“The realization that life is absurd cannot be an end, but only a beginning”. Albert Camus
from *The Daily Doom *
These made me laugh!
Focus will be on
CPI slightly better but so seeing early relief rally, but uncertainty of situation remains the same.
Islamabad Talks - VP Vance, Witkoff, and Kushner leading the US delegation for direct US-Iran talks on the 10-point framework. Iran’s demands (US military withdrawal, permanent Hormuz control) are structurally incompatible with any US agreement. The question is whether both sides can paper over the gap for another two weeks - or whether it blows up today.
Bank Earnings Wave
Goldman Monday, then the full JPM/WFC/BLK/C/BAC tsunami Tuesday. First hard data on post-conflict credit quality, NII stability, and consumer resilience.
Dimon’s commentary on consumer credit delinquency trends and macro confidence is the most market-moving single statement of Q1.
Recent strength in group taking index back towards overbought levels, which could limit upside on any positive earnings announcements. Could be a sell-the-news scenario
KEY THEMESUS-Iran ceasefire fragility is exposing the depth of structural damage inflicted on global energy infrastructure; markets caught between relief-rally momentum and the reality that supply normalization remains months away.
The Strait of Hormuz remains largely blocked despite the truce announced Tuesday, with only Iran-linked vessels transiting and major shipping firms like Mitsui OSK demanding clarity before resuming operations. Iran saying will only allow 12-15 ships through vs backlog of 400 ships.
Saudi Arabia said that recent attacks slashed production capacity by 600,000 barrels per day, compounding supply constraints even as Brent trades near $96—down sharply from last week’s peaks but still elevated enough to keep inflation expectations rising globally.
DXY safe haven bid has reversed violently, erasing all of 2026 gains. Nomura warns that the de-dollarization theme remains “temporarily interrupted,” with the potential for a 4% slide by year-end if peace holds.
Cross-asset correlations are stabilizing but remain fragile
European banks rallied 8% Wednesday after JPMorgan called the prior selloff overdone.
Emerging markets posted their best weekly gains since the Covid era as risk appetite tentatively returns.
Oil physical market signals persistent tightness with Dated Brent above $140 even as futures hover near $96, exposing a dangerous disconnect between paper and real-world supply conditions. Asian spot LNG climbed to $17.4 per million BTU Thursday as no tankers carrying LNG have successfully transited Hormuz since the ceasefire. Last tanker from Strait arrives in Europe today; given the 40-day transit time, the next one will be at least that far in future.
Goldman Sachs projects Brent averaging above $100 through 2026 if Hormuz remains constrained for another month.
Asian refiners are contemplating 20-30% run-rate cuts as dozens of crude tankers remain stranded in the Persian Gulf, while alternative Atlantic Basin barrels carry prohibitively high freight premiums. China authorized state refiners including Sinopec and CNPC to tap commercial oil reserves as the six-week war creates a global energy crunch.
Central banks are pivoting toward a more hawkish stance as energy-driven inflation forces a reassessment of rate-cut expectations: Poland, Serbia, and Romania all held rates this week, citing geopolitical uncertainty, while New Zealand’s RBNZ signaled a willingness to hike if core inflation accelerates.
European banks are seeing renewed analyst support: Citi maintained its overweight stance and raised EPS estimates, noting the sector is one of few still experiencing upgrades due to superior revenue outlooks and potential rate-hike tailwinds from Iran war developments. Barclays jumped 8.1% Wednesday, its best performance in two years, while Standard Chartered rose 8.3% as credit default swap spreads tightened.
S&P is on track for its biggest weekly advance in nearly a year on the ceasefire relief - but it’s still down 4% YTD, oil has only given back half its war premium ($61 to $97, not $61), Ras Laffan is a 3-5 year structural LNG damage story that persists regardless of diplomacy, and TACO is now a documented sell-side trading framework. Feels like market is renting this rally, not owning it.
‘North Sea oil prices hit record high as Iran keeps hold over Strait of Hormuz’
(FT)This aint nearly over- ‘Fitch cuts FS KKR Capital rating to junk territory as asset quality weakens’
(Rtrs)‘Anthropic Model Scare Sparks Urgent Bessent, Powell Warning to Bank CEOs’
(Bbrg)‘China’s Xi tells Taiwan opposition leader unification an ‘inevitability’’
(FT)
Fed funds vs 1 year inflation swaps
Equities market trading with Bond volatility
Much of the action can be traced to passive or systematic actors, leaving the active managers ( ergo, many of the LOs) in a reactive state. Seeing increased use of ETFs both as beta hedges and easy way to reduce tracking error vs passive-driven activity.
Quick update on retail, from Rubner at Citadel:
‘THE DEEPER DIVE: The President’s Prophet and the Pentagon’s High Priest Predict ARMAGEDDON!’ (Daily Doom)
Why would she do this?? ‘Melania Trump Says She Was Not Associated With Jeffrey Epstein’
(NYT)
