Weekly Analysis

Global markets moved into a risk-sensitive phase this week as stalled US–Iran negotiations and renewed tensions in the Strait of Hormuz reshaped sentiment. Safe-haven demand returned as reports of naval activity and continued blockades signaled that a quick resolution remains unlikely. With the key shipping route still largely restricted, energy prices surged, feeding directly into inflation concerns and shifting expectations across currencies, commodities, and bond markets.

Global markets navigated a volatile week as shifting signals from the United States–Iran conflict kept sentiment fragile. Early optimism around a potential resolution, including claims of a 10-day ceasefire between Israel and Lebanon and the reopening of the Strait of Hormuz, briefly eased inflation concerns and reduced safe-haven demand. However, conflicting developments, including renewed uncertainty over the blockade and energy supply risks, kept oil prices elevated and prevented a full recovery in risk appetite.

Global sentiment shifted this week as markets balanced high-stakes diplomacy in Islamabad with a severe energy supply squeeze. While talks between US and Iranian officials provided a fragile glimmer of hope, the US-led blockade of the Strait of Hormuz, triggered by a breakdown in weekend negotiations, sent Brent crude surging 8% to approximately $103/barrel.

Global markets remained in a state of high-tension equilibrium this week as President Trump extended a strike deadline to April 6, providing a 10-day window for a potential deal with Tehran. Despite this temporary pause on targeting energy sites and the passage of 10 tankers through the Strait of Hormuz, market skepticism remains high. Brent crude surged past $111/barrel, its highest since 2022, as the Pentagon weighed further troop deployments and Iran rejected the latest US 15-point plan.

Global markets remained under pressure as the conflict in the Middle East entered a more volatile phase, driving Brent crude past $110/barrel, which is its highest level since mid-2022.

Global markets faced significant upward pressure on yields and energy prices this week as the conflict in the Middle East entered its third week. The US Dollar Index surged above 100.3, its highest since May 2025, fueled by safe-haven flows and Defense Secretary Pete Hegseth's announcement of the largest planned strike wave against Iran to date. Brent crude breached the $105 threshold following strikes on Kharg Island and warnings that 90% of Iran’s export facilities could be targeted.

Global sentiment was dominated this week by the second week of the war with Iran and the effective blockade of the Strait of Hormuz, driving Brent crude prices above $100/barrel. Despite a catastrophic US labor report showing a loss of 92,000 jobs in February, safe-haven demand pushed the US Dollar Index to 99.1. The energy shock has ignited fears of "stagflation," particularly in Europe and Japan, as soaring fuel costs threaten to reverse recent disinflationary trends.

Global markets began the week in a state of high alert following coordinated US and Israeli strikes on Iran over the weekend, which resulted in the death of Supreme Leader Ayatollah Ali Khamenei.