President Donald Trump announced that the US will begin escorting ships through the Strait of Hormuz on Monday in an effort he dubbed 'Project Freedom.' According to latest reports, Trump said his representatives are having 'very positive discussions' with Iran as the two countries trade peace proposals. US special envoy Steve Witkoff told CNN earlier that 'we're in conversation' when asked about the state of discussions with Iran. The announcement comes as Iranian Foreign Ministry spokesperson Esmaeil Baghaei said that the US has responded to Iran's proposal via Pakistan and that Tehran is reviewing Washington's reply.
Emerging-market benchmarks for stocks and currencies advanced in thin holiday trading, with the MSCI Emerging Markets Index ending 0.1% higher. According to reports from Bloomberg, United Arab Emirates stocks, including First Abu Dhabi Bank PJSC and ADNOC Drilling Co., contributed most to the gains. An EM currency index rose 0.1%, helped by gains in the Hungarian forint and Polish zloty. The Mexican peso and South African rand, bellwethers for risk appetite, both strengthened against a weaker dollar.
The market movement came as Iran delivered a new proposal to the US via Pakistan over the Strait of Hormuz, pushing crude lower. As reported by Bloomberg, oil moved 4.4% lower on Friday, paring the week's advance amid hopes for a deal to end the Iran war. However, recent developments show Tehran's proposal does not include the nuclear issue, according to Iranian officials. Additionally, Baghaei also said 'the claim of mine-clearing in the Strait of Hormuz by the US is fundamentally not part of our plan.' The latest comments come as more than 2,600 people have been killed in Israeli strikes on Lebanon since March 2, despite a ceasefire between Israel and Lebanon that has been in place for more than two weeks.
Maritime security concerns have intensified with reports of recent attacks. According to the United Kingdom Maritime Trade Operations (UKMTO), a bulk carrier sailing near the coast of Iran has reported being 'attacked by multiple small craft' around 11:30 a.m. UTC (7:30 a.m. ET) this morning. The incident took place about 11 nautical miles west of Sirik, Iran, with the crew reported safe and no environmental impact of the attack. The US average price of regular gas has increased nearly 50% since the start of the Iran war on February 28, highlighting the economic impact of the ongoing conflict.
Political tensions have escalated over constitutional authority regarding the Iran war. The top Democrat on the Senate Armed Services Committee, Rhode Island Sen. Jack Reed, pushed back on US Defense Secretary Pete Hegseth's claim last week that the ongoing ceasefire constituted a 'pause' in the 60-day period in which the president is constitutionally allowed to use force abroad without congressional authorization. Reed stated that 'The language of the statute does not provide for timeouts like in a football game,' emphasizing that the president must comply with the law. Meanwhile, German Chancellor Friedrich Merz downplayed any connection between the US announcing the withdrawal of 5,000 troops from Germany and friction with Trump over the Iran war.
