By Benjamin Picton, Senior Market Strategist At Rabobank

A deal is struck and the parties are reportedly set to sign on Friday of this week. Markets are jubilant after an agreement was confirmed by US, Iranian and Pakistani sources, but not without first being threatened by Israeli strikes on Hezbollah in Lebanon which prompted a telling-off by Donald Trump on Truth Social where he told everyone "don't blow it".

Brent crude is down more than 4% this morning to be dealing around $83.72 at time of writing and a rally in bonds late last week has carried over to this morning with Aussie and Kiwi sovereign curves both seeing notable bull steepening.

US equity futures portend the printing of a healthy green candle when markets open later today, but there's still a lingering sense that we're not out of the woods yet. Aside from the Israeli strikes on Hezbollah over the weekend, and the lesson of experience that the IRGC doesn't need much convincing to return to fighting, we learned this morning that despite Donald Trump's declaration that the strait is now open the strait will actually remain closed until the official signing occurs on Friday – ostensibly to provide time for mine clearing operations. Needless to say, a week is a long time in Middle East geopolitics.

Nevertheless, markets are rallying on the vibe right now but what is actually in the deal will be the critical points – and there is still plenty of fog of war surrounding terms. So, what do we know?

Firstly, the agreement is not really a 'deal' at all, or even a deal to have a deal, but rather a memorandum of understanding staking out a framework to discuss a deal over the next 60 days.