Market Matters – War Rages On

Geopolitical escalation has reintroduced a meaningful risk premium,

as the Iran–US–Israel conflict widened across the Gulf, disrupting regional infrastructure and pushing Brent crude above $92 with futures pointing toward $100.

Energy supply concerns intensified,

with tanker traffic through the Strait of Hormuz severely restricted and 7–11 million barrels per day potentially affected. The UAE and Kuwait cut output, reinforcing expectations of a tighter near‑term energy balance.

Global markets repriced risk rather than entering crisis mode,

with equities down 5–6% globally, Europe and Japan weakest, and the US relatively resilient due to domestic energy independence and safe‑haven capital flows.

US macro data turned softer,

as payrolls fell 92,000 and unemployment rose to 4.4%, signalling cooling labour momentum. However, wage growth of 0.4% and surging energy prices complicate the Fed’s path, potentially delaying rate cuts.

Broader global policy signals were cautious,

with the UK OBR trimming 2026 growth forecasts and China setting its lowest growth target in decades (4.5–5%). Markets now hinge on whether the conflict proves temporary or persistent.