07.04.2026 - The ’Dead’-line
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.
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