This week stands out as one of the most important macro and market inflection points in recent months. A rare combination of Big Tech earnings and a global cluster of central bank decisions will set the tone across asset classes.

Big Tech Earnings:
On the corporate side, the spotlight is clearly on the US mega caps. Results from Alphabet, Microsoft, Meta Platforms, Apple and Eli Lilly are expected to drive index direction, particularly given their heavy weight and ongoing AI-driven narrative.

In Europe, key updates from Airbus, Air Liquide, AstraZeneca, TotalEnergies, UBS and Schneider Electric will provide further insight into industrial demand, energy dynamics and financial sector resilience.

Central bank decisions:
At the same time, monetary policy takes center stage. A rare alignment of decisions from the Federal Reserve (Fed), European Central Bank (ECB), Bank of England (BoE), Bank of Canada and Reserve Bank of Australia adds another layer of uncertainty.

The Bank of Japan already set the tone this morning. As widely expected, it kept its policy rate unchanged at 0.75% (6–3 vote), but delivered a clearly hawkish message. The central bank reiterated its intention to continue tightening gradually, supported by rising inflation expectations and ongoing geopolitical uncertainties, particularly linked to the Middle East conflict.

Markets reacted accordingly. The Nikkei 225 slipped following the announcement while the Japan 10-year yield moved closer to 2.5%. Precious metals such as gold and silver saw some weakness on the back of the more hawkish tone.

Markets:

• Equities: mixed in Asia and Europe while Futures are negative in the US

• Bonds: yields remain elevated - Japan 10y at 2.48%, US 10y at 4.37%

• Commodities: oil prices supported by supply concerns with WTI USD 100/barrel and Brent at USD 111/barrel.
  Precious metals fall - silver around USD 73/oz and gold around USD 4’600/oz

• Currencies: USD rising while CHF weakens

• Cryptos: fall - Bitcoin down to USD 76k

• Volatility: The VIX rises from lower levels towards 19

My View: The market is becoming extremely stretched to one side. This is clearly reflected in the historic 17-day winning streak of the Philadelphia Semiconductor Index. A move never seen, driven by the latest earnings momentum from Texas Instruments and Intel. This record run eclipsed the previous 15-day record from 2014.

Valuations in parts of the market have now moved beyond levels seen during the dot-com bubble. That alone should raise attention.

The setup is simple: the bow is under extreme tension. When positioning, sentiment, and price action all align in one direction, it only takes a small trigger to unwind the move. The coming days offer plenty of potential catalysts: earnings, central banks, geopolitics.

At the same time, the situation around Iran remains unresolved. The market continues to largely ignore this risk. Current political positioning by Trump suggests more of a wait-and-see approach rather than a clear path toward resolution. The probability of renewed escalation remains elevated.

And this is where I see investors underestimating the bigger picture: the global economy is increasingly exposed to an energy shock scenario. Supply disruptions, fragile logistics, and geopolitical uncertainty are not reflected in current in prices of risk assets.

In such an environment, the downside reaction can be significantly faster than the upside build-up.

Is this the time of a turning point? At least, the current setup leaves very little margin for error. I expect at least bumpy markets ahead with more downside, why I increased my bets on falling stock markets by adding more short positions in the portfolio during the last days.

The US has extended its ceasefire with Iran for an undefined period. Meanwhile, Iran has reportedly targeted three vessels transiting the Strait without authorization.

Planned talks in Pakistan have been called off, as Iran indicated it would not send a delegation.

The situation remains fragile and highly unpredictable.

Markets: US equities continue to reach new all-time highs, with investors seemingly brushing aside geopolitical tensions and rising risks. At the same time, oil has climbed back above USD 100 per barrel, reflecting growing concerns in energy markets.

My View: Current investor behavior, particularly the persistence of systematic and momentum-driven strategies, feels increasingly detached from underlying realities. Markets are priced for pure optimism, yet the risk backdrop has not improved. If anything, uncertainties are compounding almost daily.

