Market News

The war continues to rage on but it looks like we're on the cusp of some form of agreement or memorandum of understanding (MOU) being signed off between both sides. While on the surface it is billed as "a deal to end the conflict", let's be reminded of what the stakes are here.

This framework agreement or MOU is mainly to set out new terms for how the conflict is going to take shape next. It is mostly to try and allow for a more peaceful transition as both sides deal with nuclear discussions next. The timeline for this "deal" is likely going to be two months or 60 days.

If there isn't any breakthrough during that period, we could see things revert back to where they were before. That or unless both sides want to keep prolonging the status…

• Gold and silver slip in Asia. Iran deal optimism offsets active US strikes ... but
• Rubio says Hormuz will open one way or another as Iran talks grind on language
• Energy price spiral forces Sri Lanka into aggressive 100bp rate rise amid rupee pressure
• BOJ's Himino reaffirms rate hike path with Middle East risk the key caveat
• PBOC sets USD/ CNY mid-point today at 6.8288 (vs. estimate at 6.7822)
• Bank of Korea preview - set to hold on Thursday (28 May) as rate hike bets build for Q3
• PM Carney says Canada and India in free trade talks across energy and agri-food
• Japan drops to third-largest creditor as China overtakes despite record assets
• ICYMI - US confirms self-defense strikes in southern Iran as Hormuz ceasefire frays
• US military confirms attacks…

Canadian PM Mark Carney says Ottawa is negotiating a free trade agreement with India, describing it as a game changer, with energy, agri-food, technology and education identified as priority sectors.

Summary:

• Canadian Prime Minister Mark Carney announced that Canada and India are actively negotiating a free trade agreement, describing the potential deal as transformative for Canadian workers and businesses
• Carney said he met Indian Commerce and Industry Minister Piyush Goyal to review progress and explore opportunities in energy, agri-food, technology and education
• The announcement signals a renewed push to diversify Canadian trade relationships at a time of significant tension with the United States over tariffs and economic sovereignty

All is not quiet in Iran, loud explosions reported via multiple media sources.

Markets are focused on the good news out of negotiations right now. Nevertheless, conflict continues.

With much of the trading world on holiday Monday it looks like that can continue.

A light data and event agenda here in the time zone today.

• US and Iran plan to open the Strait of Hormuz in about 30 days
• Crude oil extends lower and stalls the fall at a trend line target
• Meanwhile.. Israel and Lebanon hostilities may be moving to a reescalation
• Al Arabiya: Iran is demanding highly enriched uranium be transferred to China
• Iran top negotiator, foreign minister in Doha to work out deal to end conflict - report
• How close are we actually to a US-Iran endgame?

With London and U.S. markets closed for the holiday, trading activity was lighter across the major stock indices and debt markets. As a result, the primary focus for investors shifted squarely toward developments surrounding the conflict in Iran and the ongoing diplomatic efforts aimed at preventing a broader regional escalation.

Both…

More chatter in a fluid situation:

• Plan is to open the Strait of the Hormuz in around 30 days.
• Mines would be cleared
• No tolls on ships going through
• Ceasefire would be extended for 60 days.

The nuclear part of the deal and the rescinding of sanctions are more challeging items that would need to be negotiated BEFORE there is increased hostilities.

Another report outlined that Trump administration would support military escalation of Israel's actions against Hezbollah in Lebanon. That may not go over so well with Iran.

Crude oil moved to a low at $89.41 and below the upward sloping trend line. The next target is at $88.66 the low from May.

Although US stock exchanges are closed the e-mini S&P futures are trading up by 0.98% at 7564.50 and…

While the US and Iran continue to pursue diplomatic negotiations, the ongoing conflict between Israel and Lebanon remains a major threat to any broader peace effort in the region. Reports continue to surface that forces in Lebanon are targeting Israel Defense Forces (IDF) positions, increasing tensions along the northern border. In response, Israel is reportedly considering easing some of the constraints tied to the current ceasefire agreement.

The groups operating out of Lebanon are widely believed to be backed by Iran, adding another layer of complexity to the negotiations. As a result, any escalation by Israel — particularly a renewed bombing campaign in Lebanon — could quickly undermine fragile diplomatic progress between the US and…

Al Arabiya is reporting, citing “high-ranking sources,” that Iran is demanding its highly enriched uranium be transferred to China as part of ongoing negotiations. The report adds that Iran is willing to remove the highly enriched uranium from its own territory, which on the surface could be presented as a step toward de-escalation and compromise.

However, moving the uranium from Iran to China would likely not be viewed by the US or its allies as a complete or reliable solution. The issue is no longer just about where the material is physically stored, but about verification, control, transparency, and long-term trust between the sides. Once the circle of trust is broken, the circle of distrust quickly takes over — and that force can…

The headlines are stating that Iran's top negotiator, also parliament speaker, Ghalibaf and foreign minister Araghchi are in Doha to meet with Qatar's prime minister over a potential deal to end the conflict. Again, I would be remiss if I didn't point out that "potential deal to end the conflict" doesn't exactly mean a final deal between both sides. This is all merely alluding towards a peace treaty as part of a broader framework agreement or memorandum of understanding.

Reuters also reports that the discussions in Doha will center around the Strait of Hormuz and highly enriched uranium. Adding to that, Iran's central bank governor will also be attending the meeting to discuss the potential release of frozen funds as part of an eventual…

The start of the week is filled with murmurs about a US-Iran deal and some form of agreement. However, what exactly does that entail and what is it really all about? Or better yet, what exactly is it going to lead to? Market players are optimistic in wanting to hear good news but the reality of the situation is that we might not even be close to a US-Iran endgame at all.

Let's take a look at where we are at right now and break things down accordingly.

US and Iran are ironing out details and have "agreed" on various issuesNow, this is all very vague sentencing I must admit. While both sides are claiming that they are progressing, the major thing to scrutinise is what exactly are the things that they agreeing on. And in that lieu, I would say…