Hi YXI friends,

The shooting at the White House Correspondents’ Dinner dominated the weekend headlines, although both Trump and Vance were safe.

There has been further yo-yo in the US-Iran talks over the weekend. Trump cancelled Witkoff and Kushner's trip to Pakistan for Iran talks. However, reports emerge that Iran is open to ending the war if the US is willing to remove its naval blockade.

At this stage, I prefer a “believe it when I see it” approach, as both sides are trying to make manoeuvres. It is very likely that Iran is a split camp between the hawks (drag on this war) and the doves (end this war now). Therefore, the negotiations will require effort and complexity to reach an agreement by all sides.

The oil market is very prudent in expecting a quick end to the war. Rates have been fairly neutral. However, equities are clearly much more optimistic, refocusing on earnings growth and AI narratives over energy shock concerns.

This may be a permanent market-regime change (i.e. each asset class simply trades according to its own internal logic, rather than with a clear cross-asset driver). I believe we need more time to observe the next pullback before confirming this is the case.

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