I remain highly attentive to headlines, as any sudden development, or even a single tweet, has the potential to shift market direction abruptly.

At this stage, I see no compelling reason to adjust my allocation. The current risk-reward profile does not justify increasing exposure, especially given the potential for sharp downside moves driven by escalating uncertainty or negative economic news.

That said, I acknowledge the possibility that this risk-on environment may persist longer than expected, and I am willing to accept that risk.

The core issue remains unchanged: uncertainties are not decreasing, they are accumulating.

We are now in the final hours of the temporary ceasefire. The situation is once again shifting toward escalation. A US delegation has travelled to Pakistan in an attempt to keep diplomatic channels alive. However, Iran signaled it will not participate in any talks, putting negotiations effectively at risk before they even begin.

At the same time, both sides are already accusing each other of violating the ceasefire terms, a typical pattern seen ahead of renewed conflict phases. The window for de-escalation is narrowing quickly.

Markets: US markets are holding up quite well for now, supported by hope rather than clarity. While European markets moved lower into the closing.

My View: Markets remain optimistically positioned, arguably too optimistic given the underlying reality. Investors are still conditioned to expect the next supportive headline, whether it’s another statement published by Donald Trump or a last-minute “TACO-style” announcement that delays escalation once again.

Sentiment indicators continue to hover in “greed” territory, close to “extreme greed.” That is typically not the environment where risks are properly priced.

The clock is ticking. The situation is once again at the critical point.

If the ceasefire officially expires without a credible path forward, the probability of a renewed escalation increases materially. This is not just about headlines, it directly ties into the unresolved issue of energy flows and the structural risk around the Strait of Hormuz.

A re-acceleration of the conflict would likely trigger:

• Downside pressure on equities

• A sharp move higher in oil prices

• A delayed reaction in volatility, followed by a potential spike

This remains a headline-driven market, but one where the gap between positioning and reality is widening again.

The Middle East conflict is back at the center of market attention, with the Strait of Hormuz remaining the critical pressure point.

Tensions are rising again. Both sides reportedly fired on vessels attempting to transit the strait, while the US intervened directly, taking control of tankers and cargo ships trying to pass through. What was framed as a temporary stabilization phase is clearly starting to unravel.

The ceasefire agreement is set to expire in just two days. At this stage, there are no clear signals that an extension or sustainable resolution is in place.

Markets: oil prices move higher on renewed supply fears, equities broadly lower

My View: Markets are once again trading on hope, as equities should trade much lower. But the underlying reality is shifting.

The focus should not be on whether a ceasefire headline gets extended for a few more days. The real issue is the functionality of the Strait of Hormuz. As long as transit remains disrupted or controlled, the global energy supply is effectively constrained.

We are now seeing the first signs of what I have been highlighting: escalation risk was never off the table, it was just temporarily paused. Both sides are still too far apart to reach a meaningful deal, and that is exactly what markets continue to underestimate.

If the ceasefire expires without a credible framework, the situation can deteriorate quickly. Oil becomes the key transmission channel into inflation expectations, central bank policy, and ultimately equity valuations.

Markets still appear complacent relative to the magnitude of this risk.

This remains a highly headline-driven environment, but with increasingly asymmetric downside if the situation escalates further.

The market momentum continues to accelerate. The Nasdaq has now posted 10 consecutive days of gains — the longest winning streak in years — highlighting the strength of the current risk-on environment.

Equities are increasingly pricing in a near-perfect scenario: progress in peace talks, a lasting ceasefire, declining oil prices, and cooling inflation. The combination of these factors fuels the perception that the macro backdrop is turning decisively supportive again.

At the same time, volatility has faded, and fear has largely disappeared from the market. Positioning reflects confidence. Markets are not trading current reality, but a forward-looking, highly optimistic outcome.

