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President Trump spoke with the New York Post in some comments that are hard to interpret. He seemed to indicate that the US was negotiating with Iran's parliamentary speaker, someone who was reported dead on the weekend but has continued to tweet frequently, including about market moves.

Asked about Iran Parliament Speaker Mohammad Bagher Ghalibaf, he encouraged Iran to make a deal before it's too late.

“We’re gonna find out,” Trump told The Post. “I’ll let you know that in about a week.”

That corresponds with the April 6 deadline Trump set. However the market isn't sure how seriously to take that timeline given that he's extended it twice already.

Trump also leaned into the regime change rhetoric, which is an odd one given that the Supreme…

S&P 500 futures were up 50 points shortly before the open, but that's faded to just +5 shortly after the open.

The drop in stocks has come as oil prices have ticked back higher. WTI crude is up $2.96 to $102.56 and that's now just 80-cents from the session high.

Given the threats from Trump, there is the threat of the destruction of Iran's oil industry, and the corresponding attacks by Iran on its neighbour's facilities. That would plunge the world into crisis as there is no way to bring those barrels back or replace them.

Despite rising oil, the bond market is increasingly seeing a flight to safety. US 10-year yields are now down 9 bps and near a session low at 4.35%. There is an argument for looking beyond the oil shock towards the growth…

• Prior was +0.2
• New orders +6.1 vs +11.8 prior
• Prices paid 32.7 vs 31.7 prior
• Employment -1.0 vs +7.5 prior

The surging energy market is undoubtedly a boom for Texas, even with the associated inflation headwinds. However it's going to be tough to pull the trigger on fresh drilling unless executives feel that the war will continue.

The comments in the report might be more representative of how higher energy is hitting the broader economy:

Beverage and tobacco product manufacturing

• We have seen decreases in some of our costs, in particular agricultural raw materials. We have seen increases in the costs of our packaging materials, some of this related to increase in energy costs. We expect the Iran war to cause increases in energy costs for…

The mood is positive in US markets so far this week as Trump talks about a de-escalation.

The messages are mixed though and that's leading to some confusion. The oil market remains 1.8% higher but US stock futures are up 0.8% and Treasury yields are down 5-7 bps across the curve.

Trump tweeted about negotiations, much as he did last week, but this time the pop in US stock futures was fleeting.

The United States of America is in serious discussions with A NEW, AND MORE REASONABLE, REGIME to end our Military Operations in Iran. Great progress has been made but, if for any reason a deal is not shortly reached, which it probably will be, and if the Hormuz Strait is not immediately "Open for Business," we will conclude our lovely "stay" in Iran…

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• Prior +1.9%
• HICP +xx% vs +2.8% y/y expected
• Prior +2.0%
• Core CPI Y/Y +xx% vs +2.5% prior

Headlines:

• Iran's FM spokesperson: US proposals have mostly been 'unrealistic and excessive'
• USDJPY falls below the key 160.00 handle amid intensifying verbal intervention
• Month-end flows point to dollar buying into the fix - BofA
• Dollar buying looks to be the flavour this month-end
• BOJ reaffirms that underlying inflation is rising moderately towards 2% level
• Bavaria March CPI +2.8% vs +1.9% y/y prior
• Euro area economic sentiment eases in March as Middle East conflict stokes inflation fears

Markets:

• WTI crude oil trades near three-week high at $101.67
• S&P 500 futures up 0.5%, European indices more mixed
• 10-year Treasury yields down 5 bps to 4.39%
• USD mostly higher, only USD/JPY down 0.5% to 159.55 amid Tokyo verbal intervention
• Gold up 0.8% to $4,530,…

Trump on Truth Social:The United States of America is in serious discussions with A NEW, AND MORE REASONABLE, REGIME to end our Military Operations in Iran. Great progress has been made but, if for any reason a deal is not shortly reached, which it probably will be, and if the Hormuz Strait is not immediately “Open for Business,” we will conclude our lovely “stay” in Iran by blowing up and completely obliterating all of their Electric Generating Plants, Oil Wells and Kharg Island (and possibly all desalinization plants!), which we have purposefully not yet “touched.” This will be in retribution for our many soldiers, and others, that Iran has butchered and killed over the old Regime’s 47 year “Reign of Terror.” Thank you for your…

Euro area economic confidence slipped to 96.6 in March, after recording a revised 98.2 reading in February. That's the lowest estimate since September with consumer confidence (-16.3) also falling back on the month to its lowest since the latter months of 2023.

It's all coming undone as the US-Iran war stirs up inflation fears in Europe once again. That as energy prices in the region are surging as the conflict spreads through the Middle East, with disruptions to key gas facilities - in particular Qatar.

The risk now is that the conflict drags on for longer, and that might see higher prices become more entrenched. In turn, that will feed into broader price pressures in general. The ECB had previously been looking to potential rate cuts if…

• No direct talks with the US took place, only messages via intermediaries
• Proposals conveyed to Iran have mostly been 'unrealistic, unreasonable and excessive'

Tehran is dismissing reports of direct negotiations with Washington, clarifying that recent diplomatic exchanges have been limited to messages conveyed through third-party intermediaries. Iranian Foreign Ministry spokesperson, Esmaeil Baghaei, emphasized that these communications do not constitute formal "talks," reiterating the long-standing refusal to engage in direct dialogue under current conditions.

According to the Foreign Ministry, the proposals received from the US via these mediators have been largely characterized as "unrealistic, unreasonable, and excessive." Iranian…