Good morning! As the title says, show must go on—the Iran war is heating up again. At 6AM this morning, CENTCOM announced a new wave of strikes, aiming to limit the IRGC’s ability to target shipping in the Strait of Hormuz. We dive deeper into the latest developments there in the Strait of Hormuz section.
Next, we take a brief look at the midterms, as well as the chances of a Fed hike in two weeks as Kevin Warsh is settling in as the Fed chair. Then we move across the pond to take a look at the latest developments in UK politics, where Andy Burnham is forming a new cabinet.
Lastly, we move on to business and examine the recent market changes on the Gemini Pro release market and Stripe x PayPal acquisition market.
Let’s take a look at the markets to make sense out of the news!
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The Midterms Tracker
RED
RED is flat on the day and remains around the 90.5-91.5 range.
Senate
SENR seems to be back to the slow upward trend after a short slump. Index indicates a balanced outlook, suggesting that Republicans have a fair shot at keeping the Senate.
House
After a short period of stabilization around 75 points, HOUSER continues to trend down, indicating that Democrats are a strong favorite to win the House in the midterms.
Main Events Of The Day
#1 The Strait Of Hormuz
Trade Strait of Hormuz traffic on Stand
Both sides continue to exchange fire. The US is targeting sites mostly across Southern Iran while Iran is sending missiles all across the Persian Gulf, including on ships. Traffic through the Strait of Hormuz has effectively stopped as vessels would rather stay put than risk getting hit:
Traders now give only 11% chance we will see traffic normalization by the end of August. Oil continues its rally amid the escalation with both Brent and WTI now trading above $80 per barrel:
#2 Fed Hike Moved Ahead
While the Strait of Hormuz is back to the old status quo, the June inflation numbers were still positively impacted by the MoU. The June CPI print surprised to the downside and resulted in traders sharply updating their hike forecast.
Chances of a July hike fell from 36% down to 11% on the news. But the September hike is still very much on the table—traders give a 42% chance we will see one then.
The July decision will give a lot of insight into the thinking of Kevin Warsh. It will be his second decision and the first after the announcement that the Fed is ditching forward guidance as a policy. We will be watching his speech closely to give you some insights into the future.
#3 Turmoil in the UK
Across the Atlantic, it seems that Ed Miliband will not be the next Chancellor of the Exchequer.
His chances collapsed as reports started to emerge that Miliband’s agenda might be a problem for the new government. Labour Party is first and foremost trying to repair its image after a highly unpopular Keir Starmer allowed the Reform UK to gain popularity and emerge as a favorite to win the next election.
We shall hear more on UK politics as this week Andy Burnham is expected to be confirmed as the party leader. He can become the prime minister as early as next week.
#4 No New Gemini Pro Anytime Soon
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Leaving politics behind, Google is not expected to release the next Gemini Pro model this month in a surprising turn of events.
On social media we can see that the model can still come out as early as July 17th. However, some reports say that the launch has been delayed until the end of the month, or even further:
Traders seem to trust the delay news more as in the last couple of days the market has collapsed from nearly 70c to just 5c for the July 17th strike.
#5 Stripe Is Looking To Buy PayPal
Lastly, just yesterday we got the news that Stripe and Advent Capital, a private equity firm, are looking to buy PayPal for $53 billion.
Traders were not expecting that as the Yes price was at just 19c when the news hit. Now, they do see the offer as serious as the price of Yes shares rose to 73c. Sometimes prediction markets also get surprises.
Wrap up
That’s all for today!
We will continue to monitor the situation on prediction markets.
Make sure to follow prediction markets live to get fresh information on the conflict. Stay strong and see you tomorrow for another Morning Brief!
Brought to you by Stand
Stand is a prediction market aggregator and the advanced trading terminal of choice for professionals. On Stand, traders discover trends, track traders, copy trade, get whale alerts, automate trades, and so much more.
This is not official investment or life advice. Do your own research. These are only my opinions and I encourage anyone to do their own research before putting any money anywhere.