Good morning and Happy April Fools. Yesterday a few rays of light broke through the Iran war clouds, exciting a market that’s been searching for signs military operations would cease. That, and end-of-quarter flows triggered a sharp rally across markets. The S&P 500 gained 2%, Russell 2000 over 3%. Gold rose as well while Brent (with the front-month rolling) fell 3% and yields dropped ~5bp as treasuries were bid. The Iran news centered on President Trump’s willingness to exit from the conflict without re-opening Hormuz and comments from Iranian leadership. Trump is scheduled to address the nation tonight.

Equity futures are following-through on yesterday’s gains but are sliding from this morning’s highs as we approach the open. According to the WSJ, the UAE is preparing to help open Hormuz by force, lobbying the UN for a resolution to authorize the action. That would be a significant strategic shift in the Iran action and the global order. One other thing to keep an eye on is the re-emergence of President Trump’s frustration with NATO and its response to US calls for assistance during the Iran war, calling the organization a “paper tiger” and saying he is strongly considering pulling the US out of the alliance in an interview with the UK Telegraph, and doubling down with comments this morning.

62k private jobs were added in March according to ADP’s employment report today, in line with last month and above consensus of 40k additions. The smallest companies (<20 employees) showed the strongest gains. The monthly jobs report will be released on Friday, when markets are closed, which could set up an interesting decision on how much risk investors are willing to hold at the Close tomorrow. Retail Sales for February rose from January and beat consensus, both Headline and Control-group. It’s a solid report but comes before any impact from the Iran war.

Brent crude is down modestly and trading just above $100, with the June contract now the front-month. Nat gas is also lower. Precious metals are little-changed outside of gold, which is up 2%. Both silver and gold regained their 100d ma. Crypto is modestly higher. Bitcoin remains below its 50d ma ($68.6k vs $71.9k) while Ether broke above it earlier this week.