• Meanwhile in markets, it is the TACO trade that reigns supreme. Or did President Trump’s maximum-pressure campaign successfully force a deal over the line? While media outlets squabble over the semantics of who caved, punters are jubilant that a ceasefire extension has been salvaged. The relief is clear: Brent crude has dropped below the $90 handle, while equities and bonds catch a lift;

• Although top brass have yet to formally sign off, Iranian state media report that Tehran is highly likely to approve the latest deal. President Trump flagged this weekend as the probable signing window – with Vice President JD Vance set to represent the US in Europe. Trump himself couldn’t attend – could it be that Sunday’s UFC fight on the White House lawn takes precedence?

• The memorandum of understanding both sides have agreed upon shouldn’t be seen as comprehensive peace treaty – it is a ceasefire extension with some de-escalatory steps that sets up the next round of negotiations. Under the 60-day extension, both sides will lift their respective blockades on the Strait of Hormuz and Iran will receive sanctions waivers to resume oil sales. On the critical nuclear issue Tehran has reportedly committed to never acquiring a nuclear weapon. However, the definitive resolution of the enriched uranium standoff has effectively been kicked to the next round of talks. Even so, a few options have been laid out for a potential solution including down-blending the existing highly enriched uranium stockpile inside Iran;

• Shifting to markets, Brent crude is trading around $88.42 at pixel time – marking its lowest level since mid-April. US Treasury yields are up marginally this morning but have pulled back roughly 7bps from yesterday’s highs – dragging the 30-year yield back below the psychological 5.00 percent bellwether. In equities, S&P 500 futures are hovering near yesterday’s highs while the Nikkei surged a healthy 3 percent. The broad US dollar has softened slightly, though its weekly losses remain relatively contained;

• Looking ahead, we round off the week with a few ECB speakers and the highly anticipated SpaceX IPO. Next week, all eyes turn to the FOMC. While rates will be held steady it will be far from boring. The spotlight will be firmly on Chairman Warsh's debut a, in particular his first press conference;

• Punters are yearning for signs that Warsh is prepared to do what is necessary to bring inflation under control. Should Warsh instead intend to pander to President Trump’s dovish desires, he risks provoking a market backlash. I also suspect that a less-than-hawkish stance would add extra motivation for Fed Governor Powell to stay on and block Trump from placing another dove on the FOMC;

• Next week is shaping up to be a busy one for central banks. This includes a policy decision from the Bank of Japan (where consensus is a 25bps hike) alongside the Swiss National Bank, the Bank of England and the Reserve Bank of Australia – which are all projected to leave rates unchanged;

• Nevertheless, a gradual shift toward tightening is underway. Overnight index swaps are leaning towards a 25bps hike from the Old Lady in September, while Australian cash-rate futures suggest the Bank Downunder is more likely to move in either November or December. That said, with only around 15bps of tightening priced in punters are not convinced that another RBA hike in 2026 – or 2027 for that matter – is a done deal. Turning to Switzerland, we expect the SNB to avoid any policy tightening and maintain the zero percent policy rate over the next twelve months.

‍