Tonight marks another key moment in the ongoing geopolitical escalation: Donald Trump’s latest deadline for Iran to reopen the Strait of Hormuz and reaching a deal expires at 8pm ET (2am CET).

It is already the fourth adjustment of this ultimatum, raising the key question: Will this deadline going to be moved again?

Meanwhile, reality on the ground tells a different story.
Both sides continue military actions, with Iran intensifying activity across the Persian Gulf.

Markets: continue to show remarkable resilience.

• Equities: broadly down - however show high resilience to the developments

• Bonds: yields almost unchanged - US 10y yield at 4.32% - Japan 10y 2.41%

• Commodities: oil prices higher again - WTI crude oil USD 114/barrel and Brent at USD 108/barrel. Precious metals fluctuate - silver at USD 72/oz and gold almost at USD 4’700/oz

• Currencies: USD falls while Swiss franc loses ground against the euro

• Cryptos: lower - Bitcoin USD 68k

• Volatility: The VIX fairly up to 27

My View:The situation is becoming increasingly concerning.

The White House appears overwhelmed by the dynamics of this conflict. What initially may have been perceived as a controlled escalation has clearly moved beyond predictable boundaries.

Repeated deadline extensions, combined with increasingly aggressive rhetoric, highlight a lack of strategic clarity. The tone and threats coming from Washington are unprecedented in modern times and reflect weakness rather than strength and definitely crossed a red line.

From a market perspective, the key framework remains unchanged, as I outlined in the latest Weekly Market Snapshot sent out over the weekend.

Scenario 1: reaching a deal (low probability):
Relief rally in equities, lower yields, sharp decline in oil, precious metals higher.

Scenario 2: prolonged conflict (base case):
Higher oil, supported precious metals, rising yields, falling equities.

Two days later, I continue to firmly lean toward the second scenario.

The Strait of Hormuz and the oil remains the single most important barometer. Sustained levels above USD 100 are no longer a temporary spike. Infrastructure damage lead to future disruptions and are increasingly pointing toward structural supply issues.
This is critical, as higher energy costs feed directly into inflation, central banks lose flexibility and economic growth comes under pressure.
In Asia, the stress is already visible, with countries facing increasing oil and gas shortages.

Markets are far too optimistic and continue to underestimate the severity of the situation. The current resilience in equities is not a sign of strength. It is a sign of complacency.

Risk-reward is highly asymmetric. Therefore my stance remains unchanged:

• Stay cautious

• Avoid adding risk

• Be prepared for volatility spikes

This environment is not about chasing returns, it is about protecting capital and waiting for better opportunities.

Yesterday in the US, followed by Asia and Europe this morning, markets staged a notable relief rally. The move appeared broad-based and aggressive — but the underlying drivers suggest something very different from a genuine shift in trend.

On the geopolitical front, rhetoric remains highly unstable. Donald Trump signaled openness to ending the war within weeks, even if the Strait of Hormuz remains disrupted. At the same time, Iran continues to escalate: threats of direct attacks on US interests and a parliamentary move to impose tolls on ships transiting the Strait underline that tensions are far from resolved.

Markets: strong relief rally

• Equities: see a strong day with Tech stocks in the lead, up more than 3%

• Bonds: yields lower - US 10-year Treasury yield at 4.31%

• Commodities: oil prices stable after a short dip - WTI crude oil USD 100/barrel and Brent towards USD 104/barrel. Precious metals gain - silver at USD 74/oz and gold above USD 4’720/oz

• Currencies: USD falls

• Cryptos: small gains - Bitcoin USD 68k

• Volatility: The VIX declined sharply, falling to 25 from above 30.

My View: Most market participants attribute the rally to political headlines suggesting a potential end to the conflict. That interpretation is too simplistic, and likely wrong.

This move has all the characteristics of a technical rally, not a fundamental one.

We are at month-end and quarter-end, following a period of negative performance. This matters.

• Institutional portfolios, pension funds drifted away from target allocations due to falling equity and bond markets

• Rebalancing flows forced large-scale equity and bond buying

• CTAs were persistent sellers throughout the month — one of the longest stretches — and are now reducing pressure

• Short sellers, sitting on profits, were pushed to cover positions

This combination creates powerful upward moves, but they are flow-driven, not conviction-driven

There is no real change in the macro or geopolitical backdrop. This is not de-escalation. It is noise within an ongoing crisis. The core issue remains untouched: the situation around the Strait of Hormuz.

As long as this critical artery for global energy supply remains at risk, or partially impaired, the market is structurally exposed. Oil prices reflect this reality far more accurately than equities currently do.

That divergence is unlikely to persist.

Positioning takeaway:

• No panic

• No FOMO

• Do not chase this rally

These types of rallies are the most dangerous. They create the illusion that the worst is over - it isn’t.

The risk remains that markets will need to reprice again, potentially more aggressively, once the temporary support from calendar effects fades.

A disciplined approach remains key.

European data released today is increasingly pointing toward a stagflationary backdrop.

The European Economic Sentiment Indicator dropped sharply, accompanied by a notable decline in consumer confidence. At the same time, consumer inflation expectations moved higher, highlighting growing concerns about persistent price pressures.

Germany added to this picture: inflation accelerated in March from 1.9% to 2.7%, reinforcing the view that price dynamics are turning upward again, despite weakening growth signals.

In the afternoon, Fed chairman Jerome Powell highlighted that the ongoing oil price shock is adding further pressure to inflation. He confirms what markets have started to realize: the spillover effects from the Middle East conflict, feeding directly into the macro environment.

