Since the State of the Union address, Polymarket odds of the United States striking Iran have increased by roughly 40%. The probability now sits at 59% by March 31 and 69% by the end of June.
Quick recap. Bitcoin has had a solid rally, up over 6%. The S&P 500 rebounded but did not make new highs. Small caps did not follow. Gold and silver rose. The euro ticked up against the yen and aussie and cable rallied.
We perceive any strike on Iran to be a market positive risk taking event. We believe there is a significant amount of fear discounted in the EUR/USD price as well as euro crosses. The next downleg of the dollar should most likely commence after a strike. We like cable here.
