--- title: "The strait was closed less than a day after opening. Short-term risks have risen, but the market remains restrained, focusing on the hearing." type: "Topics" locale: "en" url: "https://longbridge.com/en/topics/40037284.md" description: "Middle East Conflict Update: Negotiation situation takes a dramatic turn, Strait reopened for less than 24 hours before being blocked again. On April 17th, Donald Trump and the Iranian Foreign Minister jointly announced the full resumption of navigation in the Strait of Hormuz, and Israel simultaneously halted military operations against Lebanon. However, in less than 24 hours, the situation took a sharp turn for the worse. Iran announced that due to the US violating the ceasefire agreement and not lifting the blockade on Iranian vessels and ports, it is re-closing the Strait of Hormuz until the US fully lifts the blockade. Furthermore, the US-Iran ceasefire agreement is set to expire on April 21st, according to reports from the Iranian News Agency (IRNA)..." datetime: "2026-04-20T10:09:52.000Z" locales: - [en](https://longbridge.com/en/topics/40037284.md) - [zh-CN](https://longbridge.com/zh-CN/topics/40037284.md) - [zh-HK](https://longbridge.com/zh-HK/topics/40037284.md) author: "[泰康资产管理（香港）](https://longbridge.com/en/profiles/13049407.md)" --- # The strait was closed less than a day after opening. Short-term risks have risen, but the market remains restrained, focusing on the hearing. Middle East Conflict Update: Negotiation Situation Takes a "Sudden" Turn, Strait Reopened for Less Than 24 Hours, Blockade Reimposed On April 17, Donald Trump and the Iranian Foreign Minister jointly announced the full resumption of navigation through the Strait of Hormuz, and Israel simultaneously halted military operations against Lebanon. However, in less than 24 hours, the situation took a sharp turn for the worse. Iran announced that, due to the U.S. violating the ceasefire agreement and not lifting the blockade on Iranian ships and ports, it was re-closing the Strait of Hormuz until the U.S. completely lifts the blockade. Furthermore, the U.S.-Iran ceasefire agreement is set to expire on April 21. According to reports from the Islamic Republic News Agency (IRNA), the two sides may arrange a new round of peace talks before the expiration date, but no clear consensus has emerged so far. Short-term Outlook: Strait Re-blocked, Localized Risks Remain The U.S.-Iran negotiation process has once again seen dramatic twists and turns, with the strait being re-closed shortly after its reopening. This largely falls within the negotiation pattern we previously anticipated. On April 20, Trump unilaterally stated he would send a team for a second round of talks, but Iran has yet to confirm this, leading to a rapid shift in market sentiment. According to the latest trading data from prediction market platform Kalshi, the market's perceived probability of the Strait of Hormuz returning to normal before May 15 has dropped significantly from a peak of 60% to 37% (Source: Kalshi Prediction Market, 2026/4/19). In terms of the market, the overall performance of Asian trading this morning (4/20) remained relatively restrained, with limited stock market declines. This indicates that while investors are disappointed with the progress of negotiations, there has been no panic selling, and the market is still in a wait-and-see digestion phase. Subsequently, close attention must be paid to whether the two sides will have further contact or indirect consultations on the eve of the ceasefire expiration. However, with the mutual trust mechanism breaking down rapidly in less than 24 hours and Trump again adopting a tough stance to exert pressure, financial markets are likely to be dominated by news-driven trading in the short term, with localized risks remaining high. Long-term Perspective Analysis: Even if Peace Talks Hold Hope, Long-term Mutual Trust Mechanism Faces Tests; Controlled Management is the Best Development Although the two sides reached a consensus on opening the Strait of Hormuz last weekend, the foundation of mutual trust remains very fragile. The U.S. continues to monitor and block Iranian ships at sea, indicating a strong intent to contain; while Iran believes the conditions proposed by the U.S. are unacceptable. Even though Iran showed some flexibility in closed-door meetings, willing to discuss the opening of the strait and the disposal of nuclear materials, from the current developments, the core differences have not truly narrowed. Even if negotiations can be restarted in the future, establishing a long-term, stable mutual trust mechanism remains full of challenges. A more realistic expectation is: in the short term, through multiple rounds of tug-of-war, a phased temporary ceasefire or partial compromise may be reached first, while a comprehensive, balanced long-term peace agreement will require a longer period of game-playing and patience. Additionally, looking at the key timeline, the U.S. is facing pressure from the War Powers Resolution (WPR) According to the law, military actions not approved by Congress must not exceed 60 days but can be extended to 90 days (including withdrawal period). Based on this calculation, late April to May will be a crucial time node for whether the U.S. military withdraws. However, referencing Trump's past governing style, White House staff are highly likely to seek other legal tools or pragmatic interpretations to bypass restrictions and maintain a military presence. Investment View: Leverage the Advantages of Short-term Bonds, Focus on the Long Term, Deploy Steadily Faced with the rapidly changing situation in the Middle East, investors should maintain a long-term strategic asset allocation mindset while appropriately seizing opportunities brought by short-term market volatility. However, they should avoid excessive chasing or expecting to gamble on the outcome of a single event, basing their approach on steady deployment. Previous analysis has pointed out that the bond market has been under pressure recently, mainly due to rising oil prices pushing up inflation expectations. However, as the market prices this in quickly, we have observed that the 1-year forward OIS rate one year from now (1Y1Y OIS) has further increased, approaching the upper limit of the Federal Funds Rate benchmark level. This not only provides technical support for front-end bonds but also indicates that market concerns about U.S. interest rate hikes have somewhat eased. In contrast, the European Central Bank and the Bank of England have already shifted to a more hawkish tone on interest rate hikes in March. The Federal Reserve, bearing the dual mandate of employment and inflation control, is more cautious in policy adjustments, possessing greater operational flexibility to respond gradually based on economic data, rather than rushing to tighten. It is worth noting that this Tuesday (April 21), the Senate Banking Committee will hold a confirmation hearing for Kevin Warsh, Trump's nominee for the next Federal Reserve Chair. This hearing is less than a month away from the end of current Chair Powell's term (May 15). The market will closely watch Warsh's stance on interest rate policy, inflation control, and Federal Reserve independence. Disclaimer Unless otherwise stated, all information in this document is as of the document release date. 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