Markets: investors try to buy the dip despite continuing rise in the oil prices

• Equities: moved higher in Asia in Europe, started positive in the US

• Bonds: yields lower - US 10-year Treasury yield at 4.35%

• Commodities: oil prices continue to rise - WTI crude oil USD102/barrel and Brent towards USD 112/barrel. Precious metals gain - silver at USD 70/oz and gold above USD 4’520/oz

• Currencies: USD gains

• Cryptos: slightly up - Bitcoin USD 67k

• Volatility: The VIX declines, however remains above 30.

My View: War headlines will remain the key market driver in the short term. However, it is critical not to lose sight of the underlying macro shift. The Middle East conflict has already triggered an oil price shock. This shock is far from over.

With high probability, we are going to see the classic setup of stagflation: slowing growth combined with rising inflation.

This puts central banks in a difficult position. If they want to maintain credibility around their 2% inflation targets, they will be forced to stay restrictive. The ECB is increasingly likely to move toward further tightening, while the Fed may remain on hold for longer, pushing back against the market’s expectation of rate cuts.

A repricing of the interest rate path inevitably leads to a repricing of equity valuations. The bond market has already adjusted significantly. Equities, however, still appear to be in a phase of denial, supported by residual liquidity and a “buy-the-dip” mentality that has worked for years.

This divergence is unlikely to persist. A cautious stance remains key. Downside risks are elevated, while the potential for meaningful short-term upside appears limited. For long-term opportunities to emerge, markets need to reprice first. A phase of panic selling would provide the most attractive entry points to gradually redeploy cash.

Investors continue to position for a ceasefire in the Middle East, effectively trading on hope, betting that diplomacy will prevail and that a worst-case energy shock can still be avoided.

The reality, however, remains far more complex.

The proposed 15-point ceasefire plan by US President Donald Trump has been rejected by Iran. Current Iranian leadership is not only dismissing the proposal but also ruling out negotiations altogether. At the same time, threats are expanding beyond the Strait of Hormuz, with warnings of potential disruptions in the Red Sea. Such a scenario would force vessels heading towards Europe to reroute around South Africa and the Cape of Good Hope, adding roughly 10 to 15 days to shipping times and significantly increasing global supply chain pressure.

Meanwhile, attacks on energy infrastructure continue.

Markets: negative correlation to oil

• Equities: gains

• Bonds: yields lower - US 10-year Treasury yield at 4.33%

• Commodities: oil prices fall - WTI crude oil USD90/barrel and Brent towards USD 101/barrel. Precious metals gain back some of the losses - silver at USD 72/oz and gold above USD 4’550/oz

• Currencies: USD stable

• Cryptos: up - Bitcoin USD 71k

• Volatility: The VIX declines to 25

My View: In my view, markets are underestimating the risk of further escalation. I personally expect another round of escalation.

The current positioning reflects optimism, but not the underlying reality. The geopolitical situation remains highly fragile, and the probability of another escalation phase is still elevated.

The US administration appears increasingly constrained. Following the previously communicated 48-hour deadline, the situation has evolved into a delicate balancing act, with limited room to maneuver without losing credibility.

At the same time, signs pointing towards a potential increase in military involvement, including the possibility of ground troop deployment, are rising. This would mark a significant step up in escalation.

From a market perspective, this creates an asymmetric risk profile:

• A renewed spike in oil prices remains highly likely

• Equity markets would come under pressure

• Bond yields could move higher again, implying losses for bond investors

The behavior of precious metals remains less straightforward in the short term. Recent weakness suggests that forced selling, potentially from emerging market central banks needing liquidity or defending currencies, has played a role. Should this pressure ease, the structural safe-haven demand could reassert itself.

What remains critical:
Markets are still driven by headlines, not fundamentals.

Positioning based on hope rather than confirmed developments carries elevated risk. Direction can shift rapidly, and often abruptly, with each new headline.

Conclusion:
Avoid chasing current market moves. The risk-reward profile at this stage does not justify aggressive positioning.

March PMI (Purchasing Managers’ Index)* readings are beginning to reflect what wars eventually trigger far beyond the battlefield: rising uncertainty, weaker demand, and more cautious corporate behavior.

Across Europe, growth momentum is clearly fading:

• Germany’s private-sector activity slowed to a three-month low

• France contracted at its fastest pace since October

• The UK recorded its weakest reading since September

In the US, the picture is similar. The service sector, previously the key driver of resilience, is now weakening more visibly. Manufacturing instead, sees a slight uptick.

This suggests that the Middle East conflict is no longer just a geopolitical risk, it is increasingly feeding into real economic activity, already after 3 weeks after the conflict started.

Markets: moving reverse to yesterday’s relief rally

• Equities: Asian markets followed the US rebound this morning, but globally equities are lower again, giving back most of the previous gains

• Bonds: yields higher - US 10-year Treasury yield at 4.40% (+5bps)

• Commodities: oil prices resume its upward trend moving towards pre Trump post level - WTI crude oil above USD92/barrel and Brent towards USD 104/barrel. Precious metals remain stable with silver at USD 69/oz and gold above USD 4’400/oz

• Currencies: USD stronger again

• Cryptos: broadly falling - Bitcoin falling below USD 70k

• Volatility: The VIX is up again to 28

My View: What stands out is the shift in growth dynamics:
The service sector — the backbone of recent economic resilience — is now showing clearer signs of weakness than manufacturing. This is a meaningful change and typically an early warning signal.

Markets, however, continue to oscillate between optimism and reality, heavily driven by headlines rather than fundamentals.

As highlighted in my latest Weekly Market Snapshot, the Nasdaq is trading near the lower bound of its sideways range. A break below this level could trigger a more pronounced sell-off, driven by systematic and technical strategies. In such an environment, moves tend to accelerate quickly.

