In this episode, we examine how the Middle East conflict transmits economic shocks beyond energy markets, focusing on supply chain disruptions in Asia-Pacific and global inflationary pressures. Join us when we explore why commodity exporters like Australia are feeling the pinch, how central banks will respond to stagflation, and why US equities have remained resilient , though caution is warranted as more significant market headwinds may be emerging.

Participants:

• Peter Schaffrik (Desk Strategy), Head of UK/European Rates & Economics
• Robert Thompson (Research), Australian Macro Rates Strategist
• Izaac Brook (Desk Strategy), US Rates Strategy
• Lori Calvasina (Research), Head of U.S. Equity Strategy

* Research Analyst opinions are their published views, independent of those expressed by Desk Analysts

The episode examines the Iran conflict through an emerging markets lens, analyzing recent developments and exploring two primary scenarios that could unfold in the coming weeks. The first scenario envisions rapid de-escalation that would allow oil prices to retreat toward $80 per barrel, providing relief to EM economies and supporting risk assets. The second scenario contemplates further escalation, potentially including boots-on-the-ground military intervention, which would keep oil prices elevated for an extended period. This sustained pressure would create headwinds for EM growth, inflation dynamics, and external balances. We assess the implications of each path for emerging market currencies.

Participants:

• Luis Estrada(Desk Strategy), LATAM FX Strategist
• Daria Parkhomenko (Desk Strategy), FX Strategist
• Abbas Keshvani (Desk Strategy), Asia Macro Strategist

* Research Analyst opinions are their published views, independent of those expressed by Desk Analysts

In this European edition of Macro Minutes, we discuss the rise in energy prices in the wake of the Middle East conflict brings back painful memories of the 2022 energy shock for Europe. We dissect what is similar and what is different, quantify some impacts on inflation and growth estimates, and map a path forward for the ECB and BoE.

1. Peter Schaffrik (Desk Strategy), Head of UK/European Rates & Economics
2. Cathal Kennedy (Desk Strategy), Senior UK Economist
3. George Moran (Desk Strategy), European Macro Strategist

* Research Analyst opinions are their published views, independent of those expressed by Desk Analysts