16.03.26 - Betting on a quick war end

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.

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