Washington and Tehran both play it cool

Hello, this is Anniek Bao writing to you from Singapore. Welcome to another edition of CNBC’s Daily Open.

Markets ended last week convinced that a Strait of Hormuz deal was nearing, while Iran spent the weekend insisting that it is not in the room negotiating with the U.S.

Trump told Axios that Washington is “low keying it” and “only semi-negotiating” with Tehran. Iran’s foreign minister says there are no direct talks, aside from messages passed through intermediaries. Oman is closing in on an agreement around transit routes, but Tehran has been careful to make it clear that a shipping arrangement is not the same thing as reopening the waterway.

Traders now price a roughly 44% chance the Fed raises rates in September, down from 67% a week earlier, per CME’s FedWatch tool. But the CPI print due this week, or a collapse of a Hormuz deal, could push those odds right back up.

Iranian foreign minister Abbas Araghchi said Tehran is not in direct negotiations with the U.S. to end the war and reopen the Strait of Hormuz, saying that “messages are being exchanged through intermediaries.”

In a Sunday interview with Axios, U.S. President Donald Trump said that Washington is “low keying it” in negotiations with Iran.

“We are only semi-negotiating with them. We are just watching Iran with its huge inflation and the fact that they have no money,” the president said. “It will work out. It always works out. It’s like a chess game.”

U.S. stock futures moved to price in the growing doubts over progress to reach a deal that reopens the Hormuz, with S&P 500 futures slipping about 0.2%, Nasdaq-100 futures holding flat, and Dow Jones Industrial Average futures losing 0.3%.

Investors will look for the consumer and producer price index readings due out this week for the latest insights on inflation.

Meanwhile, Israeli Prime Minister Benjamin ⁠Netanyahu restated his rejection of Trump’s latest Gaza plan in televised remarks to his right-wing government on Sunday, even as Israel’s military has effectively halted attacks in the territory under pressure from ​Trump.

Trump announced last month that there had been a breakthrough in his plan to end the war, with Israeli forces withdrawing as Hamas disarms and an International Stabilization Force working with a new Palestinian police force to secure the enclave.

“Israel does not accept the 15-point document,” Netanyahu said at the start of a meeting ​with cabinet ministers, saying the Israeli military will not withdraw until Hamas is disarmed.

Axios’ Barak Ravid said a senior US official told him the White House is not bothered by Netanyahu’s statement and sees it as part of the election season in Israel.