The Warren Buffett Indicator shows its highest point ever, marking with today’s value of 221% an overvaluation. Regarding Buffett, an overvaluation starts at 150%, a level above 200%, he calls it “playing with fire”.

Markets: overall sideways move after latest rally

My View: This is a classic “mania phase” — where markets extrapolate best-case scenarios and price them in as the base case.

The key driver right now is the expectation that upcoming talks will lead to a lasting resolution. But this also defines the risk.

If negotiations next week fail and the ceasefire expires, this entire setup can reverse very quickly. The current positioning leaves little room for disappointment. This is a situation to monitor closely as it unfolds.

At the same time, AI mania is back on the trading floor.

Those following my work know my stance: the biggest bottleneck remains energy. The scale of power required for data centers is massive, and often underestimated. This alone challenges the sustainability of the current investment wave.

Beyond that, the key question remains unanswered: how will the hundreds of billions being invested today translate into future free cash flows?

At this stage, I do not see a clear, scalable business model that justifies these valuations. AI will undoubtedly continue to develop and improve productivity, but in my view, it will remain a supportive tool, not a full economic replacement engine.

Markets, however, are once again pricing a much bigger story. And that gap between narrative and reality is where risk builds.

Markets have staged a strong rally over the past days, pushing indices back above pre-war levels. The move appears largely sentiment-driven, with investors leaning on optimism rather than fundamentals.

On the macro side, US PPI, with 0.5% MoM (est. 1.1%) surprised to the downside, offering short-term relief on the inflation front. In contrast, inflation data across Europe showed upside pressure.

Markets: risk-on

• Equities: moved higher, with major indices trading above levels seen before the escalation in the Middle East.

• Bonds: yields fell back from recent highs - Japan 10y at 2.41%, US 10y at 4.26%

• Commodities: oil prices fell based on hopes war ends - WTI USD 91/barrel and Brent at USD 95/barrel. Precious metals rallied - silver above USD 79/oz and gold above at USD 4’800/oz

• Currencies: USD fell from recent highs -

• Cryptos: falling back from yesterday’s highs - Bitcoin down to USD 74k

• Volatility: The VIX fell back to 18

My View: This rally is built on one key assumption: that the ceasefire will hold and the war will end soon which rather looks like a dream to me.

Nevertheless, markets are focusing on the wrong variable. It is not about if or when the war ends, it is about energy flows.

Roughly 20% of global oil supply moves through the Strait of Hormuz. Since early March, flows have been severely disrupted following the attacks of US and Israel on Iran when the Strait of Hormuz got closed. We are now 43 days into this shock. A timeframe that historically would have already triggered a much stronger repricing across assets.

Assuming that the Strait opens today again, it would take weeks to get the energy market and supply back into balance. And shortages are seen across Asian countries while Europe and US just see higher prices at the petrol stations, however also thanks to oil stocks built up in case of crisis.

This disconnect of the markets with the reality is striking. The reason, why I do not put my money on this bet as I do not see equity markets rallying further. Or in case they do, it could end in a disaster.

At the same time, monetary policy expectations remain overly optimistic. In Europe, rising inflation increases the probability that the ECB may be forced into a more hawkish stance, potentially even considering rate hikes. In the US, despite similar underlying inflation pressures, markets continue to price a “best case” scenario, the Fed staying on hold or even leaning dovish.

This reflects a broader belief: that loose monetary policy will continue to support markets. However, liquidity is already elevated. Money supply remains high and is itself a contributor to persistent inflation, making the 2% target increasingly difficult to achieve.

As long as liquidity expectations dominate, risk assets may continue to ignore the oil shock. But, in my view, this comes at a cost.

Valuations may look more attractive after recent volatility. But they do not reflect a sustained high oil price environment. If oil remains at current levels or moves even higher due to prolonged disruption, the repricing could be abrupt.

Markets are once again priced for perfection, in a world that is anything but perfect.

