17.08.2026 - Ceasefire Extended – Buying Time, not Peace
The US and Iran have agreed to extend their ceasefire today, just as the 60-day period under the Memorandum of Understanding (MoU) was set to expire.
However, no details regarding the duration or conditions of the extension have been announced so far.
More importantly, an extension of the ceasefire should not be confused with progress towards a final agreement. The 60-day period was originally intended to provide Washington and Tehran with time to negotiate a broader settlement. According to Iran, however, these negotiations never properly began. Tehran argues that US violations of the memorandum prevented the diplomatic process from moving forward.
Negotiations therefore remain effectively stalled. Tensions have increased further in recent days. Iran has made clear that it is unwilling to negotiate under the current conditions, while President Trump has escalated the rhetoric surrounding the Strait of Hormuz, even suggesting that the strategic waterway could become US territory, a position immediately rejected by Tehran.
Markets:
Equities: US markets trading positive while Europeans are lagging
Bonds: yields moving higher - US 10y yield above 4.70%, Japan 10y yield 2.93%
Commodities: Oil prices sideways, WTI around USD 82/barrel and Brent around USD 88/barrel
Precious metals prices higher, gold close to USD 4’400/oz, silver moves towards USD 66/oz
Currencies: US dollar clearly lower, Japanese Yen weakens, USDJPY 159
Cryptos: with a plus - Bitcoin above USD 63k
Volatility: The VIX index remains below 15 (good opportunity for hedging)
My View: The ceasefire extension therefore appears, at least for now, to buy time rather than resolve any of the fundamental disagreements between Washington and Tehran.
It reduces the immediate risk of renewed military escalation, but does not change the underlying conflict:
The Strait of Hormuz remains unresolved.
The nuclear issue remains unresolved.
And the negotiating positions of both sides remain far apart.
Without a final agreement, the risk of another sharp spike in oil prices remains elevated.
For Iran to make meaningful concessions on its nuclear program and fully reopen the Strait of Hormuz, the US will likely have to offer substantial concessions in return. At the same time, Tehran has shown little willingness to simply accept Washington’s conditions and continues to insist on its own demands regarding sanctions, frozen assets, the US military presence and the future administration of the Strait.
This puts Trump in a difficult political position. A deal involving major concessions to Tehran could easily be portrayed domestically as the US having failed to achieve its objectives after months of confrontation. Ahead of the November midterm elections, such an outcome would be politically difficult to sell.
Therefore, I believe Trump has a strong incentive to play for time until the midterms.
Extending the ceasefire does exactly that: it reduces the immediate risk of escalation while postponing the difficult compromises required for a lasting agreement.
For markets, the distinction is important: The ceasefire has been extended. The underlying risks have not disappeared.
The Strait of Hormuz remains a major geopolitical risk, and with oil markets still highly vulnerable to supply disruptions, investors should not become complacent simply because today’s deadline has been pushed back.
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