems that the Iranians put the ball firmly in Trump’s court. Tehran rejected a third party-mediated proposal for a 45-day cease fire. Instead, it responded with maximalist demands for a lasting peace (US peace demands are maximalist too, by the way). So, the stage is set for Trump to follow through on his bombastic threats, or to TACO;

•Brent crude futures are trading at $111 a barrel, a bit higher than Thursday’s close and still within Monday’s ranges. More importantly, we’re still ways off from the war-high of $120 a barrel. Which, it must be emphasized, has proven to be a line in the sand for the White House;

•US Treasury yields are flattish, thereby holding on to Friday’s better-than-expected payrolls-induced increases (which were far from spectacular to begin with). The broad dollar is steady and S&P 500 futures, which were down by about 0.7 percent earlier in the day, have rebounded a bit. Asian stocks are a mixed bag, with a flattish Nikkei and a 0.7% loss for the Hang Seng. But in the greater scheme of things, markets are eerily quiet ahead of Trump’s deadline;

•If we take a broader perspective on markets, a couple of several things stand out. We’re past central bank rate hike panic pricing – for now at least. Two-year UST and Bund yields are off the highs by a basis point or ten or more. 30y bonds are still outperforming, especially in the case of the 30y Bund, which has failed to set a new high on the back of the war. Market-based measures of inflation compensation have topped out. Our preferred euro gauge, the 1y1y forward, is at 2.2 or thereabout. A level that suggests the ECB needs to do little to contain inflation – this is not a rerun of 2021-2022 yet);

•Us Europeans are breathing that sigh of relief because natural gas futures have stabilized at ‘manageable’ levels. While crude oil is trading near the highs, Dutch gas futures are roughly halfway between the pre-war level and the war-high. However, we should not forget about the inflationary effects of higher food prices via sky-rocketing fertilizer prices and shortages of fertilizers. Every time I check, Urea future prices are higher. And higher;

•Looking ahead, besides the usual Iran headline watching we will be eying US inflation figures this week, starting with the stale PCE figures for February on Thursday, then the much more important March CPI on Friday. We get the FOMC minutes of the March meeting on Wednesday, and that’s about it for this week’s rather uneventful calendar.

‍