At the same time:

• Oil prices remain a key risk driver. Without a resolution around the Strait of Hormuz, a second leg higher remains likely

• Rising yields are tightening financial conditions further, adding pressure on valuations and future refinancing

• Precious metals may stay volatile short-term, but the broader setup remains constructive, pullbacks could present opportunities

Overall, the environment remains highly fragile: Too many risks are currently building up, geopolitical, macro, and technical.

This is not the time to aggressively deploy cash into risk assets.

*PMI (Purchasing Managers’ Index) is considered a leading indicator for economic activity. A reading below 50 signals contraction, while a reading above 50 indicates expansion.

US President Donald Trump has postponed threatened military strikes against Iranian energy infrastructure for five days, citing “very good and productive talks” with Iran. The decision delays a previously issued ultimatum that demanded the reopening of the Strait of Hormuz within 48 hours.

However, Iran publicly denied that any negotiations are taking place, stating there has been neither direct nor indirect communication.

At the same time, tensions on the ground remain elevated. The United Arab Emirates reported new Iranian drone and missile attacks. Israel expanded airstrikes on infrastructure in Tehran. The Strait of Hormuz remains effectively blocked.

In the meanwhile Iran allowed selective passage only to friendly nations such as India. In countries like Japan, concerns over supply shortages have already led to initial panic buying of everyday goods.

According to IEA (International Energy Agency), more than 40 energy facilities across nine countries have already been severely damaged. The agency warns that disruptions to global supply chains could persist even after the conflict ends.

Markets: Markets reacted immediately to Trump’s post.

• Equities: markets jumped in few seconds 3 to 4% ending the day up around +1%Bonds: yields declined - US 10-year Treasury yield down to 4.35% from 4.45%

• Commodities: oil fell sharply - WTI crude oil below USD90/barrel and Brent below USD 10/barrel, while precious metals regained with silver close to USD 70/oz and gold above USD 4’400/oz

• Currencies: USD weakened

• Cryptos: up with risk-on stance - Bitcoin around USD 70k

• Volatility: The VIX fell immediately, remains elevated at 26.

My View: Speculative capital is quickly moving back into risk assets, chasing short-term momentum. Yes, those positioned ahead of the headline could realize rapid gains. But for most participants, this type of environment tends to burn capital rather than create it.
Today’s price action increasingly raises one more time again questions around information asymmetry. The speed and magnitude of reversals suggest that some market participants may be acting ahead of public information.
In earlier times, such a headline-driven reversal would have raised serious questions around market integrity.

What we are seeing is a textbook example of hope-driven pricing. The underlying situation has not changed as the Strait of Hormuz remains blocked, military escalation continues, negotiations taking place are not confirmed and as supply disruptions are already material and expanding.

Yet markets react as if a resolution is imminent. This creates a dangerous setup. More importantly:
The warning from the International Energy Agency is being ignored.

This is not a minor disruption, it is a structural shock to global energy supply, with second-round effects on inflation, growth, and supply chains.
Markets are once again choosing to focus on potential positive outcomes while disregarding current realities.

There is no need to chase a relief rally driven by unconfirmed headlines. Fresh capital should only be deployed when: the situation shows clear and verifiable signs of stabilization with the Strait of Hormuz is effectively reopened and overall escalation risks are materially reduced. Until then, maintaining a disciplined and cautious positioning remains the more rational approach.

This week is dominated by a dense schedule of central bank decisions, with markets closely watching both policy signals and forward guidance.
Tonight, the Federal Reserve (Fed) will announce its latest interest rate decision, followed by the press conference with Jerome Powell. Market consensus expects the Fed to remain on hold. However, the focus will be less on the decision itself and far more on Powell’s tone, forward guidance, and any signals regarding the balance between inflation risks and slowing economic momentum.

Earlier today, the latest US Producer Price Index (PPI) added an important piece to the puzzle. Producer prices rose by 0.7% month-over-month in February 2026, accelerating from 0.5% in January and significantly above expectations of 0.3%. This marks the strongest increase in seven months and reinforces the view that inflationary pressures are re-emerging rather than fading.

Yesterday, the Reserve Bank of Australia (RBA) raised interest rates by 25 basis points to 4.1%, in line with expectations, signaling continued vigilance on inflation.

Today, the Bank of Canada (BoC) held its policy rate unchanged at 2.25%, also as expected.

Tomorrow will be particularly important, with four major central banks announcing their decisions: the Bank of Japan (BoJ), the Swiss National Bank (SNB), the Bank of England (BoE), and the European Central Bank (ECB). All are currently expected to keep rates unchanged.

Markets: driven by headlines from Middle East - optmistic investors

• Equities: fell in the red zone during afternoon session

• Bonds: no major moves, only with a slight uptick - US 10-year Treasury yield 4.23%

• Currencies: USD gaining more ground, the Swiss franc weakens with intervention by the SNB

• Commodities: oil climbs - WTI crude oil at USD 98/barrel and Brent at USD 108/barrel, while precious metals fall with stronger USD

• Cryptos: losing ground - Bitcoin down to USD 71k after reaching 76k

• Volatility: The VIX only a bit higher towards 24

My View: We continue to see a dangerous and even growing divergence between market expectations and macro reality, guess driven by liquidity available almost endlessly.

Some investors are already positioning for rate cuts, driven by rising recession fears linked to higher oil prices. However, this view ignores a critical constraint: Rising inflation, led by the oil shock, limits central banks’ ability to cut rates. Current data and news point toward a stagflationary setup: higher inflation, slowing growth, limited policy flexibility.

