•Meanwhile in markets, President Trump pulled off the mother of all TACOs, agreeing to a flimsy two-week cease fire in the Iran war. And, on cue, bonds and equities are soaring while crude oil prices are tanking (no pun intended);

•It turns out that President Trump’s veiled but ultimately hollow threat to use nuclear weapons in Iran yesterday was the darkest hour before dawn. If you didn’t lose your nerve and started to buy (beaten down) stocks and bonds while the market was falling on Trump’s apocalyptic allusions, you will have a great morning;

•Trump’s apocalyptic threats vis-à-vis Iran show that the man was clearly desperate and looking for a way out. That’s why he has accepted Iran’s own ten-point cease fire proposal, which was mediated by the Pakistanis;

•Key components of the ten-point deal include giving Iran control over the Strait of Hormuz – literally a toll booth for Tehran. Also included are full sanctions relief, reparations for the war damage, US acceptance of uranium enrichment to a non-weapons grade level, and include Iran’s regional proxies in the truce;

•In a statement announcing the deal, Trump described the ten-point plan as a workable basis for a full agreement. He still referred to the US’s own 15-point proposal, which is secret and rumored to include Iran giving up its enriched uranium, and limits on defense capabilities. Clearly, US and Iran positions on key topics like uranium or Iran’s right to self-defense are worlds apart. Regardless, Trump accepting Tehran’s lines for the most part shows the man’s desperation. I can’t stress that enough;

•Readers of my market comments might remember that I’ve called for a short war because of the US’ unachievable aims and utter lack of any strategic plan. And that Trump, while stupid, will not be that stupid to embark on another Vietnam (or in the present: Ukraine, from Russia’s perspective). So, I guess I am right – for now at least. The cease fire falls short of the 45-day timeframe that was floated initially. But I think Trump’s calculus hasn’t changed – he realizes he cannot remove the regime in Tehran nor capture its uranium barring a full ground invasion (which would take almost a year in preparations). So, a deal mostly dictated by the Iranians is the best thing he could get;

•Make no mistake though: the Iranians are hurting too. The economy is in tatters, inflation is soaring, there’s massive damage to infrastructure, as well as defense capabilities. Tehran has a pain threshold too;

•Turning to some market commentary, S&P 500 futures are up nearly three percent while US Treasury yields are down roughly 15bps across the curve. Asian equities are up strongly, with the Nikkei up more than five percent. Crude oil prices have taken the plunge, with Brent trading at $93 at pixel time, down from yesterday’s levels of around $110 a pop;

•Keep an eye on ECB pricing – an April hike is still priced in to some extent. ECB-speakers were already lukewarm about an April hike, and with this deal there’s no more reason to hike soon instead of waiting for new forecasts at the June meeting. Yes, the deal could still fall apart.  But, as I mentioned before, I am an optimist. Really I am;

•In FX the dollar is dumping, falling nearly a percent on a broad trade-weighted basis. Rather surprising is CHF strength, with the Swissie strengthening against both EUR and USD despite the improved geopolitical backdrop;

•Looking ahead, we have stale FOMC minutes coming up and nothing else besides your daily dose of Iran headlines.

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