• Meanwhile in markets, as the US-Iranian ceasefire has come under pressure, so has the relief rally;

• The shooting phase of the war between the Iranians and the US may be on pause, but Israeli strikes in Lebanon escalated yesterday. Iran claims their 10 points plan for a ceasefire covers Lebanon – something denied by Prime Minister Netanyahu. For the time being, the Strait of Hormuz remains blocked, with some Iranian media suggesting it will stay closed until the Israeli attacks on Lebanon cease. Vice President Vance, commenting on the Israeli attacks, advised the Iranians against walking away from the peace talks over Lebanon, which he claims isn’t part of the truce. But at the same time, if you read between the lines of his remarks, Vance is inclined to pressure the Israelis to hold back their fire with regards to Lebanon;

• The US and Iran hold direct peace talks in Islamabad tomorrow. Vance will lead the delegation – he reportedly was the leading voice against the war – but of course he will be joined by special envoy Steve Witkoff and President Trump’s son-in-law Jared Kushner;

• Moving to bond markets, we’re seeing a partial reversal of yesterday’s moves. The 10-year US Treasury yield is 6bps above yesterday’s lows and the 2-year yield is up 7bps – though both are holding steady this morning. Bund futures are also flat this morning. While Bund–periphery spreads narrowed yesterday, the 10-year Bund spread with Baltic nations has widened – Latvia by 8bps and Lithuania by 5bps. The move may reflect President Trump’s threats to NATO, angered by a lack of support in Iran, or Russian threats against the Baltics after recent Ukrainian drone strikes on Russian oil infrastructure used Baltic airspace to get there;

• Shifting to energy, Brent crude is at $96 a barrel, up $6 from yesterday’s lows, while European natural gas trades at €46 per MWh, €3 below yesterday’s lows. Both, however, remain well below Tuesday’s levels;

• Energy prices may be off their highs, but not all commodities hit by supply constraints in the Strait of Hormuz followed. Aluminium has gained 17 percent year-to-date – declining slightly from a 20 percent peak – while Urea – an essential nitrogen-based fertilizer component – continues to trade at its highs. Though helium lacks a transparent spot/futures price, our market proxy – a helium exploration company called Helix Exploration – provides a signal that markets are less bullish on helium. Helix’ stock price dipped by seven and a half percent yesterday after a massive sixty percent surge since the war in Iran started in March;

• Touching on some broader market commentary, Stoxx 50 futures are marginally lower today while S&P 500 futures are down just under a quarter of a percent.  The broad dollar is flat this morning, with EURUSD at 1.165 – half a cent below yesterday’s highs;

• Looking ahead, today’s calendar is light, with the National Bank of Poland’s rate decision – consensus a hold – alongside US PCE income, spending and inflation data for February. Tomorrow brings US CPI inflation data for March, but all eyes will be on any updates on US–Iran negotiations in Islamabad. Over the weekend, attention turns to Hungary’s contentious elections.

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