Editor's note: Some preliminary observations on the ceasefire agreement for reference

1. Trump just posted on Truth Social (around 6:30 pm ET on April 7, 2026), clearly claiming to have reached a "bilateral ceasefire" (double-sided CEASEFIRE) with Iran and suspending bombing and attacks on Iran for 2 weeks. The original content is as follows:

Based on conversations with Prime Minister Sheikh Shahbaz Sharif and Field Marshal Asim Munir of Pakistan, during which they asked me to suspend the deployment of destructive forces to Iran tonight, subject to the Islamic Republic agreeing to an immediate, complete, and safe opening of the Strait of Hormuz, I have agreed to suspend bombing and offensive operations against Iran for a period of two weeks. This will be a bilateral ceasefire! This move is being taken because we have met and exceeded all military objectives and have made significant progress on long-term peace with Iran and peace in the Middle East, and are very close to a final agreement. We have received Iran's 10-point proposal and believe it is a viable basis for negotiations. Nearly all points of disagreement have been agreed to by the United States and Iran in the past, but two weeks will allow the deal to be finalized and completed. On behalf of the United States of America, in my capacity as President, and on behalf of the nations of the Middle East, I am pleased to see that this longstanding problem is about to be resolved. Thank you for your attention to this matter!

2. According to information from Iran’s official media, Iran’s Supreme National Security Council officially stated that it confirmed the two-week ceasefire agreement mediated by Pakistan, and that subsequent permanent peace negotiations will be held in Islamabad, the capital of Pakistan. The original content is as follows:

On behalf of the Islamic Republic of Iran, I would like to express my sincere gratitude and appreciation to my dear friends, Mr. Sharif, Prime Minister of Pakistan, and Mr. Munir, Field Marshal, for their tireless efforts to end the war in the region. In response to the fraternal request expressed by Prime Minister Sharif in his tweet, and taking into account the U.S. demand for negotiations based on its 15-point proposal and the statement on acceptance of the general framework of Iran's 10-point proposal as the basis for negotiations, I hereby declare on behalf of Iran's Supreme National Security Council: If attacks against Iran cease, our powerful armed forces will cease their defensive operations. Within two weeks, safe passage through the Strait of Hormuz can be achieved through coordination with the Iranian Armed Forces and due consideration of technical limitations.

It is worth noting that 12 hours ago, Iran stated that it would only accept a permanent end to the war with substantive guarantees, and resolutely rejected any temporary ceasefire.

3. Observation 1: Both sides seem to have a consensus on restoring passage through the strait and managing conflicts

In yesterday's report, we raised the "probability that both sides will advance negotiations to 25% (previously 10%)" on the grounds that "the United States and Iran have a certain consensus and room for negotiation in four aspects, including restoring access to the Strait of Hormuz, lifting sanctions on Iran, broader and further negotiations, and regional conflict management."

The "temporary ceasefire agreement" reached in such an environment lacking mutual trust means that the two sides have more consensus (or common fears) than expected. Judging from the current stance, restoring access to the Strait (Iran collects money or improves its international image to ensure future negotiation interests, and the United States lowers oil prices) and conflict management (Iran avoids damage to economic facilities, and the United States avoids the situation getting out of control) seem to be common denominators for both sides.

4. Observation 2: Both sides expressed different opinions on the prerequisites for ceasefire

1) Iran believes (at least publicly claims) that the United States accepted the 10-point demands put forward by Iran.

The 10-point demand is different from yesterday's version, including "coordinate with the Iranian armed forces to control passage through the Strait of Hormuz; end the war against all members of the "Axis of Resistance" and end the Israeli regime's aggression; withdraw U.S. combat forces from all bases and deployment points in the region; establish a safe transit protocol in the Strait of Hormuz , ensure that Iran enjoys a dominant position; fully compensate Iran for its losses based on the assessment results; lift all primary and secondary sanctions and relevant Security Council resolutions; release all Iranian assets and properties frozen overseas; and finally, all these matters should be approved in binding Security Council resolutions."

2) The United States (from the perspective of Trump Truth) believes that Iran agreed to open the Strait of Hormuz, and the 10-point demand is only the basis for negotiation.

3) This kind of disagreement on specific texts is very common in tense negotiations at the last minute, and more reflects political propaganda and bottom-line declarations. Investors should pay attention to the "will" and "bottom line" of both parties, but should not try to read too many details into future agreements.

4) Of course, we tend to think that Iran will eventually get a good deal, because the basis of the negotiations is the 10-point demands put forward by Iran, not the 15-point demands put forward by the United States.

5. Observation 3: Pakistan played an important role in this ceasefire agreement. And the last item in Iran's 10-point agreement is that it "should be ratified in a binding Security Council resolution." Iran obviously hopes to gain sympathy and support from the international community to suppress the United States. It is expected that future nominal US-Iran negotiations will contain more multilateral elements. The possibility of substantive participation by more countries cannot be ruled out.

6. Observation 4: We tend to believe that the worst is over.

1) In this conflict, the United States and Iran played the "coward's game" until the last moment, and it can be said that the fight was bloody (Trump's election was in jeopardy, and Iran's military power was greatly damaged). The market even suspected that the United States might use nuclear weapons after Trump tweeted about "destroying civilization." Looking back at the reciprocal tariff TACO on April 9 last year and the TACO against China in May (when bilateral tariffs soared to 125%), as long as Trump feels the obvious pain, the possibility of subsequent escalation will decrease significantly. It is expected that both the United States and Iran will think twice before escalating the situation.

2) In the short term, the actual navigation situation in Hormuz, the progress of the Islamabad negotiations, and of course the deployment of US military forces will be the focus of the market.