Good morning,
 
Yesterday US markets started off celebrating the Knicks comeback, pulled back from the highs as President Trump suggested there could be an escalation in the Iran conflict including taking Kharg Island but then ripped into the close as he did an about face saying strikes had been called off as “final points have been approved in principle and in detail by all parties involved” which included multiple Middle Eastern countries (though Iran wasn’t specifically mentioned). It was clear markets were never putting much stock in the Kharg Island threats as oil prices only moved modestly higher, but they fell sharply on the agreement headlines with ICE Brent testing the recent lows ~$90. This caused a reversal in Treasury yields which fell nearly 10bps across the curve with both the 10/30yr yields breaking back below 4.5%/5%, respectively. Before the headlines the USD index was threatening the March highs ~$100.50 but also reversed breaking back below $100. The dollar reversal and markets starting to reprice some of the Fed hawkishness also caused a sharp reversal in precious metals which have been getting throttled recently. The S&P 500 ended up nearly 2% reversing this week’s decline, with tech the biggest beneficiary of the reversal (NYSE 100 +3%/Semis +>8%). However, small/midcap indices outperformed on the day closing up between 2% - 3%.
 
Overnight, press reports suggested that a deal could be signed at the G7 next week which would include a 60-day extension of the ceasefire, a reopening of the Strait and further negotiations on the nuclear program, though this has not been approved by Iran, and Israel has said it was not part of the agreement. Futures were extending gains this morning but have pulled from the highs as  Iranian press said the claims of signing an agreement on Sunday is “pure falsehood”. Outside of the Iran headlines and a handful of earnings it has been a quiet morning as traders await the SpaceX IPO, which has been trading between 170-180 in perps markets overnight.
 

 
The only economic data on the calendar is U of Mich Sentiment out after the open. Treasury yields are about 4bps off the overnight lows. The USD index has also bounced but is holding below $100.
 
Government Yields

• US 2yr +2bps to 4.09%, 5yr +2bps to 4.21%, 10yr +3bps to 4.49%, 30yr +3bps to 4.98%
• USD index: -$0.04 to $99.81

 
Global markets traded higher overnight. Tech heavy indices in Asia led to the upside overnight but still ended the week slightly lower. The Yen pulled back from ~160.50¥/$ yesterday but is back over 160 again. The BOJ is still widely expected to hike next week despite Governor Ueda being hospitalized though this could create some volatility around communication. Overnight a Bank Of Korea official warned that they should raise rates before it is too late. India’s Sensex was up >2% benefitting from the move lower in oil prices. Local inflation data came in slightly better than expected. European indices were up between 1% - 1.5% ending with modest gains for the week. Germany was the exception ending the week slightly lower as SAP fell >10% and the Siemens companies ended lower.
 

 
Oil prices continued lower overnight with ICE Brent tagging its 100d ma (~$86.15) before bouncing back to ~188. Precious metals are around where they were at the US close yesterday (chg. on prices below reflect 1:00 close). Ag is around unchanged. Crypto is also hovering around unchanged having pulled back from the highs.
 

 
Adobe (-9%) is under pressure again despite solid earnings as the company lowered ARR guidance and announced the departure of its CFO. Lennar is modestly lower earnings were inline though sales and new orders missed. RH is also modestly lower.
 
Earnings:

• After-Market (Thrs): ADBE, LEN, RH, ZDGE        

Economic Data:
US:

• 10:00 U of Mich. Sentiment

Global:

• UK Industrial Production: 0% vs. 0.1% cons., prior -0.2%
• UK GDP: -0.1% m/m vs. -0.1% cons., prior 0.3%
• India Inflation: 3.93% vs. 4% cons., prior 3.5%