At the same time, markets continue to price: a quick end to the Middle East conflict and contained impact from higher energy prices.

Both assumptions appear overly optimistic. First signs of energy stress are already emerging in several countries, and the longer the disruption persists, the more visible the macro impact will become.

In this environment, chasing short-term upside based on hopes of quick resolution or supportive central bank action carries significant risk. There is currently no compelling reason to increase speculative exposure to equities at these levels. On the contrary, the risk-reward profile suggests a more cautious approach.

Position for lower equity levels rather than chasing upside driven by hope.

The Iran war has now entered its third week, and the developments over the weekend point more toward further escalation rather than de-escalation.

Iranian leadership reiterated that it remains unwilling to engage in ceasefire negotiations, while attacks on neighboring countries and energy infrastructure continue. At the same time, the Strait of Hormuz remains effectively closed, keeping global energy markets under significant pressure.

US President Donald Trump is now urging NATO members and Asian countries — including China — to contribute naval forces to help reopen the narrow passage through which roughly 20% of global oil supply normally flows.

So far, however, no sustainable solution has emerged to guarantee the safe passage of tankers.

Markets: 

• Equities: move higher

• Bonds: yields are slightly falling - US 10-year Treasury yield 4.24%

• Currencies: USD falling back after recent strength

• Commodities: oil falls on hopes - WTI crude oil at USD 94 per barrel, while precious metals unchanged

• Cryptos: small rally - Bitcoin at USD 73k

• Volatility: The VIX falls back to 24

My View: Today’s buys just rely on hope. At this stage, there is little justification to bet on a quick end to the conflict.

Markets appear increasingly willing to price in optimistic headlines, but the underlying geopolitical reality suggests that a prolonged disruption remains a very plausible scenario.

Trading markets purely on the expectation of positive war headlines is typically a high-risk strategy. Such trades often turn into losses before eventually working out, if they work out at all.

Although I see several potential investment opportunities that have been developing over the past weeks, I deliberately refrain from adding risk at this stage. My base case remains that equity markets could trade lower, which would likely create more attractive entry levels to selectively accumulate positions.

For now, patience remains the more disciplined strategy.

Today’s US inflation data came broadly in line with expectations, but it had only a limited impact on markets. The February CPI report showed that inflation pressures remain present while the market’s main focus continues to lie elsewhere: geopolitics and energy prices.

The US Consumer Price Index rose 0.3% month-over-month in February, slightly accelerating from the 0.2% increase in January and matching market expectations. On an annual basis, inflation held steady at 2.4%, unchanged from the previous month and remaining at the lowest level since May 2025.

Markets: rebound stalled

• Equities: broadly lower

• Bonds: yields moved higher again driven by the renewed rise in oil prices. The US 10-year Treasury yield climbed back to around 4.23%

• Currencies: The US dollar strengthened, reflecting rising yields and renewed uncertainty

• Commodities: Energy markets remain the dominant driver. WTI crude oil climbed back to around USD 88 per barrel, while precious metals eased slightly after their yesterday’s rally.

• Cryptos: short rally lost momentum - Bitcoin stabilizing at USD 70k

• Volatility: The VIX remains elevated around 24

My View: Today’s inflation data is largely a side note.

While the February CPI reading remains above the Federal Reserve’s 2% inflation target, it reflects past price developments rather than the forward-looking inflation risks now emerging.

The key variable for markets has become energy supply and oil prices.

If the disruption of oil flows persists – particularly due to the closure of the Strait of Hormuz – energy prices are likely to remain elevated and could move significantly higher. This would inevitably feed into higher future inflation expectations.

At this stage, the trajectory of markets depends primarily on how the geopolitical conflict evolves and whether global energy supply disruptions continue.

An immediate resolution would likely calm markets quickly. However, based on the current dynamics, a rapid solution appears unlikely.

For now, markets will remain highly sensitive to developments around the conflict and oil supply, while macroeconomic data and corporate fundamentals are likely to play only a secondary role.

Markets rebounded after a sharp risk-off move earlier in the week, following comments by Donald Trump suggesting that the conflict with Iran could end “very soon.” During a press conference, Trump stated that he expects the assault to end shortly, while at the same time warning that the United States would launch additional strikes should Iran attempt to block global energy flows through the Strait of Hormuz.

The remarks triggered a relief reaction across financial markets. Oil prices fell sharply after their previous surge, easing immediate inflation concerns and allowing risk assets to rebound.

However, the geopolitical situation remains far from resolved. Iranian leadership has reportedly warned that not “one liter of oil” will be allowed to transit the Strait of Hormuz if US and Israeli attacks continue. Iran’s foreign minister also dismissed the possibility of ceasefire negotiations with Washington.

At the same time, Israeli Prime Minister Benjamin Netanyahu stated that the military campaign is “not done yet,”indicating that Israel’s strategic objective remains the dismantling of Iran’s ruling clerical regime.

Markets: the oil pullback sparks risk rally

• Equities: Global equities are seeing a rebound

• Bonds: Yields eased with energy prices retreating - US 10-year Treasury fell back to 4.11%

• Currencies: USD weakened markedly, EUR/CHF rising back above 0.90

• Commodities: Oil prices corrected sharply after their recent spike - WTI fell back below USD 80/barrel (-15%) while precious metals moved higher - Gold: USD 5220/oz and silver USD 89/oz

• Cryptos: joined the risk-on stance - Bitcoin back at USD 71k

• Volatility: The VIX declined to 22

My View: Markets are currently extremely headline-driven, reacting to every political statement rather than to the structural risks of the situation.

