And I believe it could be, Something good has began. Bob Dylan

And we are back after the Easter break. Yesterday, we woke to the threats of the demolition of a civilisation never to be brought back again, the expectation of which should have scared investors enough to run for the hills, buy protection where they could and seek any safe haven. That never really happened. U.S. stocks were barely down. The Dow Jones Industrial Average still closed down 85 points, or 0.2%. But the S&P 500 and the Nasdaq Composite closed in positive territory, both up roughly 0.1% on the day. The Vix was a little higher, but again, there are no signs of panic. The oil price was a little higher, but not by much. It’s almost as if the capital markets had a sense that a deal was possibly in the offing, and maybe we were closer to the end than the beginning of the war. This morning, we woke to the news that Iran and the US had agreed to a 2-week ceasefire and will open the Strait of Hormuz after Tehran submitted a 10-point peace plan to end the war. Stocks across the globe are celebrating this morning, and oil is trading below $100 a barrel.

In the past week, there has been some evidence of the impact the war is starting to have on the global economy. The monthly PMIs produced by S&P Global indicate a slowdown in global economic growth and a spike in inflation, which they attributed directly to the outbreak of conflict in the Middle East. S&P Global go on to highlight that costs were driven by spikes in energy, fuel, and shipping prices following the conflict, as business activity expansion nearly stalled or slowed to multi-month lows.

Markets will cheer today, and hopefully rightly so. The question will be, now what happens next? Will the ceasefire hold? Will ships now start to pass freely through the Straits again? John Authers, in his column this morning, points out that there is reason for caution. Oct. 22, 1990, saw what at the time was the largest drop in oil prices in history, as traders grew in confidence that a war could be avoided. They proved wrong, and the price spike had further to go.

For today, we celebrate, should this peace deal hold, thoughts will turn again to hopes of interest rate cuts, and one should see the bond market rally today along with equities. The focus will also shift to more mundane matters with the Q1 corporate earnings season starting next week. For notable economic data, we have to wait until towards the end of the week.  On Thursday, we get a combination of employment data, monthly PCE and the final reading of Q4 US GDP. Then on Friday, more inflation data and Michigan consumer sentiment. The Masters golf also starts tomorrow. The smart money is apparently on DeChambeau, but keep an eye on the Cornish boy living his dream, playing his first Masters. His name is Harry Hall. Who can rule Rory out after last year?