In my main scenario remains unchanged, I see a potential for higher oil prices from here, lower equities, higher bond yields and precious metals with wider swings also higher.

A cautious stance remains warranted.

Talks in Islamabad between the US and Iran ended after 21hours negotiations without reaching a deal.
Donald Trump issued a new threat to block the Strait of Hormuz for any type of shipments. Iran responded with a stark warning: if its ports are threatened, no port in the Gulf will be safe.

At the same time, geopolitical risks broadened. Trump signaled potential 50% tariffs on China, following reports that Beijing may deliver new air defense systems to Iran.

Markets: back and forth - today: back again

• Equities: globally down again

• Bonds: broadly tick higher - Japan 10y at 2.47% (!) highest since decades, US 10y at 4.35%

• Commodities: oil prices jumped higher: WTI USD 104/barrel and Brent at USD 102/barrel. Precious metals fall - silver above USD 74/oz and gold above at USD 4’700/oz

• Currencies: up again - USD unchanged

• Cryptos: under pressure - Bitcoin down to USD 70k

• Volatility: The VIX back above 20 at level 21

My View: What started as a regional conflict is increasingly turning into a multi-front geopolitical escalation.

Talks failed. Strategy failed. The key question now: what is the exit strategy?

For the US administration, stepping back would implicitly mean admitting a major miscalculation. That makes a quick resolution politically difficult and increases the risk of further escalation.

At the same time, markets remain surprisingly resilient, especially equities.

This is where the disconnect becomes critical:

• Energy shock → inflation pressure rising again

• Yields moving higher → tightening financial conditions

• Consumer sentiment risk → with rising costs for goods and transportation

• Geopolitical risk expanding → tail risks increasing

Yet equities are still trading as if this is a quick and only temporary disturbance.

To me, current valuations do not reflect this reality. Positioning, liquidity, and still-present “buy-the-dip” behavior seem to dominate, for now. But this setup looks increasingly fragile.

I remain cautious. Risk/reward at current levels is unattractive.
I continue to run limited exposure and stay positioned for a market stress scenario. Because if this “double blockage” of the global oil artery persists, the repricing across assets is not a question of if — but when.

This weekend, the first talks between the US and Iran are set to take place —

In the meantime, the Strait of Hormuz, a vital artery for global oil shipments, remains effectively blocked. Despite the announced ceasefire, tanker traffic is still near a standstill. According to Reuters, flows are running at well below 10% of normal volumes, an extraordinary disruption for global energy markets.

At the same time, Saudi Arabia reports additional supply constraints after damages:
– Pipeline flows reduced by ~700,000 barrels per day following pump station damage
– Output capacity down by ~600,000 barrels per day

This afternoon, markets will focus on the US March CPI release — the first major inflation print since the Iran conflict triggered a severe energy shock. This data point will be critical for rate expectations and overall market direction.
Markets: mixed

• Equities: Asia, Europe higher, US flat

• Bonds: broadly tick higher - Japan 10y at 2.44% (!) highest since decades

• Commodities: oil prices moved higher with WTI above USD 98/barrel and Brent at USD 96/barrel. Precious metals rise further - silver above USD 76/oz and gold above at USD 4’775/oz

• Currencies: no big moves - USD unchanged

• Cryptos: up - Bitcoin above USD 72k

• Volatility: The VIX little changed - remains below 20

My View: Fragile oil flow. Fragile economy. Fragile consumers.

Despite clear signs of ongoing supply disruption and rising cost pressure, equity markets continue to show a surprising level of optimism.

My view remains unchanged: investors are broadly too complacent.

At least, investors continue to weigh the persistent supply risks, with oil prices edging higher again.

US-Iran talks this weekend, investors believe to be a potential turning point. However, it will be far from a resolution. The way the ceasefire was announced and Irans 10-points plan published right after let me believe that the talks will not end successfully after the weekend, leaving investors to be rather disappointed.

