--- title: "Ceasefire extension fails to narrow differences, US-Iran negotiation deadlock tests market expectations" type: "Topics" locale: "en" url: "https://longbridge.com/en/topics/40120624.md" description: "Middle East conflict update: US-Iran negotiations stalled, Iran refuses to come to the table, ceasefire extension deepens rift. As the ceasefire deadline looms, the world is watching whether the US and Iran can start a second round of talks, but the news has taken a clear turn. Donald Trump first stated he would not extend the ceasefire upon expiry, but later announced a unilateral extension of the ceasefire arrangement due to receiving messages from mediators and internal disagreements within Iran, while maintaining the blockade on Iranian ports until Iran presents a concrete and unified solution. On the other hand, citing a report from Iran's semi-official media, Tasnim News Agency..." datetime: "2026-04-23T02:08:24.000Z" locales: - [en](https://longbridge.com/en/topics/40120624.md) - [zh-CN](https://longbridge.com/zh-CN/topics/40120624.md) - [zh-HK](https://longbridge.com/zh-HK/topics/40120624.md) author: "[泰康资产管理（香港）](https://longbridge.com/en/profiles/13049407.md)" --- # Ceasefire extension fails to narrow differences, US-Iran negotiation deadlock tests market expectations Middle East Conflict Update: U.S.-Iran Negotiations Stalled, Iran Refuses to Come to the Table, Ceasefire Extension Deepens Rift As the ceasefire deadline looms, the world is watching whether the U.S. and Iran can begin a second round of talks, but the news has taken a clear turn. Donald Trump first stated that the ceasefire would not be extended upon expiry, but later announced a unilateral extension of the ceasefire arrangement due to receiving messages from mediators and internal disagreements within Iran, while maintaining the blockade of Iranian ports until Iran presents a concrete and consistent solution. On the other hand, citing reports from Iran's semi-official Tasnim News Agency, Iran has refused to attend the second meeting originally scheduled for the evening of April 22 in Islamabad, Pakistan, accusing the U.S. of lacking sincerity and deeming the talks meaningless. The U.S. delegation led by Vice President Vance has therefore canceled its trip to Pakistan. Short-term Outlook: Strait Blockade Continues, Localized Risks Remain Against the backdrop of an extended ceasefire but a continued blockade of the strait, the U.S.-Iran negotiation process remains visibly volatile; this rollercoaster process is still largely within the negotiation pattern we previously anticipated. In the short term, regardless of the reason for the ceasefire extension, it at least provides a cooling-off period; in the market, the brief dip at the Asian open this morning (4/22) followed by a rebound shows that investors are gradually desensitized to the lack of progress in talks, with the overall market still in a wait-and-see stage. Going forward, close observation is needed during the extended ceasefire period to see if there will be further contact or indirect negotiations between the two sides. However, given their current hardline stances, the timeline for achieving partial, temporary exchanges of interests is lengthening as they wait to return to the table. Any significant change in the mutual trust mechanism would heighten localized risks. Long-term Outlook: Negotiations Remain a Tug-of-War, Prolonged Deadlock May Weigh on Long-term Economic Recovery Although the ceasefire extension injects a buffer into the current situation and is a relatively positive development, the foundation of mutual trust remains fragile, and core disagreements are not truly resolved. Both sides tend to pursue maximum gains on key interests and are unwilling to accept significant concessions. This tug-of-war can easily deepen the rift, meaning long-term peace will require more time and multiple rounds of games to gradually achieve. More importantly, as the fighting comes under phased control, market focus will gradually shift from "negotiation progress" to the actual impact of post-war economic data. As March economic data is gradually announced, whether oil prices can stabilize and retreat, whether the transmission from the production side (PPI) to the consumption side (CPI) is controllable, and the lag in this transmission data will directly affect the subsequent monetary policy path of the Federal Reserve. If negotiations and the blockade state persist for too long, they will disrupt post-war reconstruction and regional stability recovery, further bringing medium- to long-term uncertainty. 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 cannot exceed 60 days but can be extended to 90 days (including withdrawal period). Based on this calculation, late April to May will be a critical time node for whether U.S. troops withdraw. However, referencing Trump's past governing style, White House aides are highly likely to seek other legal tools or pragmatic interpretations to bypass restrictions and maintain a military presence. Investment View: Leverage Short-term Bond Advantages, Focus on the Long Term, Stable Positioning Faced with the rapidly changing Middle East situation, investors should maintain a long-term strategic asset allocation mindset while appropriately seizing opportunities brought by short-term market volatility. However, they should not excessively chase or bet on the outcome of a single event, focusing instead on stable positioning. 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 risen further, approaching the upper limit of the federal funds rate benchmark. This not only provides technical support for front-end bonds but also shows that market concerns about U.S. rate hikes have eased. In contrast, the European Central Bank and the Bank of England have already shifted to a more hawkish rate hike tone in March. The Federal Reserve, bearing the dual mandate of employment and inflation control, is more cautious in policy adjustments, possessing greater flexibility to respond gradually based on economic data rather than rushing to tighten. It is worth noting that yesterday (April 21), the Senate Banking Committee held a confirmation hearing for the next Fed Chairman, Kevin Warsh. Warsh reiterated during the hearing that controlling inflation is the Fed's primary task while emphasizing the maintenance of Fed policy independence. His overall stance leaned towards steady neutrality. Historically, in the early days of a new Fed Chairman's term, the average yield of U.S. Treasury yields has shown an upward trend (Source: BofA Global Research, 2026/4/17). Therefore, the new Chairman's policy direction and the smoothness of market communication will be one of the key variables for the market. In summary, given Middle East geopolitical risks and policy uncertainty from Fed personnel changes, we recommend investors continue to use short-term bonds as a core hedging position: effectively managing interest rate volatility and geopolitical risks on one hand, while maintaining relatively stable returns on the other, serving as a buffer for overall asset allocation and a foundation for long-term positioning. Disclaimer Unless otherwise stated, all information contained in this document is as of the document date. The above content is for reference only and is intended for general reading by clients of Taikang Asset Management (Hong Kong) Limited ("Taikang HK"). It does not consider the specific investment objectives, financial situation, or any particular needs of any specific recipient and should not constitute advice or an offer or solicitation to buy or sell any investment product. Any research or analysis used in preparing this document was obtained by Taikang HK for its own purposes and from sources believed to be reliable as of the document date, but no representation or warranty is made as to the accuracy or completeness of information from third parties. Any forecasts or other forward-looking statements regarding future events or performance are not necessarily indicative and may differ from actual events or results. Any opinions, estimates, or forecasts may change at any time without prior notice. Taikang HK shall not be liable for any losses arising from the use of this document. The views, recommendations, suggestions, and opinions expressed in this document do not necessarily reflect the position of Taikang HK and may be changed at any time without notice. Taikang HK also has no obligation to provide any updates on such information or opinions. This document may not be reproduced, distributed, or transmitted to any person without the prior written approval of Taikang HK. 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