Good morning. Hopefully you enjoyed your holiday and the long weekend. Despite the continued uncertainty related to the Iran conflict it was a strong week for US equity markets with the S&P 500 bouncing over 3% breaking a five-week losing streak. On Friday while markets were closed there was a “strong” March jobs reports increasing 178k (vs. 60k est.) reversing the declines in the previous month while the unemployment rate ticked down to 4.3%. The underlying metrics were mixed with the increases continuing to be driven by healthcare, a weaker household survey, a decline in average hourly earnings and the length of the workweek. On the surface it was a hawkish report easing some of the concern about the labor market with the prospect of an inflationary impulse on the horizon. Bond markets were open briefly on Friday with Treasury yields backing up ~5bps after falling during the week.

Outside of the continued shifting rhetoric around Iran, it is a quiet start to the week with markets in China and Europe closed. Over the weekend President Trump gave Iran a 48-hour deadline to open the Strait or the US would “obliterate” key infrastructure. That timeline was later pushed back to 8:00 pm tomorrow. Over the weekend there were reports of a pickup in traffic through the Strait and overnight Axios reported that there is a last-ditch effort for negotiations which would include a potential 45-day ceasefire which has helped futures recover. President Trump will be holding a press conference today at 1:00. S&P traded down >0.5% overnight but have since recouped losses trading slightly higher. Oil prices have also reversed off the overnight highs with ICE Brent trading slightly lower ~$108.50.

Treasury yields have pulled back from overnight highs with the 2yr up bps while 10/30yr yields are down ~1bp. The USD index is also pulling back slightly after retesting $100 again overnight. . Interestingly crypto has seen the most pin action related to the Iran headlines with Bitcoin and Ethereum both up >3%. Over the weekend the Drift Protocol, a perpetual futures exchange on Solana, was hacked by North Korean hackers draining nearly $300ml of assets.