I am surprised by the market reaction. There is still absolutely no clarity on the duration of the Iran war or how long disruptions to global energy flows could persist. Yet markets are already behaving as if the conflict is close to being resolved.

However, the divergence in rhetoric highlights that the conflict still carries significant escalation risk. The comments from President Trump were clearly aimed at calming markets. However, they do little to change the underlying realities on the ground. Military operations continue, and the threat of disruptions in the Strait of Hormuz remains significant.

This kind of environment often leads investors to chase short-term news flow instead of assessing the bigger picture. History shows that reacting emotionally to headlines usually means running behind the market rather than ahead of it, leading to more to losses than gain

At this stage, the key question remains unchanged: How long will the conflict last, and how long will energy flows remain disrupted?

Until clearer answers emerge, I expect volatility to remain elevated and equity indices to face further downside from current levels while oil prices could see higher levels again.

The war involving Iran has now entered its first week with no visible signs of de-escalation. Military operations continue and geopolitical tensions across the region remain elevated.

At the same time, the closure of the Strait of Hormuz is disrupting global energy flows, pushing oil prices sharply higher.
Brent crude has surged above USD 91 per barrel (+25% WoW) while WTI crude trades above USD 88 (+33% WoW).

This represents one of the fastest weekly oil price increases in recent years and significantly raises the risk of renewed inflationary pressure globally.

Today’s US economic data added another layer of concern:

• Labour market: The US economy shed 92k jobs in February, the largest decline in four months. January payrolls were revised lower to +126k, and the figure came far below expectations of a +59k increase. At the same time unemployment rose to 4.4% (est. 4.3%).

• Retail sales: US retail sales fell 0.2% in January, marking the first monthly decline since October and signalling weakening consumer momentum.

Markets: broad risk off move

• Equities: Global equities moved lower, with losses led by European markets and US technology stocks.

• Bonds: Yields rose as higher oil prices increased inflation concerns - US 10-year Treasury to 4.17%

• Currencies: USD broadly unchanged while CHF strengthened

• Commodities: Broad gains across the complex, led by oil (+8% intraday) and precious metals.

• Cryptos: fell sharply, with Bitcoin falling toward USD 68k (-5%)

• Volatility: The VIX jumped above 27, levels last seen in November

My View: As highlighted already last weekend in my “Weekly Market Snapshot”, this is not the moment to add additional risk exposure.

Until mid-week, markets clearly underestimated the potential duration and economic impact of the conflict. The assumption that the situation would stabilize quickly now appears overly optimistic.

At the same time, the surge in oil prices represents one of the fastest weekly increases in recent years, significantly raising the risk of renewed global inflationary pressure.

If the closure of the Strait of Hormuz persists, the economic implications could become substantial:

• structurally higher energy prices

• renewed inflationary pressure

• higher bond yields

• weaker consumer demand

• a drag on economic activity

• a broader economic slowdown

At the same time, recently weaker US labour market data is already hinting at a potential shift in monetary policy expectations. Historically, the Federal Reserve has tended to place greater weight on labour market deterioration than on inflation risks when both forces move in opposite directions.

This creates a challenging policy environment: rising energy-driven inflation combined with a weakening labour market could force the Fed to consider rate cuts even as inflation pressures rise.

Such a mix increases macro uncertainty and in combination with geopolitical tensions, this historically tends to trigger a repricing across risk assets, particularly equities and cryptos.

At this stage, there are no clear signs that the conflict or the disruption of energy flows will end anytime soon.

For now, maintaining a cautious positioning remains the prudent approach.

Yesterday’s trading session in Europe and this morning in Asia initially showed signs of panic, with sharp declines across several equity indices. Even traditional safe-haven assets such as gold temporarily lost ground, indicating forced liquidations and a broader risk-off reaction.

However, the situation stabilized quickly. The US market appeared far less vulnerable and was comparatively resilient, likely reflecting its lower direct exposure to potential disruptions in Middle Eastern oil and gas flows. As a result, US equities recovered and are now trading even above the levels seen before the conflict with Iran began.

Markets:

• Equities: Rebounded, led by US technology stocks

• Bonds: Yields moved higher, with the US 10-year Treasury rising back to around 4.10%

• Currencies: USD weakened

• Commodities: Precious metals advanced, while oil continued its upward move for another day

• Cryptos: Rebounded strongly, with Bitcoin climbing back near USD 73k

• Volatility: The VIX declined to around 21

My View: At this stage, markets do not appear structurally vulnerable to the current geopolitical escalation. The rapid stabilization suggests that investors still view the conflict primarily as a regional risk and ending soon rather than a systemic shock to the global economy.

However, the more relevant medium-term risk lies in energy markets. Oil prices continue to climb and could become a meaningful drag on the global economy if they do not fall back quickly. Brent crude has already moved above USD 80 per barrel, the highest level in more than a year, reflecting concerns about potential disruptions to energy flows in the region.

If tensions persist or the Strait of Hormuz remains constrained, oil prices could potentially move toward USD 100 per barrel. Such a move would likely increase inflationary pressures and complicate the outlook for central banks, potentially delaying rate cuts or forcing policymakers to keep interest rates higher for longer.

At the same time, higher energy and gasoline prices act as an additional tax on consumers and could weigh on consumption in the coming months.

I cannot fully share the overall optimism currently visible in financial markets. The conflict does not appear likely to end quickly. Even though Iran’s military response so far seems limited in scale, the geopolitical situation remains highly unstable and unpredictable.

Markets may be underestimating the risk of a prolonged conflict and the second-round effects of persistently higher energy prices. Sustained elevated oil prices would likely feed into inflation, keep central banks cautious and ultimately act as a headwind for global consumption and economic growth.

