The early moves today are a pullback to what we saw in trading yesterday. Oil prices are up and so are Treasury yields, which in turn are weighing on equities and precious metals again. And in the major currencies space, the dollar is once again creeping higher across the board.

Putting aside all the noise about whether or not there were talks between the US and Iran, it is clear that Trump has signaled that we might just be entering a new phase in the conflict. We’ve seen this playbook by him before. It is the exact same thing that he stuck with when dealing with China on trade/tariffs.

It’s all the same kind of words being used. “I didn’t call, they called”. “Talks were very good and very productive”. “They want to make a deal”.

Knowing Trump, he always wants to sell the narrative that he is the one who won the art of the deal. However, the difference this time is that Iran will hold significant leverage as they are staying in control of the Strait of Hormuz. It would not make much sense for them to give that up, while at the same time also compromising to US demands.

In any case, we’ll just have to wait and see. But the fact of the matter is, the Strait of Hormuz remains in de facto closure for now. And that is still the most important thing for markets.