Iran Peace Deal Optimism Surges, but Cautious Timelines Remain
Across multiple expiry dates, the probability of a US-Iran permanent peace deal increased significantly, with the June 30 contract rising +8 to 34¢ and the July 31 contract reaching 48¢. This optimism is coupled with a sharp rise in diplomatic meeting probabilities, suggesting a multi-track negotiation process is underway.
Key takeaways
- 01
Across multiple expiry dates, the probability of a US-Iran permanent peace deal increased significantly, with the June 30 contract rising +8 to 34¢ and the July 31 contract reaching 48¢.
- 02
This optimism is coupled with a sharp rise in diplomatic meeting probabilities, suggesting a multi-track negotiation process is underway.
- 03
The Iran peace deal markets are showing signs of life after a period of stagnation.
Full analysis
The Iran peace deal markets are showing signs of life after a period of stagnation. The contract for a permanent peace deal by June 30 surged +8 points to 34¢, while the longer-dated July 31 contract jumped even higher to 48¢ (+14). This upward pressure is confirmed by the diplomatic meeting market, which hit 61¢ for a meeting by June 30, a +10 point leap. Traders are connecting the dots between recent diplomatic overtures and a tangible reduction in near-term tensions. However, the 'fall of the regime' markets remain deeply bearish (1¢ by May 31, 5¢ by June 30), suggesting the market expects a negotiated settlement, not a regime collapse. The Strait of Hormuz traffic returning to normal is also being priced optimistically, with the June end market at 31¢ and rising. The key risk is the US invasion market, which, despite the optimism, is only at 28¢ for before 2027, indicating a persistent tail risk. The `KXHORMUZNORM-26MAR17` series shows the moving average of transit calls improving, providing a real-world data point supporting the positive sentiment. The `sf query
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