The Iran war has entered its fourth day and the conflict is clearly broadening. Joint U.S. and Israeli airstrikes against Iran continue, while US President Donald Trump indicated that the bombing campaign could last for weeks and again called on Tehran to capitulate. Iran’s leadership has ruled out negotiations and continues retaliatory missile and drone strikes across the region.

Attacks have affected Israel and several Gulf states, including the United Arab Emirates, Bahrain, Qatar, Saudi Arabia and Kuwait. At the same time, Israeli operations extend toward neighboring countries such as Jordan and Lebanon. Practically, most of the Middle East is now directly or indirectly involved.

The most market-relevant development came in the evening: an Iranian commander declared the Strait of Hormuzofficially closed. This waterway is the most critical global energy chokepoint. Roughly 20% of global oil supply and a significant portion of LNG exports pass through this narrow corridor. While much of the flow is directed toward Asia, Europe remains materially exposed to Middle Eastern energy supplies. A prolonged disruption would have direct macro consequences.

Markets: nervous but no panic

• Equities: Broadly lower, but no panic selling. US markets managed to rebound intraday.

• Bonds: Falling first, yields rose on renewed inflation concerns rather than pure safe-haven demand. The U.S. 10-year trades around 4.04%, reflecting fears of a potential energy-driven inflation impulse.

• Currencies: The USD strengthened significantly, typical in early-stage geopolitical stress environments. The Swiss franc, against a normal scenario, weakened as Swiss National Bank announced potential currency intervention

• Commodities: old moved higher and ended around USD 5’300/oz after testing USD 5’400 intraday. Silver was extremely volatile, briefly reaching USD 96/oz before falling back below USD 90/oz. Energy markets remain the key transmission channel to watch. Oil jumped above USD 70/barrel

• Cryptos: Rebounded markedly, with Bitcoin back near USD 69k - rotation from silver.

• Volatility: the VIX spiked above 25 before easing toward 21 — stress, but not disorder.

My View: Is this the moment to buy? Not yet.

While the first shock in geopolitical events is often the most violent, this conflict carries a meaningful risk of worsening before stabilizing. The decisive factor is not the military headlines themselves, but whether energy flows through Hormuz are materially disrupted.

If the closure proves rhetorical or very short-lived, markets may digest the situation relatively quickly. However, should shipping volumes decline meaningfully and oil prices spike sharply, the macro impact could become significant. Higher energy prices would feed directly into global inflation, restrict central banks’ flexibility, and increase the probability of stagflation, weaker growth combined with rising prices.

OPEC+ has agreed to increase production quotas by 206,000 barrels per day in April. This is supportive at the margin, but small compared to a serious disruption of a route handling nearly one-fifth of global oil supply.

The key questions now are straightforward: How long will hostilities continue? Will the Strait of Hormuz remain effectively closed? How far is Iran willing — and able — to escalate militarily? Does diplomacy re-enter the picture, or does the conflict broaden further?
President Trump’s indication that additional troops could be sent to the region is a clear signal that this situation may not resolve quickly.

Markets currently appear to price a limited-duration scenario: partial de-escalation and a relatively fast normalization of energy flows, allowing risk assets to stabilize after heightened volatility.

The bear case involves sustained disruption in Hormuz combined with ongoing regional strikes, leading to a renewed oil spike, re-accelerating inflation, lower equity valuations and widening credit spreads.

The worst case would be a severe and prolonged supply shock — triggering a global growth slowdown alongside an inflation surge, creating a policy dilemma and increasing recession risk.

At this stage, I tend toward the bear case. Therefore I see markets to re-rate to lower levels.

This is a volatility regime, not a capitulation phase. Patience and optionality remain critical. The opportunity to add risk will emerge with clarity, not during escalation.

Tonight, after the closing bell, Nvidia reports its Q4 earnings. Expectations are high – but more important than the numbers themselves will be the guidance and tone. This earnings call increasingly functions less like a quarterly update and more like a public stress test for the entire AI trade. Nvidia has become a proxy for the broader AI narrative.

Markets:

• Equities: Followed yesterday’s rebound, with Tech leading. Nvidia up almost 2% ahead of results.

• Bonds: US yields remain lower (US 10y ~4.04%).

• Currencies: USD continued to weaken.

• Commodities: Precious metals extended their rally – Gold ~USD 5’200/oz, Silver above USD 90/oz.

• Cryptos: Rebounded markedly from oversold levels, Bitcoin back at USD 68k

• Volatility: VIX fell below 19.

My View: This event is no longer just about Nvidia’s quarterly figures. It has become a key signal for the entire AI boom. The AI story took a breather in recent weeks as markets are currently pricing close to perfection. Any deviation from very high expectations could trigger outsized reactions.

The world’s largest tech companies are planning eye-popping capital expenditures for 2026, with hundreds of billions of dollars earmarked for AI infrastructure. This underpins the long-term demand narrative. However, the crucial question remains whether this massive investment wave will translate into sustainably higher margins and profits. Personally, doubts remain as to whether these billions can be earned back in the nearer term.

Based on past earnings calls, Jensen Huang will almost certainly present an optimistic narrative. Whether this will be “positive enough” to satisfy markets after the recent volatility is hard to predict. Headlines and analyst interpretations could easily push markets in either direction.

In such a headline-driven, binary setup, I avoid making directional bets ahead of this kind of pivotal event. This is not a moment for conviction trades, but a moment to observe investor behavior and draw insights for future investment decisions.

