Iran boosts missile production as US-Iran negotiation window closes

Iran has increased its missile and drone production while restoring underground military facilities, according to a report from the Jerusalem Post. This development comes as the window for U.S.-Iran negotiations closes, with both sides seemingly preparing for renewed conflict. The United States, along with Gulf countries, has been replenishing military stocks during the pause in direct negotiations. These actions appear to reflect expectations of further military exchanges rather than diplomatic resolutions. Market pricing suggests that the likelihood of a final nuclear deal by the August 18 deadline has decreased significantly. The possibility of reaching an agreement remains low across various timeframes, with odds remaining below 3% for a deal by the end of September. The ongoing military preparations by both Iran and the U.S. contribute to a market view that a diplomatic breakthrough is increasingly unlikely in the short term. The current market sentiment shows a consistent trend of declining confidence in a swift resolution. The probability of a deal by the end of October is priced at 5.5% YES, while the December 31 deadline holds a slightly higher 15.5% YES. This pricing refl...