Prolonged Stress Test Lurks For Global Markets As War Continues

Markets are entering a sixth week of stress as the war with Iran continues unresolved, with disruptions to energy exports through the Strait (of Hormuz) sustaining a global shockwave. Expect elevated oil and commodity price volatility and persistent risk-off positioning with spillovers to FX, credit spreads and growth until energy flows approximate normal levels.

Analysis

Markets are entering a sixth week of stress as the war with Iran continues unresolved, with disruptions to energy exports through the Strait (of Hormuz) sustaining a global shockwave. Expect elevated oil and commodity price volatility and persistent risk-off positioning with spillovers to FX, credit spreads and growth until energy flows approximate normal levels.