The US Supreme Court’s decision to strike down key Trump-era tariffs briefly raised hopes for relief. However, the relief was short-lived: President Trump quickly reinstated broad-based global tariffs – first at 10%, then raised to 15% over the weekend via alternative legal channels.

At the same time, stress signals are emerging in private credit. Blue Owl sold around USD 1.4bn of loan assets from three private debt funds, while curbing liquidity payments to investors. Blue Owl is a leading asset management firm offering alternative investment solutions in private credit.
This highlights growing concerns that years of ultra-low rates and compressed spreads have encouraged excessive risk-taking across parts of the private credit universe. Liquidity mismatches could become the weak spot if market stress intensifies.

Markets:

• Equities: clearly lower led by US Tech down around 1.2%

• Bonds: US yields slightly lower after Friday’s spike(US 10y ~4.03%)

• Currencies: USD weakened markedly

• Commodities: Precious metals extended their rally
  – Gold ~USD 5’230/oz (+2.4%)
  – Silver ~USD 88.5/oz (+4.7%)

• Cryptos: Sharp sell-off, Bitcoin back near USD 64k

• Volatility: VIX jumped to 21

My View: What happens next remains unclear. Refunds of already paid tariffs, corporate reclaim mechanisms and the fiscal implications for the US Treasury are unresolved. This legal and political fog adds yet another layer of uncertainty for corporates, supply chains and markets.

Markets are slowly starting to internalize that the current environment is fundamentally different from the easy “buy-the-dip” regime of recent years. This reallocation process does not happen in one session – positioning typically adjusts over several days or even weeks.

On Friday, I outlined the expected market reaction to renewed tariff uncertainty:

• Weaker USD ✅

• Higher US yields ❌ (only briefly on Friday)

• Fragile risk assets (equities & cryptos lower) ✅

• Precious metals higher ✅

• Volatility rising ✅

The initial positive market reaction was for me hard to reconcile with the underlying fundamentals and unresolved risks. The market reversal after the weekend suggests that investors are now reassessing the situation more realistically, broadly in line with my initial assessment and underlying analysis as they have largely played out as expected..

The broader picture remains unchanged: uncertainty is not diminishing – it is increasing. Tariff policy chaos, legal uncertainty, fiscal concerns and emerging cracks in private credit form a fragile cocktail.

Should negative momentum accelerate, a faster and more disorderly unwind of risk assets cannot be ruled out.

TThe US Supreme Court ruled (6–3) that the legal framework underpinning the Trump-era import tariffs does not “authorize the President to impose such duties”. This landmark decision removes a major pillar of recent US trade policy — but opens a new layer of legal, fiscal and political uncertainty.

Market reaction: (initial moves)

• Equities: Jumped on relief and hopes for lower input costs, less trade friction

• Bonds: US yields moved higher (10y ~4.10%), reflecting fiscal concerns

• Currencies: USD weakened

• Commodities: Precious metals paused their rally

• Cryptos: Risk-on bounce, Bitcoin back around USD 68k

• Volatility: VIX lower on relief

My View: not a moment to add risk

This ruling is not a clean positive catalyst for risk assets. Risks and uncertainties remain, even increase:

• Legal & implementation uncertainty:
  What happens to tariffs already paid? Refund mechanisms could take years and trigger lawsuits. Corporate cash flows and balance sheets remain exposed to administrative and legal friction.

• Fiscal implications:
  Tariffs effectively acted as a revenue source. With US debt already elevated, the removal of this income stream implies higher Treasury issuance, structurally higher yields, and rising fiscal risk premia.

• Policy unpredictability:
  Trade policy remains hostage to political cycles. The risk of abrupt reversals (tariffs off today, back tomorrow via another legal route) keeps uncertainty elevated for corporates and investors.

What I expect from here:

• Weaker USD on political risk and twin deficits

• Higher US yields as fiscal supply pressure rises

• Fragile risk assets: equities and cryptos vulnerable once the relief rally fades

• Precious metals remain structurally supported by USD weakness and elevated uncertainty, despite short-term consolidation

Today’s US macro data delivered a mix of numbers: growth is cooling faster than expected, while inflation pressures are re-accelerating.

US GDP growth slowed to an annualized 1.4% in Q4 2025 (vs. 3.0% expected, 4.4% in Q3). At the same time, the Fed’s preferred inflation gauge, PCE prices, rose +0.4% m/m in December (+2.9% YoY), the strongest monthly increase since February and above expectations.

Markets:
Equities: US futures under pressure after the data
Bonds: Yields ticking higher (US 10y ~4.08%)
Currencies: USD softer
Commodities: Precious metals strong - silver up 5% > USD 81/oz and gold more than 1% >USD 5’050/oz
Cryptos: sideways; Bitcoin around USD 67k
Volatility: VIX continues to trend higher

My View: Only a few weeks ago, markets were priced for “perfection”. It seems they now definitely need to reassess the “perfection pricing”.
Valuations in parts of the equity market remain stretched, while macro reality is turning less supportive: growth is slowing and inflation is proving sticky. This combination complicates the outlook for monetary policy and risk assets alike. This reduces the probability of near-term Fed easing – and with that, one of the key pillars that supported high risk appetite.

Importantly, overall equity indices are still not far from record highs. The recent damage has been concentrated in selected, crowded names. A broader re-rating of valuations therefore looks increasingly likely as investors reassess earnings assumptions and discount rates under a “higher-for-longer” inflation backdrop.

I currently see no clear macro or liquidity catalyst that would justify a sustained push to new highs in equities. Positioning remains fragile: many investors who suffered losses in recent swings, and fund managers who were positioned “all-in,” are now constrained by lower cash buffers and reduced risk appetite. This limits the fuel for an aggressive rebound.

