U.S. markets reopened today after the Easter weekend. European markets remained closed for Easter Monday.

Global markets will be fully operational tomorrow — the day of the new deadline for Iran.

With that, Trump held a press conference today at the White House, where he detailed the rescue of the downed pilots over the Easter weekend.

Hegseth (Secretary of War) framed it like this: "the pilot was shot down on Good Friday … hid in a mountain crevice through Saturday … rescued as the sun rose on Easter Sunday."

They've given Iran until 8 PM Tuesday to agree to a deal, and open up the Strait of Hormuz.

On the deadline, Trump said: "After that, they're going to have no bridges. They're going to have no power plants. Stone ages" — every bridge and every power plant in Iran destroyed within four hours.

On oil: Asked whether the U.S. would charge tolls on the Strait of Hormuz, Trump responded: "What about us charging tolls?" So, the question of who controls the Strait is now being discussed openly from the White House podium.

On Venezuela as the template for Iran: "To the victor belong the spoils." Trump confirmed over 100 million barrels of Venezuelan oil already refined in Houston, and said the war "paid for itself many times over." Asked about Iran's oil, he said: "If I had my choice …"

As we discussed last week, it's safe to assume the plan hasn't changed since Trump's 1987 interview: eradicate the regime, take the oil, remove the leverage.

On NATO: He listed every ally that refused to help, saying "they've actually gone out of their way not to help. They didn't even want to give us landing strips."

Perhaps because they know what this war leads to: a day of reckoning for the current European political and economic model.

As we've discussed, sustained higher energy costs squeeze the budgets of more fiscally fragile countries in Europe. It's already ramping inflation pressures, higher interest rates, higher debt service costs, and a weaker economy. And that can push the fiscally fragile countries in Europe to fiscally broken.

With that in mind, the EU's Energy Commissioner said publicly that even a quick ceasefire won't normalize prices "in the foreseeable future."

And ECB Governing Council member Fabio Panetta has talked about financial stability risks, warning that energy market tensions could hit government bonds in high-debt countries.

But the Iran conflict is not the cause, it's the accelerant.

The European energy shock exposes the structural flaws of the common currency (the euro — i.e. the lack of fiscal union), and the anti-oil policies Europe has pursued over the past decade (divesting of domestic production and exploration).

With the potential for escalation this week, the chart below is the one to watch …

The ratio of European to U.S. natural gas prices — currently at 6x.

In 2022, when Russian supply was cut, it hit a daily high of 15x.

While the ratio has doubled since the beginning of the war, the market isn't pricing the Trump deadline (and associated threats to supply) as a serious risk.  

Below, you see the key events and major moves in this ratio over the past decade. The 6x cost of European nat gas, compared to U.S. nat gas is far from peak levels.