Takeaways by Axi SelectThe market is pricing the end of the war before it is confirmed, driving a powerful short squeeze and risk rallyDollar weakness is being driven by fading safety demand and a renewed dovish tilt in Fed expectationsOil and Hormuz remain the unresolved anchor, and confirmation of reopening is the key trigger for the next leg lower in the dollarThe market is no longer trading the war. It’s trading the exit.What began as a battlefield defined by sirens and shock has quietly morphed into a negotiation table priced in advance. The tape is not waiting for peace to be signed. It is front-running the handshake.You can see it in the way risk is being carried now, not cautiously, not reluctantly, but with the kind of urgency that only comes when positioning has been caught leaning the wrong way. This was never about fresh optimism. This was about a market that had already sold everything it could find, including the kitchen sink, and then discovered there were no more sellers left to pay.So when headlines shifted, even slightly, from escalation to dialogue, the reaction was not incremental. It was violent. Like a coiled spring released.Asian equities did not just bounce; they exploded higher in one of the strongest rallies in a year. That is not a fundamental conviction. That is positioning being forcibly unwound. The kind of move that tells you the real story was never the war itself, but the way the market had chosen to hedge it.And now the hedges are being torn down.The dollar is taking the hit you would expect when the world moves from survival mode back into opportunity. It is not collapsing because the US suddenly looks weak. It is softening because the need to own safety is being called into question. In a world where energy shock begins to fade at the margin, capital rotates away from the shelter and back into the field.But here is where it gets interesting.Oil is still elevated. The barrel has not rolled over in any meaningful sense. It is still sitting above $100, still reminding everyone that the physical world has not caught up with the financial narrative. The Strait of Hormuz remains unresolved, the plumbing still partially blocked, the flow of energy still constrained.So what the market is really doing is pricing in the idea that the blockage will clear, not the reality that it has cleared.That gap between perception and confirmation is where the next move will be decided.Because if Hormuz reopens cleanly, if the artery of global energy starts pumping again without friction, then the dollar has room to bleed further. That is when you start talking about a deeper unwind of the safety premium, a return toward those pre-panic levels where the dollar was no longer the only game in town.But until that happens, the market is effectively trading on trust.Trust in timelines. Trust in political intent. Trust that when President Trump says two to three weeks, the clock actually means something.That is a dangerous game.You can already see the tension beneath the surface. The US is signalling that reopening the Strait of Hormuz is not its responsibility. Others are being nudged to step in, coalitions are being floated, and solutions are being discussed but not yet executed. It is a reminder that while the narrative has shifted, the infrastructure of peace has not yet been built.And yet, the price keeps moving as if it has.That is the hallmark of a market that is no longer anchored to current reality but to expected reality.FX is where this transition becomes cleanest.EUR/USD is starting to lean higher, not because Europe suddenly looks strong, but because the relative rate story is shifting beneath the surface. The Fed is being gently pulled back toward easing as softer data edges into view, while the ECB remains anchored by inflation risks that refuse to disappear quietly.That divergence matters.If the dollar curve continues to soften while the euro curve holds its ground, even reluctantly, the path higher in EUR/USD becomes less about growth differentials and more about rate gravity. The euro does not need to be loved. It just needs to be less of a discount.USD/JPY, meanwhile, is basically unwinding that huge imported future oil invoiceAnd right now, both forces are in motion.The next catalyst sits in the data.ADP payrolls are not usually a market-moving event, but in this environment, even a modest miss carries weight. Not because it confirms war damage, but because it feeds the narrative that the US labour market is already softening into the shock. That reinforces the idea that the Fed has room to ease this year, which in turn feeds the broader dollar downside story.It is all connected.What we are watching now is not a clean risk-on rally. It is a repricing of fear itself.The market is taking the war premium, shaving it down, and redistributing that capital across risk assets with increasing confidence. But it is doing so ahead of verification, ahead of resolution, ahead of clarity on the single most important variable still hanging over the system: whether the energy artery truly reopens.Until that happens, this is not peace.It is a belief.And belief in markets can carry prices a long way before reality has its say.