Bottom line:
The environment remains headline-driven and volatile. Markets can overshoot in both directions, but for now, patience remains key. Selective opportunities may emerge in individual stocks if valuations reset to more attractive levels – but the broader backdrop argues for caution rather than chasing rebounds.

Yesterday’s publication of the minutes showed, the Federal Reserve is far from united on the policy path ahead. While most officials agreed to keep rates unchanged at the January meeting, opinions diverge on what comes next. Some members emphasized the need to support the labor market, while others stressed that rates may need to stay higher for longer, or even rise further, if inflation fails to cool.

Markets are currently pricing a 94% probability that the Fed holds rates steady at the next meeting, with roughly a 50% chance of a first rate cut in June (CME FedWatch).

Markets: rebound lost quickly momentum
Equities: broadly lower, rebound stalled
Bonds: little changed - US 10y ~4.10%
Currencies: USD firmer
Commodities: metals sideways - oil supported by Iran-related risks
Cryptos: weak; Bitcoin back to USD 66k
Volatility: VIX continues to trend higher

My View: As highlighted in my comments yesterday, the recent rebound looks fragile and likely short-lived. There is little prospect of fresh liquidity support from the Fed before summer at the earliest. On the contrary, ongoing balance sheet reduction continues to drain liquidity from the system, which has been a big driver for cryptos. This could be an overall headwind for risk assets.

The macro backdrop remains unusually uncertain. Labor market dynamics and inflation trends are difficult to forecast, while political and legal risks around tariffs remain unresolved. Although some estimates suggest that up to 90% of tariffs are passed on to consumers, recent inflation prints do not yet fully reflect this — adding to the uncertainty around the true inflationary impact.

ETFMandate positioning remains rather defensive:

• Elevated cash levels, waiting for more attractive entry points in equities

• Precious metals favored as safe-haven assets

• Swiss franc expected to remain supported in risk-off phases (EUR and USD fully hedged)

• No bond allocation given the lack of a clear trend and headline-driven yield swings

With liquidity tightening, policy uncertainty rising and volatility creeping higher, downside risks still dominate. Patience remains key. Tactical rebounds may occur, but the broader risk-reward for equities remains unattractive at current levels. The reason I do not add fresh money to increase current equity exposure.

Last week, the first attempted rebound on Wall Street failed, with mounting concerns around profit sustainability in the tech sector. What started with AI disruption fears in software names spilled over into other segments, including wealth managers, media/publishers and transport companies.

Two key factors continue to weigh on markets, especially the tech sector:
Rising AI-related Capex:
Big Tech’s aggressive investment plans in AI are increasingly questioned by investors, with concerns around capital discipline and uncertain returns.

Broad disruption fears
AI is no longer just a pure growth story — it is increasingly perceived as a disruptive force across multiple industries. This is putting pressure not only on selected tech names but also on adjacent sectors, as investors reassess business models, competitive advantages and long-term earnings visibility.

With tech sector under pressure the Magnificent 7 (Apple, Microsoft, Nvidia, Alphabet (Google), Amazon, Meta, Tesla) underperform the rest of the market.

Markets: rebound in equities and commodities
Equities: Broad rebound, led by Tech; Nasdaq +1.3%
Bonds: Yields slightly higher (US 10y ~4.09%, Japan 10y ~2.14%)
Currencies: USD stabilizes after recent weakness; CHF remains strong
Commodities: Strong rebound — gold back above USD 5’000/oz (+2.5%), silver above USD 78/oz (+6%)
Cryptos: No recovery; Bitcoin remains below USD 68k
Volatility: VIX trending higher again, staying above 20 despite the rebound

My View: Current market volatility, reflected in larger price swings, does not come as a surprise. Today’s rebound may prove short-lived, as uncertainty remains elevated. AI-related concerns are unlikely to fade quickly, especially with valuations in parts of the tech sector still extremely demanding.

The classic “buy-the-dip” playbook is losing reliability. Many speculators who were rewarded for this strategy in the past are now facing a different market regime, which is likely to limit fresh risk-taking on rebounds.

The underperformance of the Magnificent 7 (Apple, Microsoft, Nvidia, Alphabet, Amazon, Meta and Tesla) also has a technical component: ETF-driven flows amplified gains during the rally — and now, as positions are being reduced, these heavyweight stocks are coming under over proportionate pressure. This mechanical selling can reinforce downside moves even without a major fundamental shift.

Bottom line:
Headline-driven markets, stretched positioning and rising volatility argue for caution. Tactical rebounds may occur, but the environment remains prone to renewed setbacks — especially in crowded tech and AI trades.

US inflation data surprised positively in January, with CPI coming in at 2.4%, below estimated 2.5% and down from 2.7% last month. At first glance, this supports the disinflation narrative.

Markets:
Equities: Under renewed pressure, led by tech and AI-related names
Bonds: Yields falling sharply on renewed rate-cut hopes. US 10-year yields falls to 4.05%
Currencies: USD continues to weaken while Swiss franc strength continues
Commodities: Rising across metals

My View: The softer CPI print does not change the broader picture materially:

• Fed rate cuts are not a given as the US labor market remains resilient.

• Tariffs remain inflationary: based on a recent report, around 90% of tariffs are ultimately paid by consumers, adding structural price pressure.

• Rising commodity prices matter: Even without higher oil prices, rising metals and input costs feed into production and consumer prices over time.

• Weaker USD: could become an additional inflation driver later in the year as import costs are rising.

Markets may be tempted to price in a smooth disinflation and rate cuts. The risk is that inflation pressures return via tariffs and commodity prices – keeping volatility elevated and narratives unstable.