Overall this was a slightly subpar auction, especially after yesterday's stellar 3Y auction, but in light of the bid drop in yields across the curve and the lack of concession, it priced roughly where it should have and the market has barely reacted as one would expect.

The simple fact is that Trump just conceded control of the Strait to Iran in order to save the market and the economy from further pain...

 Trump says direct Iran talks happening "very soon"...

"Anyone who has been in DC for five minutes knows this..."

"CTA’s are maintaining their max short positioning in US Treasuries with the tracker not showing any strategies running longs across any of the buckets this week" - UBS

Markets are stabilizing following a period of aggressive de-risking. Positioning has reset, sentiment remains depressed, and flows are turning more constructive...

Trump calls it a "separate skirmish" but insists "that will get taken care of too"...

Still smarting from the embarrassing source code leak, Anthropic announced it will not release its latest frontier AI model, Mythos, to the public, saying the model is too powerful in ways that introduce elevated cybersecurity risk.

"Delta is best positioned to navigate this environment..." 

... but the possible spectrum is clear...

Allowing Iran to continue to control the crucial waterway is likely to be highly unpalatable to Gulf states including Saudi Arabia, Qatar and the UAE.

Last time SPX was here, silver was ~$10 higher…

ASPI could be the helium supply white knight should Qatar’s troubles continue…

“We will explore. We will build ships. We will visit again...”

The first two ships since the ceasefire was announced have crossed the Strait of Hormuz after Iran said it will demand that shipping companies pay tolls in cryptocurrency for oil tankers passing through the Strait, as it seeks to retain control over passage...

 

"Even two weeks is a positive because we will see some flow of oil return." 

They de-risked… and then it ripped.

“Markets have been moving very quickly, setting us up for a relief rally. What will happen in the next few weeks — who knows? It’s hard to believe that this is a long-term resolution.”  

...we are far from a “real deal”...

The freeze phase is now behind us, we are currently in squeeze phase, and I believe we will enter offensive phase over the next few days as we enter earnings season...