For weeks, Iran has insisted that the US end the war and settle the Strait of Hormuz first, with discussions of the nuclear program to follow. The US has always insisted that it be a package deal, and has tried numerous times to convince and/or threaten Iran to accept that approach. If Trump can be believed, it seems the US is backing down on its demands.

It’s a sensible approach for Trump to take, though it will come at a political cost: more TACO accusations. Apparently, someone in his orbit might have convinced him it’s necessary given the horrid poll numbers we’ve seen for his handling of the economy – the issue which got him elected. But, if you dig beneath the surface of the social media posts, it’s not at all clear that a deal has been reached.  From Al Jazeera…

Earlier on Tuesday, US Secretary of State Marco Rubio declared that Operation Epic Fury, the air and naval campaign launched on February 28, was “concluded”.  What Washington now sought, he said, was a “memorandum of understanding for future negotiations”. For weeks, that is precisely what Iran has been demanding.

In proposals passed on to the US through Pakistan, Iran has in recent weeks sought multistage negotiations, with a preliminary deal aimed at ending the war, and negotiations on the White House’s demands that Tehran end its nuclear programme pushed for later.

Trump and his administration resisted, with the US president insisting that getting Iran to give up its nuclear programme was central to any deal with Tehran.

Now, the US appears to have come around to accepting Iran’s demand, say experts. On Wednesday, the Reuters news agency and the US publication Axios reported that the US and Iran were close to agreeing to a one-page MoU to end the war, even though there have been no detailed negotiations on Tehran’s nuclear programme.

For now, oil prices are down over 5% (versus over 10% a few hours ago), the 10Y is sharply lower, and futures are up over 0.50%.

The algos were elated at seeing VX back below its SMA200, though it has since rebounded. A breakdown would require that it remain below 19.21. At the present time, it leaves plenty of doubt.

VIX itself has already broken down several times and is going back to the well today.

Oil and gas futures are holding on to about half of their declines…

…so the 10Y is happy.

Could the war actually be over? It’s impossible to say. Trump has shown us over and over that he is able and willing to say or do almost anything to boost stock prices. Al Jazeera reports that Iran is considering Trump’s latest offer. Stay tuned.