Peace deal still MIA; markets still don’t mind

A US-Iran peace deal has, yet again, failed to materialise despite reports that one is imminent. But, in spite of another round of tit-for-tat attacks over the weekend, market participants continue to operate on the assumption that, sooner rather than later, the Strait of Hormuz will re-open. With much of the (presumed) good news already priced in, there is probably less and less scope for a relief rally should a deal finally materialise – aside perhaps from in the government bond market. What seems less than fully discounted, at least in the currency market, is the return of US exceptionalism.