The focus remains on the Middle East as all wait for Iran's response to US strikes against Iranian nuclear sites on Saturday night. All are waiting too for a readout on how effective were the US attacks in destroying Iran's nuclear facilities including Fordow, the most heavily fortified location. And the game of whack-a-mole continues as Iran's stash of enriched uranium presumably was hidden well away from the sites the US struck.

Initial market reaction has been restrained as investors appear to believe the conflict will remain regional and relatively limited. Most interesting, Brent crude oil on ICE is actually down on the day, well below $80 a barrel, after trading above that level briefly Monday. The market apparently thinks Iran will not disrupt the flow of oil tankers through the Straits of Hormuz.

In terms of US war aims, the messaging on Sunday from the White House initially appeared resolute that the US regarded the attack on Iranian nuclear facilities as a one-off and that the desired next step would be peace talks with the existing Iranian regime. That lasted only a few hours as President Trump appeared to favor regime change in a post on Truth Social: It's not politically correct to use the term, 'Regime Change,' but if the current Iranian Regime is unable to MAKE IRAN GREAT AGAIN, why wouldn't there be a Regime change??? MIGA!!!

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