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There was a report from Iranian media two days ago that a ceasefire was hours away and that turned out to be not true. Note that this one is from Haaretz, which is a daily Israeli newspaper. It says that the Israeli army is preparing to halt combat operations between 7 pm and midnight local time. It's currently 4:30 pm in Tel Aviv.

This is obviously good news for peace negotiations in Iran and the region.

Pete Hegseth had some tough talk today but the political signs continue to point towards some kind of deal. However the risk-reward here isn't great as I'd estimate at deal is 95% priced in with stocks at a record high and the Nasdaq on an 11-day winning streak.

Headlines:

• Markets continue to keep the faith awaiting more positive US-Iran developments
• After 5 months, the Nasdaq finally hits a new record high amid US-Iran deal optimism
• Netflix earnings is tonight. Are you holding?
• Senior Iranian Official: Fundamental disagreements continue over nuclear issues
• ECB policymaker Muller: A rate move at the April meeting cannot be ruled out
• ECB's Villeroy: April hike premature, no rush to act
• All members viewed risks to inflation outlook as tilted to the upside, ECB account shows
• Swiss franc appreciation has led to tighter monetary conditions - SNB minutes
• UK February monthly GDP +0.5% vs +0.1% m/m expected
• Eurozone March final CPI +2.6% vs +2.5% y/y prelim
• Italy March final CPI +1.7% vs +1.7% y/y prelim

Markets:

• WTI…

• Prior was +18.1

Details:

• New orders 33.0 vs 8.6 prior
• Shipments 34.0 vs 22.2 prior
• Unfilled orders -10.2 vs -4.7 prior
• Delivery times 1.7 vs 18.9 prior
• Inventories -1.9 vs 1.4 prior
• Prices paid 59.3 vs 44.7 prior
• Prices received 33.5 vs 21.2 prior
• Number of employees -5.1 vs 0.8 prior
• Average employee workweek 7.7 vs 2.8 prior

Six-months from now indicators:

• 6 month index 40.8 vs 40.0 prior
• Capex index 6-month forward 35.2 vs 25.8 prior
• New orders 45.7 vs 49.6 prior
• Shipments 40.8 vs 53.6 prior
• Unfilled orders -4.1 vs 15.3 prior
• Delivery times 2.7 vs -4.7 prior
• Inventories -0.7 vs 16.8 prior
• Prices paid 50.2 vs 53.7 prior
• Prices received 50.2 vs 38.4 prior
• Number of employees 35.9 vs 40.4 prior
• Average employee workweek 30.3 vs 24.1 prior

The survey’s…

• Prior was 219K (revised to 218K)

• 4 week moving average of initial jobless claims 209.75K versus 209.5K last week
• Continuing claims 1818K vs 1810K expected
• Prior week 1794K (revised to 1787K)

This is a good reading and while the Iran war was going on there have been a series of upbeat readings on the economy. As this report was released, the Philly Fed also handily beat expectations. Were it not for this war and tariffs, we would be talking about a very strong US economy and an AI-led boom.

The US dollar ticked slightly higher on this but trading is generally subdued today with EUR/USD down 17 pips on the day to 1.1781. S&P 500 futures are up 10 points.

Initial claims drop back to 207K after last week's pop to 218K, reinforcing the view that the…

• Prior +1.9%
• Core CPI +2.3% vs +2.3% y/y prelim
• Prior +2.4%

More to come..

• Prior +1.5%
• HICP +1.6% vs +1.5% y/y prelim
• Prior +1.5%

The jump in Italy's headline inflation is not as profound as elsewhere in the region. However, it still reflects the same characteristics with energy price inflation spiking higher. Energy price inflation was down by 6.6% year-on-year in February but now reflect a 2.3% decline only instead.

Besides that, the inflationary momentum is also supported by the acceleration in the prices of unprocessed food (+4.4% from +3.7%).

As for core annual inflation, that is seen slowing in March to 1.9% - down from 2.4% in February. That comes as services inflation sees a marked slowdown to 2.8%, down from 3.6% previously.

It's only one month's worth of reading for now and with surging energy prices, expect…

• Pakistani army chief trip to Iran helped reduce differences in some areas
• After the trip, there are greater hopes for extending the ceasefire and holding a second round of talks
• Fundamental disagreements continue over nuclear issues
• The fate of Iran's highly enriched uranium and the duration of its nuclear restrictions remain unresolved

Following a high-level visit to Tehran by Pakistan’s Army Chief, Field Marshal Asim Munir, a senior Iranian official indicated that the mediation has successfully narrowed the gap in several key areas. The trip has bolstered hopes for both an extension of the current fragile ceasefire and the convening of a second round of formal talks, potentially to be held again in Islamabad.

Despite the progress,…

• Prior 0.0%
• GDP +% vs +0.6% y/y expected
• Prior +0.8%
• Services % vs +0.2% m/m expected
• Prior 0.0%
• Industrial output % vs +0.2% m/m expected
• Prior -0.1%
• Manufacturing output % vs +0.3% m/m expected
• Prior +0.1%
• Construction output % vs 0.0% m/m expected
• Prior +0.2%

More to come..

It's wild to see how markets are running with this much optimism when we haven't seen any actual progress yet on the Middle East conflict. The fact of the matter remains that the Strait of Hormuz is in de facto closure and set to enter its eighth straight week under such circumstances.

Yet, oil prices have come off the boil by quite a mile with WTI crude hovering around $91.75 currently. Meanwhile, the more indicative "front-month" June contract is trading at around $88.15 on the day. As for Brent crude, it is keeping closer to the $95 level at the moment. However, physical prices are still holding a massive $40 to $50 premium. So, keep that in mind.

As much as markets are optimistic, the situation on the ground hasn't changed. In Asia,…

• Trump posts upbeat comments on Israel -Lebanon peace talks -"Nice!"
• Today's FX winner is Japanese Finance Minister Katayama, She's sent the yen higher.
• ICYMI - Reports that Iran proposes partial Hormuz reopening for ships via Oman waters
• Fox says its confirmed that Iran used Chinese satellite to target US bases
• Japan’s Katayama says closely watching FX as oil volatility hits yen
• Mixed China data highlight fragile recovery outlook: retail sales sad, industrial beat
• China March new home prices -3.4% y/y (February -3.2%)
• China Q1 GDP beats forecasts but Iran war risks loom
• Australia jobs resilience, unemployment rate steady, keeps RBA focused on inflation risks
• Australian March 2026 unemployment rate 4.3% (expected 4.3%, prior 4.3%)
• PBOC sets USD/ CNY…

Japan's Finance Minister Katayama has been verbally intervening today: Not once, but twice:

• Japan's Finance Minister Katayama said to intensify communication with Bessent
  • Dropping in the B word in is more forceful verbal intervention
• Japan’s Katayama says closely watching FX as oil volatility hits yen