Today’s inflation data could act as a key catalyst. A stronger-than-expected CPI print would reinforce the reality of the energy shock and likely push rate expectations higher, a combination that markets are not fully pricing in.

The disconnect between macro risk and market pricing remains elevated.

A cautious stance remains key. After this weeks strong rally, a near-term dip cannot be ruled out this moment.

The Middle East conflict remains the dominant market driver. News flow is relentless, with new developments emerging almost on an hourly basis.

This afternoon, Israel agreed to enter direct negotiations with Lebanon — a potentially constructive signal. However, at the same time, the Strait of Hormuz remains effectively closed, keeping the core risk unresolved.

Markets: mixed

• Equities: US indices turned positive in the later trading session

• Bonds: largely unchanged

• Commodities: oil prices moved higher with WTI close to USD 100/barrel and Brent at USD 97/barrel. Precious metals rise further - silver above USD 76/oz and gold above at USD 4’775/oz

• Currencies: USD lower again

• Cryptos: higher - Bitcoin above USD 72k

• Volatility: The VIX falls below 20

My View: As already highlighted yesterday on Instagram, the more details emerge around the announced US-Iran ceasefire deal, the less convincing the overall setup appears to me to move in a positive direction.

It increasingly looks like a rushed attempt by Trump to engineer a ceasefire, without a clear and credible plan to resolve the underlying conflict. The US assumption that this would be a short and straightforward operation was fading quickly.

Most importantly:
The Strait of Hormuz is still not truly open.

At the same time, Saudi Arabia is now indicating a production loss of roughly 600’000 barrels per day due to damage, a disruption that cannot be restored overnight.

Oil remains the key barometer for now.

While equities are currently drifting higher and behaving as if risks are fading, the oil market is telling a very different story. This divergence is critical.

Markets appear disconnected from reality, and that is where the real risk lies.

If and when investors start to reprice based on actual supply disruptions and prolonged geopolitical stress, the adjustment in risk assets could be sharp.

A cautious stance remains key.

One hour before the deadline, US and Iran agreed on a two weeks ceasefire plan which was mediated by Pakistan. During this time the Strait of Hormuz should be open again.

Ten terms by the Iranian proposal got accepted by the US for negotiations. Among these, Iran should charge all ships passing the Strait and should take full control of the entire passage.

First negotiations are scheduled for Friday 10 April.

In the meanwhile, Israel came out with a statement, noting that it was a decision by the US president. Israel makes clear that it has not achieved the goals as the Iran regime is still there. Lebanon is not included in the ceasefire.

Markets: equities are pumping oil is dumping

• Equities: indices jump globally

• Bonds: yields fall - US 10y yield at 4.24% - Japan 10y 2.37%

• Commodities: oil prices slump - WTI crude oil down USD 96/barrel and Brent at USD 95/barrel. Precious metals surge - silver above USD 77/oz and gold above at USD 4’800/oz

• Currencies: USD falls while Swiss franc strengthened

• Cryptos: jump - Bitcoin above USD 71k

• Volatility: The VIX falls back to 20

My View: The short-term market reaction makes sense. At first sight, this looks like an all-clear signal: less immediate war risk, lower oil, lower volatility, higher equities. But I do not see this as a convincing reason for markets to keep rising from here.

The key issue is that the underlying conflict is not resolved. The ceasefire is temporary, Israel has already distanced itself from parts of the arrangement, Lebanon is excluded, and the situation around the Strait of Hormuz remains operationally and politically fragile. Shipping and energy markets may have received short-term relief, but the operational reality in the Strait is far from normal.
On top of that, I struggle to see how the US would accept a lasting framework in which Iran exerts full control over the passage and charges vessels at will.

For me, this looks more like a relief rally than the start of a sustainable upside leg. Markets have priced out a portion of the immediate worst-case scenario, but they may be far too quick to price in stability.

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.