Iran has communicated to mediators from Qatar and Oman that it will not participate in negotiations while under attack. This decision affects ceasefire talks with Israel and potential nuclear discussions with the United States. The stance is that serious negotiations will only occur after Iran completes its response to Israel’s pre-emptive strikes.

Iran’s position aligns with past statements from its Foreign Minister, who indicated that preparations for a return to diplomacy would occur after addressing recent conflicts. Although the truth of these reports remains unverified, there is an anticipation of a cessation of violence in the near future.

Market Activity Update

In terms of market activity, futures trade for the week is scheduled to commence at 1800 US Eastern time, which is equivalent to 2300 GMT.

What the current situation lays bare is a clear shift towards a wait-and-react posture from Tehran, which directly impacts ongoing diplomatic efforts in the region. This announcement is neither ambiguous nor tentative – Iran has laid out its terms: no talking while missiles are in the air. The message delivered through the Gulf intermediaries draws a line. This instantly raises questions about timing – how long, exactly, will their response take? And when might talks resume, if they do at all?

For those watching the broader picture, particularly us in the derivatives space, this signal reverberates beyond diplomatic circles. Santos, having made public statements over prior weeks, underlined a systematic approach that remains consistent: retaliation first, then re-engagement. Regardless of whether full verification of these reports arrives, the diplomatic machinery appears fractured for now, potentially suppressing talks around both ceasefires and nuclear limits.

Looking at the tick charts and options flow, Sunday evening’s open at 2300 GMT carries a heavier expectation load than usual. Futures traders should prepare for sharp pricing recalibrations shortly after markets open. Volatility, particularly in energy-linked contracts and safe-haven hedges, is likely to intensify from the bell. Gaps aren’t out of the question – in fact, they’re probable given the layered uncertainty.

Geopolitical Risk and Trading Strategies

We should pay close attention to positions linked to Middle Eastern geopolitical risk. There’s been a slow climb in premiums over the past five sessions, but it now looks justified rather than speculative. Any belief that a reroute towards diplomacy might stabilise pockets of volatility must now be replaced with a more tactically defensive stance.

Adjusted positions, tighter stops, and shorter exposure windows may make more sense in this patch of risk. Generally, event-driven swings like this one test conviction. But it’s not about holding firm – it’s about adapting faster. A sense of timing, and preparation for snap reversals, will serve better than firm directional bias.

The open should be approached with leaner sizing and an eye on liquidity. If wholesale shifts come overnight in energy names or defence-linked assets, fade strategies may not hold under pressure. Instead, apply tested frameworks, and stay nimble. Assets tied directly through oil or foreign policy risk should be monitored closely for early indications of whether traders might overreact or simply reprice risk more methodically across the board.

We’ve been here before, of course. It always starts with diplomacy delayed, then slowly morphs into pricing asymmetry. Take it step by step.

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