• Meanwhile in markets, did you ever doubt it? Trump Always Chickens Out. While stocks and bonds have yet to fully retrace yesterday’s losses, Trump’s signature move has started a cautious rally;

• Trump’s announcement of a unilateral extension to the ceasefire grants the Iranians time to return to the table with a revised proposal. How long do the Iranians have? That’s unclear, though that may be by design – to spare Trump from another public backtrack;

• Inside Tehran, there is reportedly a struggle between moderate politicians and IRGC/clerical hardliners over what concessions can be made in a deal. Despite this internal friction, rival factions have reportedly agreed on one condition for the resumption of peace talks: ending the US naval blockade. Plus, US demands for total denuclearization must be softened. And while the White House has insisted the blockade would continue, Iranian state media are now reporting on early signals that the US is preparing to lift the blockade;

• Shifting to markets, Brent crude is trading at $97 a barrel – back below the $100 level it briefly broke above yesterday. S&P 500 futures are up over half a percent this morning, while Stoxx 50 futures are marginally higher versus yesterday’s close – though that leaves them about half a percent above session lows. US Treasury yields are down 1bp across the curve this morning, with the 2-year yield about 4bps below yesterday’s highs;

• In FX, the broad dollar is marginally lower this morning. EURUSD spiked 20 pips – to 1.176 – following the reports that the US may lift the Iranian blockade, but the cross has since retraced roughly half of those gains. The Swiss franc continues to strengthen, with EURCHF at 0.916 – its weakest level since April;

• Looking ahead, the calendar is relatively light today, though we have a large selection of ECB-speakers line up. As ever, focus will remain on Iran war developments – particularly looking for any signs of Vice President JD Vance heading to Pakistan after all as a signal that talks will resume. However, the BBC reported that the mood in Islamabad is souring as hopes of peace talks this week are clearly fading.

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